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

[J Grant]

J.G., your perspective re the distinction between value and price expressed a few months weighs heavily every time I cross path with a . . . Value! I personally appreciate the nuances you discuss. And I'm wondering about your comments above as they pertain to appraisals for legal matters, i.e. is the significance of an Opinion elevated to became Fact once it is accepted, or confirmed, judicially? Way beyond my SOU (scope of understanding) but do court cases about appraisals cite prior legal cases, like in the movies???

People, can make it much too complicated.

Just follow appraisal methodology and USPAP. We deliver opinions of market value, not estimates, guesstimates, or most probable point price value, or other invented terms. A point value is just a way to express MV ( a numerical or point value vs a range or benchmark).

Most probable price appears in the MV definition , which defines the set of terms and conditions that would result in the most probable price, to define the ty[pe of value sought ( market value in most assignments ). The MV definition lets an appraiser vet and analyze prices of a subject contract or a comp price, where the terms of sale and motivations of the parties are consistent with the MV definition.? That might qualify or disqualify CMPs and could explain a price as well as analyze it as an indicator

Most probable price btw can be a low or high price, whatever is "probable" considering the quality or defects of the subject and market conditions at the time. or a penlevfeta

 

[J Grant]

J.G., your perspective re the distinction between value and price expressed a few months weighs heavily every time I cross path with a . . . Value! I personally appreciate the nuances you discuss. And I'm wondering about your comments above as they pertain to appraisals for legal matters, i.e. is the significance of an Opinion elevated to became Fact once it is accepted, or confirmed, judicially? Way beyond my SOU (scope of understanding) but do court cases about appraisals cite prior legal cases, like in the movies???

An opinion does NOT become "elevated to fact once accepted!"

Just keep it simple, an opinion is an appraisal and it is prepared as a value model for a client's use. The end . The fat lady sung. .

Dont' worry about court cases unless you are doing work for legal purposes - if you go to court, understand that an opinion is not a fact. Taht protects you.

 

[Terrel L. Shields]

do court cases about appraisals cite prior legal cases, like in the movies???

My case is recited frequently in court, not only in an appraisal context but more broadly in a statutes of limitations context. SCOTUS in a long ago decision made it plain that there is an element of uncertainty in some appraisals, but not all opinions are equal. Some guesses are better than other guesses.

 

[J Grant]

My case is recited frequently in court, not only in an appraisal context but more broadly in a statutes of limitations context. SCOTUS in a long ago decision made it plain that there is an element of uncertainty in some appraisals, but not all opinions are equal. Some guesses are better than other guesses.

It is not a guess, it is an opinion ( an appraisal) .

Appraisers do not guess values, nor make factual price points, nor make value estimates-

We provide an opinion of value and our opinion is the appraisal (USPAP defines an appraisal as an opinion ) . The fact that we took all the steps in the appraisal to arrive at our opinion is what sepeartex it from being a "guess."

 

[Terrel L. Shields]

It is not a guess,

That's not what the court said.

 

[glenn walker]

Value is printed on the form but nobody can define what value is because it means something different to each buyer and seller.

It's all about ones perspective, like a garage is to most women a value is to park her car in but to men it's a work shop or man cave to hide in to get peace.

The reason value is used versus price is the attorneys in order to seperate appraisals in law and litigation had to define a final price in a more defensible way and once it's called Price it becomes a product like buying a car where people negotiate over price not value.

Therefore to allow Realtors and lay people to value real estate it's defined as Opinion of Price or Price Opinion but the final conclusion after negotiations is always about the price, and individual values are just a added bonus.

EXAMPLE-- I may over pay intentionally to buy a home next door to my old mother that's the value portion of my price' But no other buyer would pay more for a benefit that had no value to them. That's why value is purely subjective but price is the real cost.

 

[J Grant]

That's now what the court said.

I don't know who said what in a court - and it's not NA, what words a non-appraiser judge might use.

Our professional standard is USPAP, and USPAP defines an appraisal as an opinion. Keep it simple-

 

[Surf Cat]

It's all about ones perspective, like a garage is to most women a value is to park her car in but to men it's a work shop or man cave to hide in to get peace.

LOL

 

[glenn walker]

USPAP needs to be revised to follow teal estate law not to place the appraser in a position of violating law. The same with Pre Printed Fannie Certifications the final opinion of value needs revised if courts have ruled over and over that your opinion or experience won't save your license or bank account.

 

[J Grant]

Value is printed on the form but nobody can define what value is because it means something different to each buyer and seller.

It's all about ones perspective, like a garage is to most women a value is to park her car in but to men it's a work shop or man cave to hide in to get peace.

The reason value is used versus price is the attorneys in order to seperate appraisals in law and litigation had to define a final price in a more defensible way and once it's called Price it becomes a product like buying a car where people negotiate over price not value.

Therefore to allow Realtors and lay people to value real estate it's defined as Opinion of Price or Price Opinion but the final conclusion after negotiations is always about the price, and individual values are just a added bonus.

EXAMPLE-- I may over pay intentionally to buy a home next door to my old mother that's the value portion of my price' But no other buyer would pay more for a benefit that had no value to them. That's why value is purely subjective but price is the real cost.

Nope, a market value opinion is not purely subjective - it is a valuation model based on certain principles that exist in the MV definition, to lead to a credibly supported "market value."

Prices are facts, values are an opinion -and the appraisal has a MV definition which sets out the terms for the oponin - one of which states MV us what a Typically motivated buyer would pay, and a typically motivated buyer is not an individual who pays more to be next door to their mother, which addresses your example. Thus, if you wanted to use that sale as a comp, you might reject it when you found out the reason for the higher price, or you might include it as a fourth or fifth comp and give it less consideration and explain why.

You are bringing up examples of individual buyer perspective, which is called value in use. If 90% of garages are used to park cars ( in my experience that is what I see, ) the fact that some covert it to a man cave doesn't; matter much - again, it is the actions of the typically motivated buyers for that type of property which matters in a MV purpose appraisal.

Litigation makes up a tiny percent of res appraisal practice and most appraisers never go to court or go once or twice in an entire career.

Value is not just something printed on the form. Value is the purpose of the appraisal, and the value is defined in the MV defitno !! If an appraiser says they can not define it because it means something different to each buyer and seller, they need a refresher class-

In life, Value can mean something different to each buyer and seller , but for an appraiser, we arrive at Market value by using the "model" of the typically motivated and well-informed or well-advised as set out in the MV definition.