Bracketing the contract price

[mp2277]

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.

When have you ever seen in a LOE the requirement to bracket a contract price. Personally I have never. Furthermore bracketing the contract price is a useless as **** on a bull as my grandfather used to say.

 

[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?

WRT why I found the post confusing -

Above states Opined value is bracketed within unadjusted sale prices, ( It does not say the CS PRICE is bracketed within the unadjusted prices.)
Above states opined value is bracketed within adjusted values. ( It does not say the CS price is bracketed within the adjusted values )

It is not a USPAP requirement that a SC price be bracketed , however, a CS price is relevant in a purchase assignment so bracketing it is a common practice- for the appraiser to get a better read on the value and for the client to see if a price represents an under or over improvement, or if a price substantially below or above prevailing prices for similar properties.

For a non AL sales contract price , it typically makes no sense to try to bracket it because a non AL contract can produce prices far outside a prevailing range - which makes it easy to comment on

 

[Dublin ohio]

Above states Opined value is bracketed within unadjusted sale prices, ( It does not say the CS PRICE is bracketed within the unadjusted prices.)
Above states opined value is bracketed within adjusted values. ( It does not say the CS price is bracketed within the adjusted values )

What is confusing. The words price and value? Other than that. What is hard to understand. All comparable sales sold for more than contract price. All sales adjusted higher than contract price. Period.

 

[Mike Kennedy]

J GRANT "however, a CS price is relevant in a purchase assignment" -

how so?? it is mutable, it is a "wish, hope, dream and a guess" only by parties involved in a possible sale of a subject property.

"Market Value" - It may or may not be supported by the actions of other sellers and other buyers of OTHER properties. (note whether a pending purchase assignment or other assignment is irrelevant) - what did OTHER typical buyers of the most recent, proximate, and directly competitive OTHER properties pay based on the Principle of Substitution.

i.e. IF a subject was to sell to OTHER buyers what does the competitive market data illustrate current Market Value is on a particular date.

 

[J Grant]

What is confusing. The words price and value? Other than that. What is hard to understand. All comparable sales sold for more than contract price. All sales adjusted higher than contract price. Period.

It still is confusing to me. The value was above the CS price, but within adjusted prices?
If the OP posted the OMV and the SC price and the prices of the comps and adjusted range I could make sense of it. Maybe just drawing a blank idk

If the prices were all higher than the subject SC price, were there lower price or same price similar comps? If a search was done and none found, then none were found. Comment on any known reason the CS was lower and end of story.

If that was the case, either the UW was ignorant, or perhaps they saw a sale or other data they thought needed to be addressed. The lenders and agencies have other appraisals on a same property now available and data as well. Sometimes they see something we miss. Or not.

 

[Dublin ohio]

If the OP posted the OMV and the SC price and the prices of the comps and adjusted range I could make sense of it. Maybe just drawing a blank idk

An example. Contract price 200k. Unadjusted sales sold for 215k, 225k, 235k. Adjusted they come in at. 223k ,228k, 230k. OMV=227k. OP stated no "comparable" sales available to bracket contract price.

 

[Tom D]

i think bracketing is mostly alright, but i understand. i had one that sold above the list price with higher comps. i called the realtor, and asked why such a difference. the owners were moving, they were happy with the price that they wanted to list it at, bought the home long ago. the realtor thought they were being low, but why fight them. well, in this market we have multi bids. i wrote why it was a low listing. also, on page 1, under listings, was it noted that the property was listed below competitive properties? i've had sales where i couldn't find a lower sale price, but i had a gap in the prices which i showed and noted. never a comment back. also, it depends on the lender's tolerance level.
mp227 i have no problem with you saying 'no comps'. the underwriter, lender, didn't see what you saw. it is possible a perception of picking only high sale comps. the only answer being 'no comps' would make me look more at your area, just because it is not a common thing. when i did review, i wasn't ever concerned about bracketing. bracketing is a more recent thingy being inflicted.
it is funny that your sales are higher, and a higher appraised value. if the comps were close & similar wouldn't that be enough to consider original sp as being safe. guess not.

 

[Cob]

They want a comp that brackets the contract price which is lower than the value and all of the four comps and two pending listings.

As my old boss used to say, "We aren't appraising the contract."

 

[mp2277]

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.

If that were the case then you wouldn't be reading this thread because it wouldn't exist!

 

[mp2277]

Hello Peeps! I hope you all had a great Thanksgiving weekend. I turned my computer off Wednesday night and didn't even think about work until yesterday morning. Halleluyer! Anyway, apparently the UW shut up and went away because I haven't heard anything else. The reason I'm commenting is to say this... after reading SOME of the comments here and assuming that SOME of the commenters do reviews, I now see very clearly why I get some of the asinine requests and comments I get from reviewers. Some people can't see the trees for the forest LOL