How do you reply to these revision requests?

[ZZGAMAZZ]

What's happening RIGHT NOW in Austin is that the sales that are 4-6 months old sold for WAY MORE than 0-3 month old comps, which are the most current, 4-6 months ago when people were purchasing properties as if they were crazy AND drunk, all the Realtors comments were, "well all these recent sales (30-45 days) are really reflective of the market", NOW all the Realtors comments are that the sales from 4-6 months (older) are reflective of the true market, since they were higher.

I have appraised in Austin for 22 years, the values have gone up and down several different times in the past 22 years, Austin also has TONS of different market areas like many large cities, the entire City of Austin hasn't experienced 40% appreciation annually for the past few years, sorry, but when I see properties sell for $605,000 that were listed for $440,000 in a subdivision where the highest sale EVER was $500,000 like I saw last July/August and now that same subdivision is back to $500,000-$515,000 max, to me anyway, those houses that were under contract for $605,000 are NOT the true market.

Just because some market data is current, doesn't always mean it's correct, especially when people are NOT making rational decisions when purchasing a property.

I'm surprised that the AF hasn't recoiled in response to your comments about "rationale decisions," because you, especially as an appraiser, cannot make that call without supporting data. (IMO)

 

[JeffSH]

However, the pending's have not closed yet, so they are not as reliable.

In a normal market of course this is correct, but this isn't a normal market. There are 10 people lined up to submit the same offer. If the financing were to fall through, the next contract price will be even higher. You have comps to demonstrate this. This isn't the old times of 90-day exposure, homes sell in under 5 days (pending financing). When there are ten people lined up to submit a pre-qualified offer, how can you treat that differently than a closed sale? The only difference is the bank paperwork has been completed.

They are the most recent indicators of PRICE in the fast changing market.

All of the comps are indicators of price. Value is a price. Nowhere in the definition of market value does it distinguish between prices, closed sales, pending sales, etc. You can even use active listings as price indicators.

 

[Michigan CG]

I'm one year in to being certified here ..................

You got a license and left your mentor right after getting certified? That was most likely a mistake.

 

[Michigan CG]

If they couldn't sell the steaks at $25/pound, they wouldn't price them at that point. But they can...

Correct me if I am wrong but supply and demand are basic high school economic classes.

 

[Michigan CG]

Then maybe you have a reading problem ? Are u still trying to figure out estimate or opinion lol....

You have had a credibility problem for about 20 years.

 

[Michigan CG]

My hat is off to you. You are one in a million. I suppose they all answer their phone and return your calls? By the way, where is the USPAP requirement that appraisers must call real estate agents?

1-4. I suggest you read it.

 

[shrubberyvaluation]

Correct me if I am wrong but supply and demand are basic high school economic classes.

They teach economics in high school?

 

[J Grant]

Say the market is increasing substantially. Virtually all homes have multiple offers and are selling at or above list price. After all adjustments except for time, this is the best data.

Sale1: $95k - 1 month ago
Sale2: $96k - 1 month ago
Sale3: $92k - 2 month ago
Sale4: $90k - 3 months ago
Sale5: $100k - pending
Sale6: $101k - pending

The subject is under contract for $100k.

All the comps sold quickly, at or above list price. You verified that the pending sales had multiple offers and are likely selling at or above list price, but the realtor won't confirm because of confidentiality.

None of the comps stand out as being significantly more similar to the subject. The comps have similar gross adjustments. The pending sales are just as similar as the closed sales.

In this situation, the best data points I have are the pending sales. They are the most recent indicators of value in the fast-changing market. I would use the pending sales as support for a time adjustment that would most-tighten the range. I would reconcile the subject at $100k, even though it is not bracketed by a closed sale.

I ran into this a lot during the summer. If I get a revision request about the unbracketed sale price, I just explain my reasoning and state that it's not a Fannie rule.

If the question asked was what is your opinion on what the property would sell for on market on current eff date,, answer is 100k
But that is not the question being asked. in an appraisal. The question asked is what is your market value opinion of the property.

The support for 100k comes from two pendings and the only way to get to 100k from the 4 recently closed sale comps apply a huge jump in price market condition adjustment. If one instead made a market conditin adjustment based on yearly appreciatin, the comps would all still adjust in the 95-96 range. So what is the market value opinion comprised of, doing whatever it takes to reach a next price jump seen in a pending , or applying all the other appraisal methodolgy and considering the closed sale comps more ?.

 

[J Grant]

In a normal market of course this is correct, but this isn't a normal market. There are 10 people lined up to submit the same offer. If the financing were to fall through, the next contract price will be even higher. You have comps to demonstrate this. This isn't the old times of 90-day exposure, homes sell in under 5 days (pending financing). When there are ten people lined up to submit a pre-qualified offer, how can you treat that differently than a closed sale? The only difference is the bank paperwork has been completed.




All of the comps are indicators of price. Value is a price. Nowhere in the definition of market value does it distinguish between prices, closed sales, pending sales, etc. You can even use active listings as price indicators.

Value IS a price?
What kind of value...appraisals have to state the kind of value in a definition.

The definition of market value is a most probable price at a set of MV terms. But the definition of market value is not the same thing as an opinion of market value. In appraisals, we give an opinion of market value..

If 10 people submit offers on a bid, it is extremely rare that all 10 submit the same offer. Usually some offers are higher than others, or some all cash etc.If 2 offers are the highest and the 8 others lower, 8 buyers did not think the property was worth the higher winning price. Was the winning high price affected by undue stimulus of the bidding war ?> Some appraisers never consider if it did.

Prices exist as numbers, numerical dollar amounts. Values exist as concepts that frame the numerical dollar amount. A price is the number . A market value opinion is number produced by the appraisal, that occurs at a specified set of sale terms ( the market value definition of price terms , "as defined"

 

[glenn walker]

We have always sold our properties by $$ or a price and allow the appraisers to insert the word value because I know we have never sold a property where the Price and Value were truly equal and yet 95% of the time the appraisers OMV is the same as our high prices. That make me feel good as I know in my heart there is no difference between a Price and Value as value can only be weighed after someone closes escrow and lives in it fora while. Once they find out the positives and negatives then one day they know if their purchase was based on a value or an-emotion.