Active listings not considered?

[Lloyd Bonafide]

The principle of substitution for mortgage brokers is different than it is for apprasiers. To mortgage brokers, the principle of substitution mean that when you find an appraiser who won't hit the target value or "play ball", then you substitute another appraiser for him that will "play ball".

Very true!

 

[Mountain Man]

As an investor when I see something I'm interested in, I research to see what's sold lately. With markets the way they are, I want to see some activity within 3 months. Then I look at current listings to see what's currently on the market. Then I crunch my numbers to see what it'll take to beat my competition. No doubt about it, it's a blood bath out there now. If you miss the numbers because you didn't look at the competition then you will have a dam good chance at using your E&O.

 

[Blueprint]

As an investor when I see something I'm interested in, I research to see what's sold lately. With markets the way they are, I want to see some activity within 3 months.

You are always two steps ahead of the appraiser masses. Your CA experience, RA experience, cushioned experience with profitable flips, along with your positive mentality, is what will always keep you way ahead of the masses in the RE game.

Kudos to you Leggett. I respect you highly. You simply kick much *** in multiple arenas along with multiple markets. You make your reality look simple at the same time. You sell your realty well to the masses. I sincerely wish I could be your C trainee. You are motivation for me.

 

[Mike Garrett RAA]

The VA requires a statement from the appraiser.....

"I have considered relevant competitive listings and/or offerings in the performance of this appraisal and in the trending information reported in this section. If a trend is reported (which means increasing or declining market..my words) I have attached an addendum providing relevant competitive listings/offerings".

So, what does that mean? It means an appraiser, working for The Department of Veterans Affairs must look at listings as part of the appraisal process. When I research the market while developing the appraisal (the mental or thought process), I look at and create statistical data which includes active listings, pending and closed sales, expired and withdrawn listings. A summary of the market is included in the appraisal report.

On page two, I include information on active comparable properties as well as sold comparable properties. I might only grid three sales but I have looked at and considered many more. Should an appraiser grid listings? Maybe...but be very careful because your report might be misleading since you are adjusting from an asking price and not a proven sales price.

Are you adjusting those list prices to reflect the SP/LP ratio? Does that ratio apply to all listings? Maybe not. Will those sales include concessions? Maybe not. There is a reason why a residential appraisal is based on "closed sales". Do listings play an important part in our analysis of the market. Yes...but it is just one piece of the puzzle.

Too many people doing appraisals never experienced declining markets. One of the reasons to use older more mature and experienced appraisers....we have been through this before!