Analysis Of Prior Sales: A Hidden Retrospective Appraisal?

[Eli]

An appraiser in TN who is a broker can say the "sales PRICE" (current or retro) of that property was above or below market when they are wearing their broker cap is the way I have always heard it. Any broker or unlicensed appraiser can do the same on any property and give their opinion of market or value.

Opinions of PRICE vs VALUE seem crucial to the argument. Price does not always equal Value..

 

[Eli]

Price can be: sales price, listing price, expired price, withdrawn price, etc.etc.

Value is different from price by definition.

From Merriam Webster:

Price:
Simple Definition of price

• : the amount of money that you pay for something or that something costs
  
  
• : the thing that is lost, damaged, or given up in order to get or do something
  
  
• : the amount of money needed to persuade someone to do something

Value:
Simple Definition of value

• : the amount of money that something is worth : the price or cost of something
  
  
• : something that can be bought for a low or fair price
  
  
• : usefulness or importance
  

 

[Eli]

If an appraiser gives a personal opinion that something is equal or higher or lower than "market", they could be referring to "market prices" or "market value". A licensed appraiser in TN who is a broker and wearing their broker hat or a person that is not a licensed appraiser can do either one in TN. At least that is what I have been taught in more than one appraisal class. An appraiser wearing their appraisal hat in TN should stick to the "price" issues to keep from providing an appraisal.

 

[Mark K]

From the reviews I've done it looks like most appraisers simply summarize the details of the sale, they don't analyze.

Saying: "The comp was listed on 1/1/15 for $100,000. It pended 43 days later and closed on 3/1/15 for $99,000" is not an analysis, its a summary. As a reviewer, I'm fine with the summary since, IMO, its mostly a waste of time anyway.

To analyze you have to draw conclusions or interpret the details that you've summarized. That's where it would be easy to cross the line from summarizing to performing an appraisal.

 

[J Grant]

Saying: "The comp was listed on 1/1/15 for $100,000. It pended 43 days later and closed on 3/1/15 for $99,000" is not an analysis, its a summary.

What would an analysis on above consist of to lift it above a summary? Comment that the days on market and terms were typical of the market?

 

[Eli]

Nothing wrong with doing qualitative analysis, like saying per whatever source, it was a burnout and listed or sold in "as is" condition, which was taken into consideration in the overall analysis.

 

[Eli]

This goes back and ties closely to that real old argument of "what is an appraisal?" (but not as old as me) and do you have to be licensed to provide an "appraisal"?

 

[J Grant]

A waste of time imo is analyzing a prior transfer. What earthly purpose does that serve? I can see why a prior sale might be of interest, but a quit claim deed for $10 among owners? An example of minutia in the form that has no relevance to value development or at least none I can think of.

 

[Rich Heyn]

Saying: "The comp was listed on 1/1/15 for $100,000. It pended 43 days later and closed on 3/1/15 for $99,000" is not an analysis, its a summary.

What would an analysis on above consist of to lift it above a summary? Comment that the days on market and terms were typical of the market?

Stating facts may summarize the information analyzed, but it does not summarize the reasoning that supports the analysis, opinions or conclusions. The appraisal report must include sufficient information to indicate tht the appraiser complied with the requirements of STANDARD 1, and Standard Rule 1-5 requires analysis of prior sales.

 

[CANative]

Stating facts may summarize the information analyzed, but it does not summarize the reasoning that supports the analysis, opinions or conclusions. The appraisal report must include sufficient information to indicate tht the appraiser complied with the requirements of STANDARD 1, and Standard Rule 1-5 requires analysis of prior sales.

Don't the UAD drop downs in the adjustment table summarize the analysis? They certainly demonstrate that the requirement of SR 1 and SR 1-5 (sale type, financing concessions, type of loan, sale conditions, sale date, contract date, etc.) were complied with and reported. Does SR 2 require a narrative summation? Would a statement of how the appraiser determined the information presented in those drop downs by interview agents, etc. suffice?