Is the term 'price point' value a dangerous term.

[alebrewer]

Maybe an avm can, are they ever sued or stipped.

Even AVM's include confidence intervals.

 

[J Grant]

I was more thinking about what buyers, sellers, and realtors were thinking how our value is supposed to be looked at. Now lenders, etc, i can understand their need for a price point decision.
But, those are 2 different users definitions of price point to 2 different classes of people using it. Why even use picking a price point, just say market value. How about estimated price point.

I think we are good, but not perfect to determine a specific point in a range, as being a guarantee to every party. Maybe an avm can, are they ever sued or stipped.

USPAP does not demand perfection ( it even says that!! )

We know tht the public might have all kinds of views about values, market value, and appraisals but we have to shut out that noise. If the purpose of the assignment is a point value as the expectoin from a client, then we provide as much support for why that point value is X $ as we can. The client or reader should actually conclude the same . Of course, someone with a vested financial interest like a RE agent will argue the point value if it does not meet their needs of getting a deal done. The appraiser can get thrown off by that. Don;t let it throw you off.


I think we are good but not perfect at determining a specific point in a range as a guarantee to every party.

Where does it say , on the appraisal, that we are "guaranteeing a point value to every party??? It DOES NOT say this ! This is a guilty assumption appraisers make when they start trying to please a RE agent or seller and forget tht their client is the ONLY party that the appraisal serves.

The appraisal says the OPPOSITE of a guarantee to every party! The appraised value specifies our market value opinion and applies ONLY to the client and assigned intended users !! Understand how that protects us.

Stop worrying about an AVM. An AVM is no better than an appraisal,, just different. It has limited use because an AVM can not be sued or have stips.

 

[J Grant]

The reason value does not exist as a point is because value is an opinion, and regardless of how well developed and supported an opinion is, it is an opinion nonetheless. Opinions are predictions that carry some level of ambiguity - ambiguity RE what happens tomorrow, ambiguity from subconscious bias, ambiguity due to trying to predict behavior that is often based on emotions, etc. There is, by definition, a level of confidence to be associated with any opinion. To Tom's point, buyers even exhibit this behavior - if only in a crude manner.

Well yes, a value is an opinion ( and an opinion is an appraisal, USPAP)

How hard is to understand that is the very product we provide??? It is like telling a person who sees that they are not blind. What do you think we are doing? The problem is, reading your poss, you are internally misled about what we are doing.

A market value opinion is NOT a prediction of an exact price that is expected to occur in the market !!! Which is a concept.

That is why the appraisal states the MV opinion is as of X date and for the named client and intended users only. Noboyd else. No expecstin it is a magic act predioon of a real price on some amorphous date.

Buyers do what they do and we analyze it as part of the appraisal.

 

[alebrewer]

How hard is to understand that is the very product we provide???

If that product (or service) includes a point value, its very easy to understand what we provide - we provide something that doesn't exist IRL. It's like a gal who builds dinosaurs. Yes - the gal builds dinosaurs, but they're not real - they're made up. So long as everyone knows point values don't exist IRL (and I think most do), there's no issue. I do believe, however, there is potential for point value appraisals to be misleading insofar as there ARE folks who actually believe that point value is the 'real' value.

 

[BRCJR]

In a perfect world, a lender client would be easily allowed to lend within a percent of our point value ( lend within 3% up or down from it for example.

They already can........it is called a credit decision. Some lenders lack common sense and if it does not fit into a "perfect world" box they decline or reject the deal.
It is only a policy exception if the loan amount exceeds a regulatory LTV.

 

[glenn walker]

Geez the value versus price issue has sent her off the rails again.

 

[Artemis Fowl]

She should sit in on some appeal pre-trial meeting value negotiations...her head would explode.

 

[glenn walker]

My final point of the most probable point of value is $500,000....lmao

 

[glenn walker]

The funny part is it's the pre printed form that screws up their heads. If the Fannie Form said Final Price or Point of Value is __________ that same appraiser would fill in the line. It's all about the form nothing else. Their thinking is convoluted and their trained to live and die on a form.

Take the form away and there couldn't be a value--price--or price point because there wasn't a form to define it.

That's why Fannie created forms so no independent thinking could F things up. They were correct you have to train people to be form fillers and box checkers.

 

[Surf Cat]

You are kidding, right? It shows up all the time in posts, and in fact, Surf Cat said it in her post (I called her on it.)

Geez.... even though I posted photos of myself here on the Forum and Little Miss Can't be Wrong commented on them, she mis-genders me.... isn't that a penalty for the lunatic left or something?

They literally say, in posts here over the years, "Nobody is that good"

You’re not either.... they don't frame your appraisals and put them up on a wall....

They are not arguing that point values don't exist; YOU are arguing that point values don't exist, and that is a weird argument because point values exist in USPAP and in appraisal.

NO ONE is arguing that point values don't exist! EVERYONE here that provides Appraisal Services puts them into their reports. The point value however, is subjective and an opinion as it's derived from the adjusted range and tweaked a tad more via weighting. 5 appraisers for the same property will have different pinpoints..... but a similar range. Who here is "good enough" to pinpoint "the right value" when the spread of the range is 3% to 4% You? How about a complex assignment where the spread is more like 10%?

Let me ask you something.... you have a purchase assignment. Contract is for $680k however, your highest adjusted sale comes out to $674k. BTW.... this is your number one client. What do you do?

Per USPAP regarding the word "point".

1) the type of assignment in each request described in the Background section of this Advisory Opinion is an appraisal. If an appraiser is asked whether a specific property has a value (a point, a range, or a relationship to some benchmark), that Prequest is for an opinion of value (an appraisal). Appraisers, obligated to comply with USPAP, must develop a real property appraisal in accordance with STANDARD 1. Reporting that value opinion must be accomplished in accordance with STANDARD 2.

Here's the concept of "a point" in reviews...

Illustrations of the Language in an Appraisal Review Report WITH an Opinion of Value The following are examples of language that signify a value opinion (i.e., either by concurrence or by indication of a numeric point, a range, or a relationship to a numeric benchmark). These examples DO constitute evidence of a value opinion (i.e., appraisal) by the reviewer, thereby making the appraisal review one that includes an appraisal.

• “I concur (or do not concur) with the value.”
• “I agree (or disagree) with the value.”
• “In my opinion, the value is (the same).”
• “In my opinion, the value is incorrect and should be $zzz.”
• “In my opinion, the value is too high (or too low).”