Bracketing the contract price

[Tom D]

you are telling us the underwriter wants a lower sale, ok. yet, you haven't explained here why you didn't do that in the 1st place.
some of you here are defending the appraiser, yes USPAP doesn't say bracket, but bracketing sale price has been a standard for a while. but i haven't heard why they didn't bracket the sale price.
all the sales were higher? no lower sale? no explanation? sometimes that happens, but am i supposed to guess why?
don't bracket, it don't bother me. your clients will find someone who will next time. that's your business decision.

 

[mp2277]

you are telling us the underwriter wants a lower sale, ok. yet, you haven't explained here why you didn't do that in the 1st place.
some of you here are defending the appraiser, yes USPAP doesn't say bracket, but bracketing sale price has been a standard for a while. but i haven't heard why they didn't bracket the sale price.
all the sales were higher? no lower sale? no explanation? sometimes that happens, but am i supposed to guess why?
don't bracket, it don't bother me. your clients will find someone who will next time. that's your business decision.

Let me guess, you're a reviewer! I would be snarky and ask if you actually read my post and the comments, because I assume not. I challenge you to produce one shred of evidence that bracketing the sale price has been "a standard for a while". Assuming you are a RE professional I would think it would be easy for you to figure out why the sale price wasn't bracketed. Here, I'll help you... as has been stated a couple of times here IT WAS OBVIOULSY UNDERPRICED. So, according to your reasoning I am supposed to go find some inferior property that sold for less than the subject to make some UW happy. I suppose it it were priced significantly higher by some illogical seller and an overzealous Realtor I would go find some superior sale simply to bracket the sale price. While you are correct USPAP doesn't mention bracketing, and actually says very little about comp selection beyond the requirement to produce a credible report. IMO a credible report includes the best and most comparable sales available, not some inferior or superior sale to make a lender happy. Another thing you missed is that my report included four sales and two active / pending listings, two of the sales were thirty days old and all were sold/priced above the sale price of the subject. An unsophisticated buyer or low end desk jockey might need this explained to them but a RE professional should see an underpriced property fairly clearly. And if I need to produce a less than credible report to stay on some lender's list, well so be it. That's actually why we have USPAP, rules and regs anyway isn't it?

 

[Dublin ohio]

Let me guess, you're a reviewer! I would be snarky and ask if you actually read my post and the comments, because I assume not. I challenge you to produce one shred of evidence that bracketing the sale price has been "a standard for a while". Assuming you are a RE professional I would think it would be easy for you to figure out why the sale price wasn't bracketed. Here, I'll help you... as has been stated a couple of times here IT WAS OBVIOULSY UNDERPRICED. So, according to your reasoning I am supposed to go find some inferior property that sold for less than the subject to make some UW happy. I suppose it it were priced significantly higher by some illogical seller and an overzealous Realtor I would go find some superior sale simply to bracket the sale price. While you are correct USPAP doesn't mention bracketing, and actually says very little about comp selection beyond the requirement to produce a credible report. IMO a credible report includes the best and most comparable sales available, not some inferior or superior sale to make a lender happy. Another thing you missed is that my report included four sales and two active / pending listings, two of the sales were thirty days old and all were sold/priced above the sale price of the subject. An unsophisticated buyer or low end desk jockey might need this explained to them but a RE professional should see an underpriced property fairly clearly. And if I need to produce a less than credible report to stay on some lender's list, well so be it. That's actually why we have USPAP, rules and regs anyway isn't it?

Seems to be a trend I have noticed in numerous threads. Some of those replying seem to be a little frogy lately. Jump first then read.

 

[shrubberyvaluation]

you are telling us the underwriter wants a lower sale, ok. yet, you haven't explained here why you didn't do that in the 1st place.
some of you here are defending the appraiser, yes USPAP doesn't say bracket, but bracketing sale price has been a standard for a while. but i haven't heard why they didn't bracket the sale price.
all the sales were higher? no lower sale? no explanation? sometimes that happens, but am i supposed to guess why?
don't bracket, it don't bother me. your clients will find someone who will next time. that's your business decision.

