ROV - "add comments why you didn't hit the sales price".

[alebrewer]

I have never had a Clients engagement letter ask for any explanation as to whether a Purchase Price is supported or not supported. That would be deemed as a directive and a "wink-wink" to the appraiser to hit the Bulls-Eye and nobody wants a regulator seeing that. No I digress : J.G. likes to conflate and play word games and she is hyper sensitive to the word market value and how its defined and gets upset if someone calls a Purchase Contract a Sales Price . I don't get twisted up about terms which are used interchangeably in the Real Estate Industry As for USPAP it's silent on final opinions of value and all they say is the Appraiser has to Develop A Scope of Work that produces a creditable value. There is no USPAP road map on many of these other issues. Also in USPAP the word credible is also a word that can be loosely defined. What may be Credible to me-may not be credible to the Client or user and that's where all these crazy ROVs Tidewaters and complaints come from . The borrower says the appraiser has no clue as to what he/she is doing and in some cases they are right but in most the are wrong-but credibility is all in the eyes of the beholder and whether it's credible or not will be determined hopefully by someone or some group who can stay within the white lines and this is when its critical to have a simple but clear final reconciliation so the client-User-reader-reviewer can understand why you arrived at that number.

I have seen appraisers use terms like A reasonable Range of Value was $350K to $365K or a Point of Value being $360K and I have seen the word-Adequate-and also Well Supported.

In reviews we had many appraisers that never presented any reconciliation or explanation on how they ended up with a Final Value and the-dirty little truth that we all know is many have no idea themselves and thats why Lenders Give Appraisers Purchase Contracts and MLS gives them Sales Prices. Finally most appraisers are not telling the truth when they say they pay no attention to a Contract or Sales price -If that was true 85% or more residential purchase agreements would not be coming in on the Bulls-Eye. The important thing is the appraiser wants His/her Final OMV to be Adequately- Supported-Reasonably-Supported-Well Supported- or Simply Supported but in the final end of the day the appraiser has to be able to be defend his/her Value and in a Post Closing Review- A buy Back or a State Board action nobody is going to be playing silly word games and when the final bell rings it better just be Supported : ) LMAO

I hope you'll not think me rude for not reading the entire book...

 

[glenn walker]

I hope you'll not think me rude for not reading the entire book...

No that's why I bolded the parts that JG needs to read because She thinks She is a USPAP expert but She is not

 

[Gingerman]

Well...it was listed for $750k, 30 buyers bid it up to $850k. The highest sale in the tract is $810k. And...the listing says it's 1,763 sf, but when you take out the non permitted garage conversion its actually 1,475sf. Came in at $835k

I'm very close to declining all overbid purchases for awhile.

lol I had something similar last year as a revision request...I simply went into typing out the definitions or meanings of "Contract Price", "Opinion of market value", Etc., and how the contract value has no weight in the sales comparison approach.... I was extremely pissed when I first read the revision request. The simple fact that I had to address that drove me nuts.... but now I look back and laugh lol

 

[residentialguy]

Unless there is a specific reason for that deal, I have a standard drop in comment "The SC price is above the MV opinion, which could be due to individual negotiation, other possible offers, inventory shortage and low interest rates. "

So what's your point? Other offers is just simply competition ie open market at play. Inventory shortages is simply supply and demand, also a normal part of the open market. Interest rates have been hovering around 3.5 since 2014. Did you use to appraise set price grocery foods before becoming an appraiser?

 

[Sadie]

No that's why I bolded the parts that JG needs to read because She thinks She is a USPAP expert but She is not

It would behoove you to read Standard 1-5 (a). The sales agreement is an indication of what at least one market participant is willing to pay for your subject. I think it is valid for your client to know why this particular market participant got it wrong.

 

[residentialguy]

Well...it was listed for $750k, 30 buyers bid it up to $850k. The highest sale in the tract is $810k. And...the listing says it's 1,763 sf, but when you take out the non permitted garage conversion its actually 1,475sf. Came in at $835k

I'm very close to declining all overbid purchases for awhile.

Why? Do you want to stop when the prices go down, as well? If similar active and pending homes are selling the same, sounds like the market is speaking. If it's just that one house, then that could be an indication that there is something special about that property that you might be missing that's creating a higher demand.

 

[Flakey]

I think it is valid for your client to know why this particular market participant got it wrong.

The market participant doesn't have to support their decision. You do, without the benefit of asking them.

 

[residentialguy]

@TMG,
Did you interview the agent and ask the agent why his client is willing to pay way more for this house than he could on a similar houses in the area?

 

[Russ Kitzberger]

The lender comes back to me to push values. What a frustrating market. Now I will need to waste a day further supporting my values for folks that didnt read the damn appraisal.

Can you schedule a one hour conference call; Address concerns, edit report if at the end of the call; if you all agree it is necessary?

 

[Sadie]

The market participant doesn't have to support their decision. You do, without the benefit of asking them.

I know, if your appraisal does not support the contract price, up or down, you need to have some sort of explanation of why. The agent may have some clarity. The market participant may have to support their decision if your EMV is below the contract price, but through the lender.