Value over highest comp

[ramrcdk]

What type of assignment is this?
Fannie/Freddie?
AMC?
Direct Bank?

Not that it should matter, but many AMCs freak the ** out and can't understand "how" an appraiser can be higher than their highest sale

Also, I would search back farther in time (at least 12 months) and make market/time adjustments if necessary. Just staying within 3 months limits your pool
Maybe you'll find a sale (or 3!) that sold 8-12 months ago that's a model match.

I know some on here will disagree with me, but have you also discussed the list price with the listing agent?
a.k.a. Where did they come up with that price?
how many showings did they have?
Are there multiple offers?
What did people looking at the subject have to say about the gas/generator?

As long as you don't discuss your findings and/or value, there's nothing wrong with that. That at least will give you an idea of what the seller and list agent were thinking when listing the property

I also would be looking at current active and pendings in the area. This also gives you an idea of current market conditions within the neighborhood and what people "Think" their houses are "worth"

Post #6 & #10
THAT IS some GOOD advice.
More & More propane house generators are INDEED ADDING value. With as many storms as FL has had I would "think" an asset but a sale or via commentary A Pending
IS the missing-piece of the puzzle.
As bnappraisal states, using a bracketing sale from a past time with what you indicate to be the percentage of change in historic to present market.

It is assumed & likely so ... cost-would not be market return.

 

[Zoe]

Generators are becoming more and more common in Tennessee with automatic switch. The house never loses power if the house is still there. The generator automatically fires up when the source of power fails. If power only goes out a second or two, the generator automatically fires up.

 

[Have Laser-Will Travel]

The expectation to bracket the estimate of value with comp sale price is not rooted in an appraisal principle, per se. It can be a useful exercise to serve as validation and is not necessarily wrong. When it becomes wrong is when an more-dissimilar/unreliable sale is used to bracket value or value is curtailed. I think this expectation is more about reducing lender risk but is made without respect to the ways it can skew value. After all, the letter of certification states that the most similar comparables were used, not the ones that provide the most CYA for reviewers. It also seems they forget we report the value range for the neighborhood. It's softer support but, it's support. Some valuations have more risk and it can't be eliminated by essentially doctoring the report by overriding fundamentals.

I suggest providing a farm list and search criteria in the report ordered by sale price and refer to it at the bottom page 2 when addressing lack of comp to bracket the estimate. Explain that providing a comp not on the list would require expanding the criteria, which is reserved for appraiser judgment only under appraiser independence. Also, provide the data and calculations used to support the adjustments for the propane tank and make sure to reference it also at the bottom of p. 2. You can finish it by explaining the in order to arrive at MV as defined in the boilerplate, it was necessary for the estimate to exceed comp sale prices.

 

[Zoe]

The expectation to bracket the estimate of value with comp sale price is not rooted in an appraisal principle, per se. It can be a useful exercise to serve as validation and is not necessarily wrong. When it becomes wrong is when a non-competitive sale is used to bracket value or value is curtailed. I think this expectation is more about reducing lender risk but is made without respect to the ways it can skew value. After all, the letter of certification states that the most similar comparables were used, not the ones that provide the most CYA for reviewers. It also seems they forget we report the value range for the neighborhood. It's softer support but, it's support. Some valuations have more risk and it can't be eliminated by essentially doctoring the report by overriding fundamentals.

I suggest providing a farm list and search criteria in the report ordered by sale price and refer to it at the bottom page 2 when addressing lack of comp to bracket the estimate. Explain that providing a comp not on the list would require expanding the criteria, which is reserved for appraiser judgment only under appraiser independence. Also, provide the data and calculations used to support the adjustments for the propane tank and make sure to reference it also at the bottom of p. 2. You can finish it by explaining the in order to arrive at MV as defined in the boilerplate, it was necessary for the estimate to exceed comp sale prices.

I agree somewhat, but there is no reason that the Market value opinion can not be bracketed on sales price of a comp. It can be given less weight and it is very possible that an over improvement has occurred with the subject which is a H&B use issue and then obsolescence comes into play. That could be case here. Idk.

 

[Zoe]

Remember this generator and the windows are fixtures. They are real property. Generator is probably bolted to a concrete slab and attached to electrical system. The market talks and cost approach does too. Be good to look at age/life on generator. Windows would be easier to use higher quality of construction as comp and leave immediate area if necessary and make adjustments downward/upward for location. Owner can probably provide receipts for the windows. Probably have a lifetime warranty that may transfer.

