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Amount and Value

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Frank Lostracco

Junior Member
Joined
Mar 13, 2003
Professional Status
Certified Residential Appraiser
State
New Jersey
I have been in this field a short time ( 2 Yrs) and I feel that I am finally getting the hang of it. My question is that if banks truly want an honest :wink: opinion of value, why do they tell you how much is being borrowed and estimated value of property. I can't count how many times that the loan is 80% or 95% to the penny on the amount of estimated value. I feel that I do not need to know this info, I must admit when I come up short it by a small amount it starts to play on my mind.
Thanks,
Frank
 

larryhaskell

Senior Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Nevada
Frank:

Believing that a bank or mortgage company actually wants an honest opinion of value may not be a good asumption on your part. If indeed they do want an honest opinion, they give you that info in case your honest opinion is real close to what they need & you just might be willing to fudge a value a tiny bit knowing that you won't lie about a dishonest one. Happens to all of us on a regular basis.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Frank:

That is precisely why they give those amounts to you... They really don't care about YOUR problem: the goals is to find a solution to THEIRS.

But it is a steep and slippery slope between having it "prey on your mind" if you miss their NEEDED value by say $50... or $150... or $1,500... and beign coerced or 'finding a value that favors the position of the client...

Now while I am not going to claim to have a system or a knowlege of the market that always results in my "knowing" the market value of a home to +/- 2%... I am willing to bet that I can hit it within +/-10% 95% of the time... and +/- 5% 90% and from there I admit the odball properties take it downhill 8O My recent REO stats are at 96% of opinion to actual sale price~~ 8) ... and I feel GOOD about it.

When someone pays for my opinion of value, and I mess up their 'deal' for the sake of $500 dollars where the $500 is less than .5% (thass 1/2 a percent BTW) I am going to 1. feel pretty bad, and 2. undoubtedly take a dozen calls if I foolishly stick to my value.

SO I am willing to reconsider my position... and so should we all...

~~~~~~
Here's my personal solution:
I tend to take new orders and log them in, then fold that EV section in HALF so I can't see it... finish my report and then right before I send it off take a peek... So my opinion of value was theoretically not influenced by the "estimated" or "need" value :evil: but if I am within a percentage point or two I also have the opportunity to take a second look BEFORE I get the angry phone calls.... :wink:

Am I doing wrong? I think not.

But if I miss it by a mile I don't budge an inch :twisted:

I understand I am far from the only one who does this in those areas where we have been unable to convince the client that we are right and THEY are wrong to send over ANY indication of value :roll: :wink:
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
I agree....If i am within 5% I feel comfortable with my value conclusion even though I sometimes do alot better. Am struggling with one now where the contract was $200,000 and I came in at $195,000.
I used three comps within a 1/4 mile of the subject, the agent pulled comps in a different subdivision more than 1 mile distant. I win!

Remember it is a requirement of USPAP that the appraiser review the listing and the contract if it is a sale. I would feel pretty bad if I came in say $1000 below a $200,000 contract...after all, what is the best indicator of value? What a ready, willing, knowledgeable buyer will pay when not acting under duress (my words).

Unfortunately I know some appraisers who hold themselves in such high esteem that they can appraise to the exact dollar amount, ie. $198,338. Guess thats what drives this business...opinion.
 

Frank Bertrand

Junior Member
Joined
Aug 21, 2002
Professional Status
Certified General Appraiser
State
Pennsylvania
well,instead of point estimates of value, one can always go with a range of value, which is permitted.

Me, I'm feeling good at 5%

Recent case: one appraiser comes in at 275K. I come in at 175K. The couple being relocated went bananas. REO ordered another appraisal, which came in within 3% of my value. People accepted 177K from the REO.

BTW, the first appraiser did the appraisal for the couple's 225K mortgage. They lost a bundle on the deal, for sure.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
:lol: Waaal Frank:

IF they had an 80% LTV they didn't lose any... but whadda ya wanna bet they had a 90%... they ate 25K +/- before nay closing costs :roll:

And people think we don't need REAL appraisers with REAL ethics :evil:
 
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