How do you reply to these revision requests?

[J Grant]

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.

You are intermixing how buyers /owners/sellers see value, and what an appraiser is supposed to do in an appraisal to arrive at a MV opinion.

What is true is what you said, wrt value can only be weighed after some time elapses - and THAT is why value uses past sales as the model ( in RE and other types of appraisals ) because we can only see patterns and perspective when enough time has elapsed and enough sales of other properties have occurred to reveal it.

RE appraisal allows for market conditions to bring past dated contract sale prices to current market conditions, so those appraisers saying pending are the best indicators because they are the most current - their tactic seems to instead of applying annual % appreciation to the sold comps as the market condition adjustment they use the $ price jump to the high price pending instead.

Adjusting the market by ignoring the past year patterns of a number of sales, and instead basing it one pending sale -that is not a market condition adjustment, (though they call it that ), it is tacking on a big $ amount to hit the high pending price .

 

[glenn walker]

Like Value -Whats Rational--most often both can only be measured at a much later date after the transaction has closed escrow. When a market is so heated that DOM is 0 to 15 and closed comparables 30 days ago there is no time between sales to measure anything but the sales prices as the Comparables sales prices are what we use not what their value was.

WHEN MARKETS are in let's call a normal balance and equilibrium and DOM was typically as long as three to six months and prices are fairly stable and not going up or down much we can start to measure peoples perception of value based on what they are willing to pay. In my current market for the past three years buyers had no time to think about value and each sale is just chasing the last high sale. The Problem with the entiree text book definition of market value is it was not written for markets that are extremely constrained by low listing inventory and more buyers than sellers or markets that everyone knows buyers are not acting rationally

My market has been an-Auction market for the last three years. Properties that have not had to be marketed just stick a sign in the yard and its gone i a few days where buyers had no time to think through what they would offer on price wise. This is why we hear the War-Cry of I Won The Bid-I Won The Bid. That is not really a definition of market value yet the appraiser only has one choice and that is to say his/her OMV was based on value . IT WAS NOT the appraisers value in that kind of market all he /she is doing is confirming that other homes Sold at similar or higher sales prices NOT similar market values. The Fannie certifications and forms make us sign a lie and they should really --Do the sales prices of your comparables support the Subjects Sales Price. Every Time I Sign A OMV I know in my heart all I did was confirmed a sales price or a that a lower sales price was warranted. In an-auction market I am a referee at a ball game where we are throwing houses back and forth between offense and defense and all I am doing is trying to keep everyone between the white lines.

 

[Ariba]

1-4. I suggest you read it.

You must have a different version of USPAP. Where specifically is the reference in USPAP that the appraiser must call the real estate agents/seller/buyers to verify comparable information? My version of USPAP does not have any specific rules or standards regarding the verification process.

 

[JeffSH]

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.

Per the definition of market value, our job is to determine the most reasonable sale price as of the effective date.

I'm not going to argue this truth again with you because it's pure insanity.

 

[JeffSH]

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..

I wish I could articulate how incomprehensible this is. Market value is defined in the beginning along with the scope of work. The conclusion of an appraisal and the market value definition are one in the same. Otherwise our opinions are just numbers with no defined relevance.

 

[J Grant]

Per the definition of market value, our job is to determine the most reasonable sale price as of the effective date.

I'm not going to argue this truth again with you because it's pure insanity.

It is not me personally, it is what the MV purpose of report says to do,

The definition of MV does not give us a "job". Our job, is to fulfill the purpose of the appraisal ( stated right on the top), which is to provide an opinion of market value.

Where does it say int he appraisal, " provide the most reasonable sale price as of the effective date " ? ( rhetorical question, it doesn't say that ).

The definition of market value defines it as the type of value developed in the appraisal and transaction terms for it ( price unaffected by concessions, undue stimulus, etc )
What you wrote is is not a truth, because it does not line up with stated purpose of appraisal.

 

[J Grant]

I wish I could articulate how incomprehensible this is. Market value is defined in the beginning along with the scope of work. The conclusion of an appraisal and the market value definition are one in the same. Otherwise our opinions are just numbers with no defined relevance.

No, they are not one and the same, and this misconception is what leads appraisers to give price opinions .

Market value is defined in the certs, as the definition. The conclusion of the appraisal is the opinion of market value, and the market value definition is the defined set of terms for the most probable price expressed in the MV opinion. Give me a moment and I will paste the statements from a URAR .

 

[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

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 $ , as of , which is the date of inspection and the effective date of this appraisal.

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,: This just summed up the appraisal !!.... my (our) opinion of the market value, as defined,

As defined is the definition of market value on certs page.

Nowhere in USPAP does it say the definition of MV and an opinion of MV ( an appraisal) is one and the same thing. Because they are not one and the same. The opinion of value is the appraisal, and " As defined " links to the type of value sought in the appraisal. The "as defined " MV definition is the transaction terms and conditions for the value type.

 

[JeffSH]

Where does it say int he appraisal, " provide the most reasonable sale price as of the effective date " ? ( rhetorical question, it doesn't say that ).

Market value is the most probable [sale] price that a property should bring in a competitive and open market under all conditions requisite to a fair sale....Implicit in this definition is the consummation of a sale as of a specified date [effective date].

I use "most reasonable" and "most probable" interchangeably. They mean the same to me. Obviously the definition is inferring sale price even though it isn't explicitly stated.

Market value is defined in the certs, as the definition. The conclusion of the appraisal is the opinion of market value, and the market value definition is the defined set of terms for the most probable price expressed in the MV opinion.

But I agree with this statement.

Can you give a concrete explanation as to why you wouldn't appraise the subject at $100k in my example problem? That would be most helpful in me understanding your point. That's why I came up with the problem to begin with.

 

[J Grant]

VALUE: the monetary relationship between properties and those who buy, sell, or use those properties, expressed as an opinion of the worth of a property at a given time. Comment: In appraisal practice, value will always be qualified - for example, market value, liquidation value, or investment value.

Above from USPAP - The "as defined" links to the MV definition as the qualifier for the type of value -stated in the appraisal opinion.