Ao-34 Retro Data

[ZZGAMAZZ]

I'm still hung up with the intent (not just the verbiage) concerning market data "subsequen to the [retrospective] effective date"--but only data that was a "confirmation of trends" established on or before the retro effective date. The premise is tantamount to allowing new evidence in court only if it confirms evidence already introduced--but if so, why bother?

 

[Red Flint]

The idea is that a comparable which was listed then sold relatively soon after the retrospective effective date could be considered as a valid comparison sale. Or, properties that were subject to a pending sales offer which took months to close, and ended up being a comparable with a transfer date several months past that date. Sometimes the uncertainty is due to historical court actions which allowed for sales which closed after the retrospective date.

 

[ZZGAMAZZ]

The idea is that a comparable which was listed then sold relatively soon after the retrospective effective date could be considered as a valid comparison sale. Or, properties that were subject to a pending sales offer which took months to close, and ended up being a comparable with a transfer date several months past that date. Sometimes the uncertainty is due to historical court actions which allowed for sales which closed after the retrospective date.

------
Yea I'm aware of all of that, although it seems that the current version does not address the issue that you describe as well as previous versions. Put into perspective, based upon the analogy that you described (which I agree with 100%), properties pending sale on the retro date that would have been readily available to a researcher on the effective date . . . could be used ONLY if they supported the trends/market analysis/ergo, adjustments, that pertain to closed sales. So why bother?

 

[Terrel L. Shields]

I'm still hung up with the intent (not just the verbiage) concerning market data "subsequen to the [retrospective] effective date"--but only data that was a "confirmation of trends" established on or before the retro effective date. The premise is tantamount to allowing new evidence in court only if it confirms evidence already introduced--but if so, why bother?

USPAP screws the pooch on this one. The IRS clearly states that the data should be as close as possible to the date of value...it does not specify that it should ONLY occur before the date of value. The fact is for 99% of assignments, the value within a few months AFTER or a few months BEFORE are not going to be so significantly different as to impact the real value...which is a guess in the first place. Only if some dramatic event occurred just after the date of value would the value change enough to not fall inside the margin of error in our final value. So unless Walmart sold to Amazon tomorrow, Bentonville Arkansas, as busy as it is, isn't going to see some dramatic difference in values even a few months before and after a given date.

 

[ZZGAMAZZ]

USPAP screws the pooch on this one. The IRS clearly states that the data should be as close as possible to the date of value...it does not specify that it should ONLY occur before the date of value. The fact is for 99% of assignments, the value within a few months AFTER or a few months BEFORE are not going to be so significantly different as to impact the real value...which is a guess in the first place. Only if some dramatic event occurred just after the date of value would the value change enough to not fall inside the margin of error in our final value. So unless Walmart sold to Amazon tomorrow, Bentonville Arkansas, as busy as it is, isn't going to see some dramatic difference in values even a few months before and after a given date.

-----

BTW, the military phrase "screw the pooch" was popularized in Tom Wolf's book "The Right Stuff" subsequently made into a movie

 

[ZZGAMAZZ]

USPAP screws the pooch on this one. The IRS clearly states that the data should be as close as possible to the date of value...it does not specify that it should ONLY occur before the date of value. The fact is for 99% of assignments, the value within a few months AFTER or a few months BEFORE are not going to be so significantly different as to impact the real value...which is a guess in the first place. Only if some dramatic event occurred just after the date of value would the value change enough to not fall inside the margin of error in our final value. So unless Walmart sold to Amazon tomorrow, Bentonville Arkansas, as busy as it is, isn't going to see some dramatic difference in values even a few months before and after a given date.

--------

[Regarding contemporaneous or retrospective assignnments) I prefer always to include pending sales (with contract dates more current than the respective contract dates of the closed sales) and to describe them as the best reflection of current market reaction, providing supplemental, albeit "passive," data. Often times the adjusted value of pending sales are "significantly" lower, prompting additional due diligence. Granted, the screw don't turn widderschynnes . . . and the relatively sall sample size of comparables rarely if ever could depict a sudden change in market dynamics.

 

[Terrel L. Shields]

the military phrase "screw the pooch"

Snafu is another such military sourced euphemism for making an error or running into a problem

 

[George Hatch]

Obviously we want all the comps we're using to be within the 30 minutes prior to the effective date, but sometimes that just isn't possible.

Especially when we start getting away from SFRs located in the urban/suburban areas.

 

[gregb]

Montecito mudslide appraisal. Per attorney, in this retrospective appraisal, for insurance purposes, date of value was one day prior to the mudslide that 90% destroyed the improvements. Drastic market changes, with 500 homes destroyed in the area. Using market data after the effective date of the appraisal was considered to be not relevant to value on the effective date of the appraisal.

 

[Terrel L. Shields]

relatively sall sample size of comparables rarely if ever could depict a sudden change in market dynamics.

zackly… the problem with any small data set is random variation exceeding the norm...is a sale or even 2 outside the 1st std. deviation? Can we tell?