Gold Supporting Member
- Jan 15, 2002
- Professional Status
- Certified General Appraiser
If you think that a $1M value conclusion is in any way more meaningful to their decision than concluding that a $1.005M contract price can *also* be considered an expression of MV then you're just not using common sense.I know you love that term, but...
We are not hired to deliver a "reasonable expression of the concept" of market value, we are hired to deliver a POINT VALUE , which is a heck of a lot harder to derive. Some appraisers have trouble with the fact of a point value, since other numbers clustered close around it could also be used. Still, we are tasked with the point value, and the fact that other numbers are close at the finish line or reconciliation. If it a purchase, and the SC price and appraisal OMV value are the same $ numerical amount -$260,000, example - . then the SC at 260k supports the MVO of 260k -(not the other way around )
It is frustrating when our OMV is a smaller amount less than, or more than the MVO. In either case, best practice is to reconcile at what the appraisal supports - but we all know it is not a problem to parties or client when we appraise a small increment abouve the SC price, but it sure is when we appraise that same increment below - bringing enormous pressure to "push" that last bit of value up.
WRT to lender deciding the LTV number for a for a loan within a small % of the appraisal MV - though seems they can, they are reluctant to since then they take the liability for it.
I find it ironic that Fannie/freddie appraisal waivers do the exact thing they prohibit appraisers from doing - they declare the market value to match a lender's desired number in a refinance, or it is the SC price ( as long as both cases it meets some other criteria )
The market is extremely interesting now - for the first time ever I am seeing a sizeable # of contracts with a clause where buyer agrees to pay the CS price regardless of appraisal, or agrees to pay X $ over the appraisal value. Fine by me, I don't have an ego , if they want to pay over my MVO, go for it !
If we had ever meant "precise and not misleading to intended users" we would have said it that way.
Moreover, you don't want to lose sight of the fact that the reason we typically round out our value conclusions is to acknowledge their imprecision.