MV opinion vs a price estimate

[J Grant]

FWIW. Somewhere, years ago. I read something like: Only the courts and the parties in a transaction determine price. Appraisers provide a value. Or something like that.

Interesting.
Appraisers typically provide an opinoin of value, but that value can be a price $numerical $ amount - but it is a model price belonging to the appraisal, not an actual price in the market. .

As the court recognized, Actual prices are determined by parties.

I believe an appraiser can give an opinion of price if they state that is what they did? Though I am not sure though how that flies with USPAP or if it is consulting instead of appraising ?

 

[J Grant]

It's already stated in the definition of market value. "most probable price..." You think it's some gotcha, but there is absolutely nothing wrong with saying something like, "based on the data and the value definition, the most probable price of the subject is $" I wouldn't do it. But it's not wrong.

It would not be wrong if the appraiser stated what they did and did what they stated. (If there is no statement purpose of appraisal is an opinion of market value,, ) And it states The purpose of appraisal is a price , and then you sign off on "based on the data and the value definition, the most probable price of the subject is $" . it is not wrong, because it is not misleading.

However, as you said, you "wouldn't do it " because you know it would disqualify most appraisals ( esp for lending) from being accepted..

 

[JeffSH]

However, as you said, you "wouldn't do it " because you know it would disqualify most appraisals ( esp for lending) from being accepted..

I wouldn't do it because it's wordy and the definition of value is already stated. The statement I made is perfectly acceptable and wouldn't disqualify any appraisal.

 

[Peter LeQuire]

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[J Grant]

I wouldn't do it because it's wordy and the definition of value is already stated. The statement I made is perfectly acceptable and wouldn't disqualify any appraisal.

Then why are you not making that statement if you think it is acceptable ? it has nothing to do with it being wordy, it is rather succinct. What does it have to do with the definition of value already sated? We are not doing a "definition of value " purpose appraisal , we are doing an opinion of market value purpose appraisal.

You fail to understand the problem with your making that price statement is it would 1 ) contradict the stated purpose of the appraisal, which is an opinion of market value and 2) on a URAR form we are not allowed to modify or change the printed statements.

 

[J Grant]

Below from the URAR

Based on a complete visual inspection of the interior and exterior areas of the subject property, defined scope of work, statement of assumptions and limiting conditions, and appraiser’s certification, my (our) opinion of the market value, as defined, of the real property that is the subject of this report is ( X $ )


( As defined ) 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, each acting prudently, knowledgeably and assuming...( to the end of the definition)

The definition of market value serves as a qualifier ( as defined )-and is there so the appraiser ( and client/users ) understand the type of value being sought for the most probable price.(of X $ )

 

[J Grant]

The purpose of this summary appraisal report is to provide the lender/client with an accurate, and adequately supported, opinion of the market value of the subject property.

Top of URAR page. That "summary" is gone aside, it states "The purpose of the appraisal is to provide an accurate and adequately supported opinion of the market value of the subject property. "The fact there is a definition of market value in the report to qualify the price, does not make change this.

 

[JeffSH]

"The purpose of the appraisal is to provide an accurate and adequately supported opinion of the market value of the subject property. "The fact there is a definition of market value in the report to qualify the price, does not make change this.

My opinion of value is based solely on the value definition.....

You are being sooooooo narrow-minded. Have you ever done a non market value appraisal?

 

[J Grant]

My opinion of value is based solely on the value definition.....

You are being sooooooo narrow-minded. Have you ever done a non market value appraisal?

Sorry to keep on but...

Our opinion of value is supposed to be based on the appraisal development. And the value definition used is the type of value and set of terms for it ( as a most probable price $ amount )

I am not narrow minded, but I am telling you what the terms and statements mean per USPAP in a market value appraisal (which makes up the bulk of work )

The only non market value appraisal I did was one based solely on a cost result. What kind of "non market value" appraisals do you do?

 

[JeffSH]

Sorry to keep on but...

Our opinion of value is supposed to be based on the appraisal development. And the value definition used is the type of value and set of terms for it ( as a most probable price $ amount )

I am not narrow minded, but I am telling you what the terms and statements mean per USPAP in a market value appraisal (which makes up the bulk of work )

The only non market value appraisal I did was one based solely on a cost result. What kind of "non market value" appraisals do you do?

Liquidation mostly. Marketable cash value for a divorce. One time I was asked to appraise a small piece of land being transferred between neighbors that had no independent legal use. I determined an equitable value. In all of those cases I determined a price............because value is a price, regardless of the specific value definition.