Do We Predict Or Not?

[Mr Rex]

Most appraisers avoid the term estimate as well. I could not care less if any uninformed user of my opinion of value considers it as a prediction or estimate of the exact value on the date of the appraisal. They need to RTFR. I understand that there is an intended use and user of each report. I include verbiage in all reports but more pointedly in private party appraisals that indicates that there is an indicated value range and that the point value chosen within that range is based on x,y,z etc.

 

[gregb]

Form 1025 / 72 cites "estimated rents" twice in the Subject Rent Schedule section of the form.

 

[NC Appraising]

https://www.appraisalbuzz.com/the-history-of-appraisals/


Great read from one of the most respected persons in this business.

 

[Stephen J. Vertin MAI]

No we do not predict. Everyone who says we do are wrong. Sorry....

 

[Eli]

I have been doing this a long time and have done a ton of foreclosure work. I can’t count the number of foreclosures I have worked on where the borrower got burnt on the front end. Major in last meltdown. How that property got appraised for what it did at the time of transfer?

Idk.

If I did a retrospective appraisal, I could provide countless situations where it occurred. If I could do a retrospective review on the appraisal or some other valuation technique?

Get ready.

 

[Bruce Hahn]

Hasn't anyone ever done a relocation appraisal? ERC work requires that your "forecast" your value out a specified number of days - usually 120 days - because that is what the relocation company cares about. The value when they can get it sold roughly four months after the employee relocates and the relo company buys the house from them. The methodologies developed by relocation appraisers to handle this forecasting work quite well!

Relocation appraisals are most definitely "predictions" of a prospective market value. I have not done this kind of work for many years, but relocation companies used to judge appraisers on how accurate their forecasted values were relative to the sales prices actually attained at sale. As well they should - the difference is either a loss or gain and they don't want that to happen!

 

[J Grant]

Relocation appraisals are predictions in the form of a forecast, but the assignment says purpose that and would have a future value date .

The issue is contemporary as of effective date appraisals:, some say we are predicting ( we are not ) ,

This issue is important not because of mere verbiage, but because often those who say an appraisal is a "prediction" believe, literally, we are "predicting" or guessing or estimating an ACTUAL PRICE the market should pay or will pay. ( rather than presenting an appraisal model of such)

 

[Artemis Fowl]

No we do not predict. Everyone who says we do are wrong. Sorry....

Are we not speculating on the most probable actions of market participants supported by observations of past activity? How is that not predictive?

 

[J Grant]

Are we not speculating on the most probable actions of market participants supported by observations of past activity? How is that not predictive?

Read the MV definition and how the MV opinion is stated on the appraisal and take it literally as it is intended to be used..

DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, ( what buyer and seller? The hypothetical buyer and seller IN THE APPRAISAL who transact at perfect MV terms and conditions and $ amount of most probable price ,value reconciled with the other approaches and SOW

The definition does not say, or mean, this:

The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, buyers and sellers market participants

 

[Artemis Fowl]

Read the MV definition and how the MV opinion is stated on the appraisal and take it literally as it is intended to be used..

That does not address how you get there...just what there is.