• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Appraisals In The Current Market - This Is Nuts

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
What is the most probable price that house will sell for today? There's your market value. Appraisers are not there to police the market... they just report it.
 

NC Appraising

Senior Member
Joined
Apr 28, 2006
Professional Status
Certified Residential Appraiser
State
North Carolina
1. If the contract does not have a appraisal addendum I decline it. Stupid agents wasting everyone's time and money...$30k over the last sale. 80% of the contracts in my area has a addendum saying the buyer will pay the difference. I heavily considered leaving the profession.....to much stress. My stress level is greatly reduced with appraisal addendums.

2. I use a mix of newer and older sales from within the subjects subdivision, when available.

3. It is called the "sales comparison approach".......not the location or the "one mile radius approach to value" or the 90 day approach to value approach". More brain washing and dictatorship from the lenders and AMCs.

4. Yes.....go outside of the PUD or subdivision for closed sales within the past 30 day's.

5. Include pending listing and TRY to get the contract price or at least from the agent if it closed much above list price. Pendings in my area are selling much above the list price, so the old saying that pendings represents the upper limits of value no longer is correct. It is actually mis-leading.

6. The big issue is these corporate cash investors. Most are paying whatever for the property and they are becoming comps. The other issue in my area are owner occupant's that are paying cash or have 50% LTV. They are paying $30k of list price just to get the house.

When one person pays $30k just to get the house and then it becomes a comp....How many other people were willing to pay that amount over list price. Talk to the agents and see. Was there a huge spread or 10 offers $10k over list and just one $30k over list? But then again, it is a closed comp to use....inflated or not, it is a comp.

Finally, use older sales from within the subjects subdivision and also go outside of the subdivision for more recently closed sales. This way, you cannot be accused of going outside of the PUD just to hit the value and ignoring the older closed sales from within the subjects subdivision, and by using older and more recently closed sales it helps to support the increasing market trends.

What is funny is these skippy appraisers using all 0-90 closed sales and marking stable. Some lender, AMC or UW gave them Kool-Aid....if you use recently closed sales, that means the market is stable. LOL.


Supply and demand, see attachment below, may have to click to expand. NO INVENTORY!!!

1623072756571.png
 
Last edited:

sputnam

Senior Member
Joined
Apr 24, 2012
Professional Status
Certified General Appraiser
State
North Carolina
I don't know why this kind of question keeps coming up. The answer is always the same. The appraiser researches the market, finds the most relevant data available, does analyses to determine adjustments, arrives at an opinion of value, and writes the report. Yes, when the market is changing rapidly, it's not as easy... but, the process is the same every time.
 

Fernando

Senior Member
Joined
Nov 7, 2016
Professional Status
Certified Residential Appraiser
State
California
I don't know why this kind of question keeps coming up. The answer is always the same. The appraiser researches the market, finds the most relevant data available, does analyses to determine adjustments, arrives at an opinion of value, and writes the report. Yes, when the market is changing rapidly, it's not as easy... but, the process is the same every time.
I find each appraisal is unique. One appraisal I may put more weight on listings because they're the best indicator of current value.
Another I may put more weight on a comp across street even though it may be 7 months old.
Sometimes, I get creative in finding a way to determine value when there's limited comps.
May be it's from experience but I find a way to appraise that darn property.
 

Evincere

Elite Member
Joined
Dec 30, 2002
Professional Status
Certified Residential Appraiser
State
Florida
You might be right. Sooner or later the market will turn - the only question is when.

The cliche endures for a reason: "Bad deals are made during good times".
And when money ceases to be so cheap there will be blood in the streets
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
I find a way to appraise that darn property.
That's kind of like Shakespeare's MacBeth where one guard said he could call up the sprits from the vasty deep and the other replied "But will they answer?"

I choose the most proximate, recent and similar sales for comparison.
9 of 10 times, I will be more concerned about the similarity than either closest or most recent sale. Therefore, the most similar property in age, condition, and size is generally going to be my pick. If 2 or more are equally similar (or often with that choice you have a unique property therefore, you are choosing the least dissimilar properties) then I tend to give them equal weight rather than use the dart method.
 

James Sturm

Member
Joined
Jan 4, 2005
Professional Status
Certified Residential Appraiser
State
Arizona
Considering how values have skyrocketed in the last 12 months, and even moreso in the last 3-6 months. SoI would like to know what appraisers are doing when there are not current comps within a mile of the subject property. Are you using old comps that don't reflect the current market, or do you use comps outside of 1 mile but as close as possible, like up to 3 miles away.

