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2018 San Jose Neighborhoods Top The Nations Hottest List

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hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
From the article:
She’s also noticed something else: “What we’re seeing is a disregard for recent comparable sales and people deciding what the home is worth to them and just giving that as their offer.”

I recall, back in the pre tech-bubble, some purchase contracts had a disclaimer that went like this:

The client(s) are advised that their purchase offer may exceed the market value and the appraised value of the home.​

This becomes a challenging market to appraise in (and all the areas cited, many of which are not in San Jose proper, are markets where I appraise). By definition, in a rising market, one sale is going to exceed the sale price of every other sale. By definition, that is the expectation in a rising market. Appraisers who rely on historical data without taking into consideration the market conditions will find the challenges to be greater.
On the other hand, I can think of no better comment to put into a report in regard to the appraised value being below a purchase contract as evidence of a non-market purchase price-point then the agent's disclosure above (if it comes back again):

As noted, this market is experiencing significant appreciation. By definition, in such a market, there will be one sale that is higher than its competitors... until such time when the next sale exceeds its price. This is what constitutes a rising market. I've considered this dynamic (summarized in my market analysis) and have applied market-based adjustments to reflect this condition to the historical sales; my final opinion of value is, therefore, higher than the last closed comparable but consistent with the rising market. However, I do note that it is lower than the purchase price. Such conditions are not unusual in this current market environment. Indeed, included in purchase contract is the following advisement from the real estate agents, the local sales experts in this market:
The client(s) are advised that their purchase offer may exceed the market value and the appraised value of the home.
In this case, the real estate agents are correct; the purchase price exceeds the market value for this property, to which the buyers have been advised may be the case.
Who's going to argue with that? ;)
 
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AMF13

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
Who's going to argue with that?

Anybody that doesn't like your number. You don't need a leg to stand on or any actual facts to try and argue something. :leeann2:
 
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