Agent Said They Paid As Much As Possible

[FMV]

Hey AF-
Good evening.. completed a 1004 Conventional today.. we are about 1,700 sqft.. all my sales that are higher GLA sold for less vs our Sales Price.. except one that I noticed that is fairly recent & is considerably less in GLA. After verifying sale info.. the agent mentions they borrower paid as much as possible to get the home. I understand Supply & Demand is crazy in TX right now.. but what do you say to something like that if they submit an ROV??
You know they will request why ray sake wasn't used. It is similar in updates only

 

[Randolph Kinney]

Use it and adjust for condition of sale - it was not the most probable sale price, buyer motivation.

 

[Tim The Enchanter]

It's an outlier, statistically.
Aka, the buyers were stupid.
As in, not typically informed and motivated.
That is how you shoot it down at ROV time.
Both barrels. Blammo!

 

[Tom D]

it's becoming more common when buyers lose the 1st house they wanted in a bidding frenzy. agent knows to tell them to bid up on the next one. agents knows appraiser will correct that frenzy. agent personally told me this. of course, it is insane out there. someday it will all come down to more reasonable prices. seen that happened several times over my old age. but if you do a bad appraisal accidentally, that next refi in a crazy market takes your former overpriced appraisal to heaven.

 

[Tim The Enchanter]

but if you do a bad appraisal accidentally, that next refi in a crazy market takes your former overpriced appraisal to heaven.

And if the market goes down first, it goes to the other place.

 

[J Grant]

The problem is, when appraisers rubber stamp a very high price with no credible market support than that a desperate ( or stupid acting) buyer paid it, it becomes a closed sale possible comp, such as we see here. How the heck did it get appraised at that price ? Unless it was a cash sale or buyer put down more cash, a number hitter appraiser fudged results to get that high price- which creates problems for markets and other appraisers.

 

[Deleted member 134708]

Use it and adjust for it. Your email or note is in the workfile and explained in report.

or

Don't use. In report say "Unused Sales: 123 A St. due to xxxxxxxx" Have note/email in workfile.

Both ways the question is pre-answered. Any question tell them to revert back to the appraisal.

 

[Ariba]

It is very simple for an investor or agent to manipulate the market. Investor buys several properties at market value then buys three properties with cash above market. Now appraiser will use these as comparables in their report. Wait a month or two and sell all your properties at a hefty profit. Nothing new about this. I had a cash sale last month, property was bought for cash, I appraised it 2-weeks later for $75,000 less. However, the property is listed in the MLS as even been sold at the higher value. Now appraiser will now use this property as a comp in their reports for that market. Very simple