I did a family sale recently. Should I put in some distressed sale that is no where close to the well maintained property to bracket the contract?

 

[Tawfik Ahdab]

Shrub, that what I’m getting from Tom D as well. Just find some sale, any sale, an REO, a teardown, bare land even: as long as you bracket that sale price, you’re golden.

That’s supposed to be sound appraisal practice. And everybody does it, don’t you know.

 

[Mike Ault]

This is what we certify to in a typical lending report –



Nothing in there that excuses an appraiser reciting comparables that are dissimilar just to keep some cubicle dweller at bay. "Just say no" as Nancy Reagan used to say and put that client on your "Do Not Service List". Here's how I respond to stipulations like that and I have yet to hear back from any underwriter. Never lost a client over this response either.

1. Please extend your search parameters or provide a listing comp to bracket the condition of the property. No more relevant comps were found for comparison, the concept of extending search parameters as far as necessary simply to bracket some particular amenity with location and time adjustments impossible to quantify is poor appraisal practice and would impact the credibility of this appraisal. Appraiser thoroughly examined Letter of Engagement for this assignment, the preprinted Scope of Work on the requested appraisal form and the latest Fannie Mae Selling Guide and found no mention of a requirement to bracket all of subject's amenities.

Feel free to use the above and if you come up with a snarkier response please share! Underwriters interfering with the development of the appraisal to make properties appear more conforming to their market area than they actually are so their loan file is easier to peddle to an investor is a widespread problem in this industry.

 

[Andee]

I had one recently that was a family transfer and they came back asking me to bracket the "Total Room Count" of a 3 bed, 2.0 bath dwelling, that had a kitchen, living room, and dining room. I wrote back, stating that total room count is not a factor for a 1,660 sf dwelling, the comparables had a dining room and breakfast nook. The living room for this property was really large in comparison and if planned better by the architect, it could have had 2 dining areas but didn't. The only model match available had a pool, closed a year earlier above contract, with a DOM of 0, and I wasn't adding it in. They never responded back. Some of these stips are getting dumber and dumberer...

 

[andrew81]

I have provided to the best of my knowledge and belief the best sales available. The property is located in a rural area in which there is a shortage of truly comparable sales, because of the nature of the property improvements and the relatively low number of sales transactions in the neighborhood, I need to use as comparable sales properties that are not truly comparable to the subject property. There are no other sales which are felt to be in my opinion comparable that would enhance the credibility of the report. As an appraiser I am to be impartial and not allow assignment conditions destroy my objectivity and independence required for the development and communication of credible results, and can not allow assignment conditions that limit the scope of work to such a degree that the assignment results are not credible.

 

[sputnam]

The issue isn't whether it makes sense to bracket the contract price or not. The issue is whether the Client requested that you do so as part of the assignment request. If they did and you accepted the assignment, you do it.

 

[J Grant]

I submitted a USDA report, opined value is bracketed both within unadjusted sale prices and adjusted values. The supported value is higher than the contract price. The underwriter is demanding I bracket the contract price... has anyone ever heard of this?

If find the way you describe it above confusing..

If the highest unadjusted sale price of the comps is lower than your market value opinion, it is common for an UW or reviewer to ask for a higher priced sale to bracket because without it, you have opined a OMV higher than any sale price of any of the comps. The person asking for it may have explained it poorly ?

There is a mention in fannie guidebook ( don't ask me to find it ) where they say sometimes a less comparable property is used because it is an indicator of value. If here is truly no other higher sale found, then there is none. But if some are found, then what kind of properties are they ? Even if a higher price sale is less similar than the comps you used, it imparts information. If the less similar but higher or same price sale is superior in size or acreage etc, is it possible the buyer is over paying for subject when they can get a better property for the same or similar price ?