 

[Have Laser-Will Travel]

I agree somewhat, but there is no reason that the Market value opinion can not be bracketed on sales price of a comp. It can be given less weight and it is very possible that an over improvement has occurred with the subject which is a H&B use issue and then obsolescence comes into play. That could be case here. Idk.

The reason would be that all sales that bracketed value were not reliable and/or not the most similar sales. If you're not going to rely on it, it's unreliable and shouldn't be in the report just to keep the lender blindly happy. Otherwise, you're talking about testing HBU issues, which is fine but, you don't have to do that with comps you are calling the most similar according to the boilerplate. You can do that separately.

 

[Zoe]

The reason would be that all sales that bracketed value were not reliable and/or not the most similar sales. If you're not going to rely on it, it's unreliable and shouldn't be in the report just to keep the lender blindly happy. Otherwise, you're talking about testing HBU issues, which is fine but, you don't have to do that with comps you are calling the most similar according to the boilerplate. You can do that separately.

That's fine but cost approach is a huge indicator of value. That's where over improvements come into play. I can't see generator being over improvement in Florida. I would do age life on it and make adjustment. I don't know on windows. I don't know what the windows cost. We don't have those type windows in TN. We may on golf courses where the windows are facing the course. I wonder what wind velocity they will stand. At $395, I doubt it is on the beach. If it is, the H&B use may be to tear down.

 

[Zoe]

The expectation to bracket the estimate of value with comp sale price is not rooted in an appraisal principle, per se. It can be a useful exercise to serve as validation and is not necessarily wrong. When it becomes wrong is when an more-dissimilar/unreliable sale is used to bracket value or value is curtailed. I think this expectation is more about reducing lender risk but is made without respect to the ways it can skew value. After all, the letter of certification states that the most similar comparables were used, not the ones that provide the most CYA for reviewers. It also seems they forget we report the value range for the neighborhood. It's softer support but, it's support. Some valuations have more risk and it can't be eliminated by essentially doctoring the report by overriding fundamentals.

I suggest providing a farm list and search criteria in the report ordered by sale price and refer to it at the bottom page 2 when addressing lack of comp to bracket the estimate. Explain that providing a comp not on the list would require expanding the criteria, which is reserved for appraiser judgment only under appraiser independence. Also, provide the data and calculations used to support the adjustments for the propane tank and make sure to reference it also at the bottom of p. 2. You can finish it by explaining the in order to arrive at MV as defined in the boilerplate, it was necessary for the estimate to exceed comp sale prices.

Point blank. Bracket your MVO on unadjusted sales prices. Or give most weight to cost approach or income capitalization approach. You set SOW. You sign. Market condition adjustments are different story. That wasn't mentioned.

 

[Deleted member 80407]

Thank you! Yes, it's a whole house generator with an inground tank, and it does have impact windows and sliders as well. There's no way I'm going to be anywhere the contract price, but figure I'm going to end up in the 370-380 range. My comps are $369- same house minus the gas and generator. $348- non impact, non custom pool. $362- New roof, and A/C, non impact, custom pool. $345- Non impact, no interior updates, non custom pool. Those are sales prices, and not adjusted values. I haven't finished extracting adjustments. These all sold within the past 3 months, and market condition adjustments shouldn't have a significant impact.

In the 27+ years experience, I have never appraised a property over the highest comparable on the grid page nor would I utilized a pool property when the subject does not to obtain a number. Remember, when making adjustments, you have to provide market evidence to support the adjustment whether it is on the grid page or in the form of paired sales. You referenced "cookie cutter subdivision". I reside and practice in the state of Arizona which has many cookie cutter subdivisions which paired sales are easily found. Might I ask why you are leaving the area for comparison? Are there no comp's within the cookie cutter subdivision the subject is located in? Where I would start is within the cookie cutter subdivision first prior to leaving the area. Leaving the area because the sales within the cookie cutter subdivision are not high enough to support a contract price in my mind is a NO NO.

 

[DTB]

Leaving the area because the sales within the cookie cutter subdivision are not high enough to support a contract price in my mind is a NO NO.

I would leave the subdivision to demonstrate what house within the subdivision DON'T sell for. Bulletproof the report via that method.