Appraisal Report Revision

[Restrain]

He missed them by putting in a price range in his search criteria. Condos are a weird thing, often with a wide range of prices. By capping the upper limit of prices, he excluded a segment of the marketin the project.

 

[bnmappraisal]

He missed them by putting in a price range in his search criteria. Condos are a weird thing, often with a wide range of prices. By capping the upper limit of prices, he excluded a segment of the marketin the project.

I often do the opposite (my bold) and cap the lower limit - i.e. list price $250k for 600sf, I'll search the complex for say $100k+ with no upper limit then slowly narrow the search down from there

 

[Webbed Feet]

I suspect - he didn't think they were good comps from the get go but became rife with doubt when the sharks started attacking the cage. Every now and then when doing residential one has to load their spear gun.

Nope... those sales were excluded in the original search parameters by our O.P. only allowing a price of $300K or less in the parameters. Hence, those sales were not originally considered AS THEY SHOULD HAVE BEEN. Yes, I shouted, for the O.P. benefit. Using such limiting search parameters is a very bad idea in general. The first searches, prior to drilling down, should have included all of the sales information in the market area. If so, those agent supplied sales would have been considered.

 

[Evincere]

Nope... those sales were excluded in the original search parameters by our O.P. only allowing a price of $300K or less in the parameters. Hence, those sales were not originally considered AS THEY SHOULD HAVE BEEN. Yes, I shouted, for the O.P. benefit. Using such limiting search parameters is a very bad idea in general. The first searches, prior to drilling down, should have included all of the sales information in the market area. If so, those agent supplied sales would have been considered.

Agreed. Limiting search parameters by price is a bad practice as they could have just as easily been eliminated from consideration by including them.

 

[Peter LeQuire]

While I agree with Mr. Webbed - sales data for all of the market area should be analyzed - IMO limiting by price is legitimate, if not necessary if the object of the search is to analyze "comparable" sales. My exposure to buyers at the beginning of their home buying quest is admittedly limited, but I can't imagine a serious prospective purchaser wandering into the process of buying a home without having analyzed her (1) financial capability and (2) the price level in which she can reasonably find a house that fits that capability. Appraisers ought - it seems to me - reflect the market and to the extent possible the actions of typical participants it.

 

[J Grant]

While I agree with Mr. Webbed - sales data for all of the market area should be analyzed - IMO limiting by price is legitimate, if not necessary if the object of the search is to analyze "comparable" sales. My exposure to buyers at the beginning of their home buying quest is admittedly limited, but I can't imagine a serious prospective purchaser wandering into the process of buying a home without having analyzed her (1) financial capability and (2) the price level in which she can reasonably find a house that fits that capability. Appraisers ought - it seems to me - reflect the market and to the extent possible the actions of typical participants it.

I agree ...because there is a price threshold where a sale is not a "comp" because it is not in the realistic price range of someone buying what the subject or substitutes offer.

However, a search of all sales in a relevant market area of properties of similar physical characteristics to subject with no price filter should be performed at some point.

In that way we can eliminate nonsense sales, but we also might catch a good sale that for unknown reasons a price filter excludes (MLS can be weird that way)

After wider search is performed, appraiser can start concentrating more on filtered searches to find comps most relevant to the subject and typically, these sales and listings start to cluster around a certain price range. And using price as a filter in at least one search also reveals good information.

 

[Ariba]

He missed them by putting in a price range in his search criteria. Condos are a weird thing, often with a wide range of prices. By capping the upper limit of prices, he excluded a segment of the marketin the project.

Not is you know the market!

It is always interesting to me to see the criticism concerning using price as a search criteria. Why stop at price? If a buyer is looking for properties and is qualified for a properties priced in the $250,000 range would you show him properties in the $300,000+ range? I'm sorry but in my market, in this price range and similar condition, properties above $300,000 are not comparables to $250,000 properties, period In addition, if both Listing Agent and Buyer's agent met their fiduciary obligation and did their due diligence representing the seller/buyer and the seller/buyer was well informed, why was the property listed at $250,000 and not $300,000+.

 

[gregb]

Not is you know the market!

It is always interesting to me to see the criticism concerning using price as a search criteria. Why stop at price? If a buyer is looking for properties and is qualified for a properties priced in the $250,000 range would you show him properties in the $300,000+ range? I'm sorry but in my market, in this price range and similar condition, properties above $300,000 are not comparables to $250,000 properties, period In addition, if both Listing Agent and Buyer's agent met their fiduciary obligation and did their due diligence representing the seller/buyer and the seller/buyer was well informed, why was the property listed at $250,000 and not $300,000+.

In some markets a low listing price can result in multiple offers more than 30% above the list price.

http://www.businessinsider.com/sellers-5-musts-for-generating-multiple-offers-2013-12

 

[Ariba]

In some markets a low listing price can result in multiple offers more than 30% above the list price.

Maybe, in some markets. However, not in this market and especially in this price range!

 

[CindyR]

How did you miss 'em in the first place?

he missed them because he used his target sale price in his search criteria