This is issue has been a nightmare for me, because no houses like mine are selling under 450k for 4000 sq ft, outside of my subdivision, but people in the subdivision are NOT selling because they can't afford a comparable house outside the subdivision. No one on a finished basement has sold since December of last year.

It was just appraised and the appraiser only used comps in the subdivision and 4 out of 5 are from more than 6 months ago, and killing my value and our sale and its so unfair cuz people are getting 400k for only 3000 sq ft, and its like I'm not getting value for an extra 1800 sq ft. HELP!!! We are appealing but don't think this guy will budge
Motivations of buyers in today's market are almost impossible to support. I am located in Arizona. We have many, many buyers coming from other states having much higher overall property values. Home prices are increasing due to uninformed buyers from out of state having train cars full of money not caring how much they purchase a house for as long as they get the house (bidding wars). Sometimes, offers exceed $50,000 above asking price, which of course cannot be supported within the subject's market area. In cases like these, buyer's have to come up with additional funds to make up the difference between contact price and market value with the buyer's setting "Precedence" and not the appraiser.

It must be noted that value of a property "must be" supported within the defined market area (subdivision) prior to leaving the area for comparison. By just leaving the area to obtain a value with no support for value within the identified market area, is misleading or a USPAP violation.

REMEMBER: It is what it is. If the contract price cannot be supported within an identified market area due to competing sales or competing listings being lower than the subject's contract price, then it is up to the buyer to come up with the difference or withdraw from the contract. It is not the appraiser's job to hit the contract price, however, it is the appraiser's job to provide a creditable appraisal report supporting market value.
 

bnmappraisal

Elite Member
Gold Supporting Member
Joined
Nov 9, 2011
Professional Status
Certified Residential Appraiser
State
Florida
Considering how values have skyrocketed in the last 12 months, and even moreso in the last 3-6 months. SoI would like to know what appraisers are doing when there are not current comps within a mile of the subject property. Are you using old comps that don't reflect the current market, or do you use comps outside of 1 mile but as close as possible, like up to 3 miles away.

This is issue has been a nightmare for me, because no houses like mine are selling under 450k for 4000 sq ft, outside of my subdivision, but people in the subdivision are NOT selling because they can't afford a comparable house outside the subdivision. No one on a finished basement has sold since December of last year.

It was just appraised and the appraiser only used comps in the subdivision and 4 out of 5 are from more than 6 months ago, and killing my value and our sale and its so unfair cuz people are getting 400k for only 3000 sq ft, and its like I'm not getting value for an extra 1800 sq ft. HELP!!! We are appealing but don't think this guy will budge
First of all, I wish you the best of luck with the sale of your house. I'm sure it will sell one way or the other

Second, there has been a lot of good posts by very experienced appraisers, so I won't add much to that except to say ... appraisers get a flat fee and are unbiased, objective and independent of your whole selling process. To be frank, we do not care if your house is worth $350k, $450k or $950k. We get the same $$$ no matter the value we place on the report
We only care as to what the market says the value of your home is worth as of a certain date. Period. That is our job.
Obviously that opinion has to be based on facts, sales, etc but I think many homeowners think we are like agents and have skin in the game (agents get paid commission % of the price - we do not).

Again, good luck
 

Salty

Member
Joined
Mar 12, 2010
Professional Status
Certified Residential Appraiser
State
Pennsylvania
If you can credibly defend the value in court then its all good. Remember the appraisal report can be the easy target when the angry bank has to deal with a default when the borrower who got caught up in a bidding frenzy looses his/her job after the firm downsizes or outsources mid-level analyst positions. Reviewer sees a value with no closed sales at or above the value opinion. Man, I don't want to deal with explaining that I went higher than closed sales because some agent told me he had 10 offers above what is reasonable.
 

Fernando

Senior Member
Joined
Nov 7, 2016
Professional Status
Certified Residential Appraiser
State
California
If you can credibly defend the value in court then its all good. Remember the appraisal report can be the easy target when the angry bank has to deal with a default when the borrower who got caught up in a bidding frenzy looses his/her job after the firm downsizes or outsources mid-level analyst positions. Reviewer sees a value with no closed sales at or above the value opinion. Man, I don't want to deal with explaining that I went higher than closed sales because some agent told me he had 10 offers above what is reasonable.
But that's the market now with people offering these higher bidded prices in this limited inventory market.
Compared to 6 months ago, the prices have gone way too high. Hate to appraise these high bidded offers now.
Like you said when things go bad, appraisers will get blame and we have to defend ourselves.
 
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks