The appraiser does not define the market, the market defines the appraisal. The contract price of a home IS market data.
The above is fine.
It reflects the definition of value sought in the report. As long as it is arms-length etc, the contract price answers the very question being posed of the appraiser in the URAR. As such, the contract price is a strong indicator of market value.
The above is so problematic I don't even know where to start. Lenders may as well have realtors do the appraisal if this is true.
If someone is paying more for a home than the last few sales, that could mean the market is going up.
Maybe, maybe not. If the market is going up, then you should be able to bracket the price with a similar comp and bracket it easily, since when a market goes up, a number of people are willing to pay more than the last few sales, not just one person (such as your buyer). When a market goes up, then days on market should be shorter, fewer REO's present, pending contracts on higher price properties listed, multiple offers on homes, etc. Are these factors present that indicate a rising market, or only this one buyer is paying more than previous sales?
Are you telling me that the market is not allowed to go up or down, because people should only be allowed to buy homes at the same price as the recent historical sales?
Nobody is saying the market is not "allowed" to go up or down. But when markets start rising, there is are driving forces behind it, such as the economy is improving, an influx of buyers enter an area, credit is avail from lenders, employment is up, etc. These are the factors that drive a market up, and if they are not present, why is the market rising ?
Or that the market should only go up and down based on cash sales, but if you want financing with an appraisal, you had better buy your home at the same price as the recent comps?
Of course a buyer can finance a home, and pay more. But, if the last sales are lower, and the contract price is not supported and there is a $5,000 shortfall, a QUALIFIED buyer should have $5000 more cash avail to put down to make up the difference of the higher price, if the appraised value is lower. This is what defines rising markets.
In a rising market, based on a stronger economy , rising employment, and other positive factors, these positive economic trends means there are more qualified buyers who fianance, but are capable of putting a little more cash down.
THIS is what makes market rise, more qualified buyers available . (The last market rise was artificial, as it was comprised mainly of unqualified buyers who had no or little cash and were buying often with 100% financing , thus they could not hold the properties when times got bad , thus the collapse)
Yes there are times when the price is way off, that is when you have unknowledgeable participants. But, if the price can be reasonably bracketed by comparable sales, that should typically be the value by its very definition. That's because the appraisal process is not perfect sorry, you did not see the interior of the comps, and you were not privy to the negotiations. Like someone else said, you had better have some super convincing tightly reconciled sales data if you are going to claim otherwise. Some appraisers need to get off their high horses.
