All Weight Given To Sale 1...

[KYLECODY]

Doing a field review where the appraiser claims greatest weight but gives all weight to 1 sale.

His 3 adjusted sales prices come in at $445k, 395k and 398k. All are fairly similar with not one being extremely similar as these are rural deals on acreage. Sale 1 at 445k has the least gross adjustments but all are within a fair % range. He states in his summary that greatest weight is given sale 1...his final estimate of value is $445k.....so basicly all weight is given sale 1 and the other 2 are ignored....hmm........ anyone have any good canned comments to the extent that one sale does not make a market..thanks.

 

[CANative]

The appraiser is not necessarily saying that one sale made the market. He might be saying that it is his opinion that out of the 3 crappy comps found in this region of little data, comp 1 was the most similar and gave weight to that comp.

It's your job to provide an opinion of his work, and if the assignment includes your own opinion of value then you must detrermine whether or not it was appropriate to weight that comparable.

Is your main issue with this just the fact that the original report is using the highest adjusted value as opposed to the bracket? Did this comparable adjust to a higher value than all of the actual sales prices? Are there more similar comparables that may indicate that his opinion of value is too high? Does the report contain an explanation of why this sale was weighted?

 

[KYLECODY]

the main problem is he weights the highest sale 100% when the other sales are all very similar. Im all for giving greater weight to better sales but all sales are similar and there is no valid reason to give ALL weight to 1 sale. Thats not greatest , thats all.

Anyways, his sales are irrelevant as he cherry picked from up to 10 miles away and missed 2 similar sales within 2 miles.....anyways weighting just one sale when it happens to NOT be superior to the rest and just happens to be the highest sale annoys me when all other data points to a much lower number...

 

[jonathan asbury]

you said that comparable 1 had the lowest net adjustments, so that makes some sense. but you didn't say if the appraiser explained the reason the heaviest (all) weight was given to comp 1.

ie:
"Because of the numerous similarities with the subject and the very low gross and net adjustments made, I have placed the heaviest empasis on comparable 1. Also this comparable is located on the subject's street and block which is a highly desirable court location."

Jonathan

edit:
lol ok i had not seen your second post yet. 10 miles?? I don't do 10 blocks.
:blink:

ja

 

[Ross (CO)]

I know it is like pulling-teeth to ever have a client for a review share with that reviewing appraiser a logical reason (or more) for the purpose of their requested review. What you state as being annoying about the weighting of that #1 comp is perhaps the VERY reason why this report has come to you for review. Your client probably needs confirmation.........can one sale actually drive the subject value, or is it better to soften that opinion by blending one's reconciliation with that grouping of three sales ?

You have not clarified here, but might #1 be a sale from a few weeks ago and maybe #2 and #3 were from, say Sept. and Oct. ? Is this a new subdivision area where upward-spiral-pricing is successfully being sold from the builder to the first owners ? Are these comps "new" or re-sales ? Your client could be equally interested in knowing what you have discovered from further database scrutiny about the possible cherry-picking of comps and ignoring other sales of similar homes more-proximate to subject location. Quite clearly....10 miles ?....versus 2 miles....always amazes me how a neighborhood definition can be expanded by one person.....yet be easily shrunk down by another.

Acknowledgment of most-recent, most-similar and most-proximate sales is still that best means of delivering a valuation opinion that repels doubt and second-guessing. You are the "peer". How would you have selected comparables were you the author of that first report ? Poor comparable selection is recognized as a fundamental criteria for how and why an appraisal can drift away from the straight-and-narrow. This review is such an opportunity to possibly state that and reconcile a conclusion that just might offer a value opinion conflicting with the other. Heh, so your client has two opinions to mull over. They are big boys and girls, they can handle it.

You have not stated, but HAS your client asked for your value opinion or merely comments about the logic and compliance factors being met in the other report ? There just may be nothing wrong with the other report and that is where you get to introduce....."One sale does not make a market". Your client probably feels that way too. No need to point fingers of blame. Bring out a few other facts, and let your client see things the way they are.

 

[Restrain]

Kyle:

I think you nailed it when you said his sales were irrelivant. That's where you start, not what he did.

Build your case around the sales he SHOULD have used, and explain why they are superior to the sales that he did use. Then you can support that the value is unsupported from the market.

The fact that he hung his hat on one sale is not necessarily wrong. The fact that he ignored more comparable sales that were much closer is wrong.

 

[George Hatch]

I agree with Roger. The real problem was the original choice of comps, now how they were weighted. When he presents these comps as being he most similar he is basically telling a lie, and that lie is the big problem. The weighting of the less-comparable sale as supposedly being the most comparable sale is just another extension of the same lie.

 

[Tim Hicks (Texas)]

I agree with Roger and George. As a review appraiser, it may be your responsibility to present sales that are more relevant and more similar. Basically, stick to the facts. Never make it personal. (EX. There are closer, more similar sales available for comparison that supports a different opinion of value. ) The reviewer must prove that sale #1 is not most similar if they are going to argue that it is not or that other relevant sales do not support placement of their opinion at the top of the range.

 

[jonathan asbury]

Hypothetical question for the long time appraisers and review appraisers:

Subject- 6/3/2 1800 Sq Ft

Availible Comps-
1) 5/2/1 1100 Sq Ft-next door
2) 5/2/1 1200 Sq Ft-one block south
3) 6/3/1 1300 Sq Ft-two blocks north
4) 6/3/1 1250 Sq Ft-two blocks west
5) 6/3/2 1600 Sq Ft-three blocks east
6) 6/3/2 1725 Sq Ft-four blocks north
7) 7/3/2 1850 Sq Ft-four blocks west
8) 7/4/2 2000 Sq Ft-same street two blocks west

which three or more comps would you use, assuming similar curb appeal and aparent condition.

thanks,
Jonathan

 

[Tim Hicks (Texas)]

Tough question, Jonathon. It would appear that 5-8 are the best comps, but without more information, who knows. If I had the house next door that is much smaller, I might use that one too. I might use them all. In a review it is better to have an ironclad case with eight comps than a flimsy one with three.