Typical for the market

[NC Appraising]

I guess if it happens yesterday..it becomes typical for the market. What is the uad 3.6 stance on typical for the market?

One big scam....and skippy the new construction appraiser is in on it. Will they ever be caught? Nope. The GSEs and HUD/FHA are just enablers.

Major Builders Lean Into Concessions and Rate Buydowns as Home Sales Slip

Major homebuilders are seeing decreasing sales and margins amid buyer uncertainty, but continue to utilize concessions to bring in sales

www.realtor.com

 

[alebrewer]

IMO, the only way to adjust for concessions is to estimate their effect on the sales price. Which usually means you apply all other adjustments first, then see if the adjusted values of the sales with concessions are higher than the other sales.

 

[sputnam]

I guess if it happens yesterday..it becomes typical for the market. What is the uad 3.6 stance on typical for the market?

One big scam....and skippy the new construction appraiser is in on it. Will they ever be caught? Nope. The GSEs and HUD/FHA are just enablers.

Major Builders Lean Into Concessions and Rate Buydowns as Home Sales Slip

Major homebuilders are seeing decreasing sales and margins amid buyer uncertainty, but continue to utilize concessions to bring in sales

www.realtor.com

UAD 3.6 doesn't change the principles and methods of analyzing markets. It changes the reporting requirements if you are doing an appraisal for Fannie/Freddie.

 

[J Grant]

UAD 3.6 does not change the appraiser's analysis, it does make it harder to get there imo. It restricts choices very often to drop-down choices, and if the choice is not in a drop down, such as "upgrades," then the 3.6 becomes hell on earth to get the simple word "upgrades" reported as a line item that is not rejected as a "field violation." The same roadblock problem applies to photos.

That aside, new construction is a rigged market by builders - they are allowed by the GSE's to use their own "preferred lender" for financing- that lender basically rubber stamps every price no matter what, and the builder as an incentive for a buyer to use their "preferred lender," offers big $ concessions or "free" upgrade packages to buyers who choose this lender.

That the GSEs allow this speaks volumes, but then again we are in crazyville now, where Gig hired non-appraisers get "professionally trained" with a six-hour course and then they go onsite to do a "data collection" instead of the appraiser going onsite to do an inspection, and a vested-interest agenda lender or the seller can estimate the property value in a Waiver

 

[NC Appraising]

UAD 3.6 doesn't change the principles and methods of analyzing markets. It changes the reporting requirements if you are doing an appraisal for Fannie/Freddie.

Agree. But their wording just fuels the fire for the appraisers that live and die by the typical for the market.

Go to the uad 3.6. Click the known sales concession...click yes. The magical question comes up....typical for market?

Why? Why? Why? Bad wording.

I realize this is for the subject only and why it is being asked by the GSEs...i get that. But give a skippy appraiser (a weed) a inch, they will take a mile.

They will see typical for market and correlate that with the comps. You know that is what is going to happen.

Subject has 30k in concessions...
Comps have 30k in concessions...
Must be typical for the market.

 

[J Grant]

Builder's first few contracts or closed sales can be straw buyers to set the first round of comp prices to be used on future appraisals or valuations.

 

[NC Appraising]

Contract section of uad 3.6 uses typical for market.

Show me where in the uad 3.6 definition of market value says typical for market.

Sorry, but typical for market has been a thorn in my side for 20 years.

Read almost any appraisers report where they do not adjust seller concessions...they will almost always have a canned statement that says....sc was not adjusted as they are typical for the market.

Typical for the market is totally different from any adjustment should approximate the markets reaction to the financing or concessions based on the appraisers judgment

 

[Gobears81]

Contract section of uad 3.6 uses typical for market.

Show me where in the uad 3.6 definition of market value says typical for market.

Sorry, but typical for market has been a thorn in my side for 20 years.

Read almost any appraisers report where they do not adjust seller concessions...they will almost always have a canned statement that says....sc was not adjusted as they are typical for the market.

Typical for the market is totally different from any adjustment should approximate the markets reaction to the financing or concessions based on the appraisers judgment

What is unfortunate is that the increase in concessions is indicative of late-cycle behavior, but when values turn down and more foreclosures start popping up, the appraiser bears the blame. I saw this in 2008 and all of the sales taking place above the listing price because of the additional concessions loaded in were not above market because all of the sales had these concessions too. Hearing about more seller concessions than previously, not to mention that the assessors will also be more than glad to embrace the typical concessions when chasing sales.

 

[alebrewer]

Appraisals are, by definition, based on historical events. And typically there is a lag between appraised value and 'real value' - both when the market is moving up, as well as when the market is moving down.

 

[NC Appraising]

What is unfortunate is that the increase in concessions is indicative of late-cycle behavior, but when values turn down and more foreclosures start popping up, the appraiser bears the blame. I saw this in 2008 and all of the sales taking place above the listing price because of the additional concessions loaded in were not above market because all of the sales had these concessions too. Hearing about more seller concessions than previously, not to mention that the assessors will also be more than glad to embrace the typical concessions when chasing sales.

Great point.

In the long run, the buyer gets it on both ends. A inflated home value and higher taxes!

We all know the truth...the last thing a builder wants to do is lower the price. Oooohh the headlines....and the pissed of owners that purchased several months ago.