Appraised Value Below Contract Price

[George Ellerman]

When your lender client is asking you why the value is lower than the sale price it is because you have failed to properly analyze the sale agreement!​

Calvin,
I've never heard anything so ridiculous as to your inference that an appraiser should have to justify his/her perceived value to a figure in a sales contract ! You analyze a sales contract to possibly determine any concessions or terms which would negatively or positively affect your adjustments not to justify a sales price. How someone who has had some appraisal experience would come to your interpretation of "analysis" is beyond me. I'm afraid your ship has departed leaving you alone on the dock.

 

[J Grant]

Yes....those buyers and sellers are called the market. That applies to your subject and all your comps, including the cash deals that you use that didn't need an appraisal! Oh my...how the hell could they be right???

Apparently, the buyers and sellers of the other comps are discounted, and that only "one" is right...the buyer and seller of the subject. (proven by the fact that 90-100% of the time, the SC price is the point value (From some appraisers).

How could all the parties who closed / are in pending on the other comps, be less right than the buyer and seller of the subject? Are the subject buyer and seller always smarter and more informed and knowledable the other buyers and sellers in the market area? What a coincidence, the subject buyer and seller are always smarter, more well informed, etc (sarcasm), so go with their price, not that of the strongest market evidence from the other comps!

When appraisers come in 90-100% of the time at SC price, THEY are the ones ignoring the market and actions of other buyers and sellers, since they hyper focus on the results of just one buyer and seller (the subject)

 

[Pittsburgh Pete]

So you would have everyone believe that appraised value hits the contract price so often because why?

I really do want to hear this one.

Because the cluelessness in the residential sector takes many forms. Some are gutless and some are ignorant as evidenced by this thread. Just my take!

 

[residentialguy]

Why is it that you can reconcile MV by not giving weight to comps 4 due to it being a distressed sale and sold below MV but you don't do it for the subject data? Common sense doesn't appear to be too common in this thread.

 

[Calvin the Airedale]

So you would have everyone believe that appraised value hits the contract price so often because why?

I really do want to hear this one.

Most sale agreements are negotiated on terms and conditions which approximate the stipulations contained in the definition of MV. That is why so often the contract price is similar to MV, because it is found to be a "market price".

 

[residentialguy]

Apparently, the buyers and sellers of the other comps are discounted, and that only "one" is right...the buyer and seller of the subject. (proven by the fact that 90-100% of the time, the SC price is the point value (From some appraisers).

How could all the parties who closed / are in pending on the other comps, be less right than the buyer and seller of the subject? Are the subject buyer and seller always smarter and more informed and knowledable the other buyers and sellers in the market area? What a coincidence, the subject buyer and seller are always smarter, more well informed, etc (sarcasm), so go with their price, not that of the strongest market evidence from the other comps!

When appraisers come in 90-100% of the time at SC price, THEY are the ones ignoring the market and actions of other buyers and sellers, since they hyper focus on the results of just one buyer and seller (the subject)

The subject and all of the comps were right. They only difference is that there are many unknowns about all of your comps that is not true of the subject data.

 

[Calvin the Airedale]

Calvin,
I've never heard anything so ridiculous as to your inference that an appraiser should have to justify his/her perceived value to a figure in a sales contract ! You analyze a sales contract to possibly determine any concessions or terms which would negatively or positively affect your adjustments not to justify a sales price. How someone who has had some appraisal experience would come to your interpretation of "analysis" is beyond me. I'm afraid your ship has departed leaving you alone on the dock.

View attachment 22592

Dear George,

Please read my other posts in this thread and get back to me.

 

[mark hurlock]

Because the cluelessness in the residential sector takes many forms. Some are gutless and some are ignorant as evidenced by this thread. Just my take!

Clueless and gutless as in posting with an alias and cherry picking the comments to respond to and others to ignore.

Still waiting for an explanation why FNMA did not mention reconciliation of the contract price in their requirement for appraisers to “analyze” the contract.

 

[J Grant]

Because the cluelessness in the residential sector takes many forms. Some are gutless and some are ignorant as evidenced by this thread. Just my take!

Really, ? Seems major skippiedom is apparent (from some) on the commercial side who do residential work. Taking an arrogant attitude is a poor substitute for good appraisal practice.

FYI, I reviewed a real skippy res report from a cert gen in my area a few years ago. Cherry picked comps and ignored market conditions. I did not agree with his value and derived my own well supported one. I did not report him to the board, left that up to his client , I just turned my review in.

Guess Mr arrogant did not like having his work reviewed by a lowly residential, so he reported my review to the board, as violating USPAP (for no good reason, he just wrote a bunch of gibberish). The investigator found his complaint groundless and dismissed it.

Those arguing so loudly about reconciling to SC prices and how appraisers are not "analyzing " the contract enough, as if that should affect value....as the bard said, thou dost protesth too much."

 

[mark hurlock]

Most sale agreements are negotiated on terms and conditions which approximate the stipulations contained in the definition of MV. That is why so often the contract price is similar to MV, because it is found to be a "market price".

I did not say similar. I said “hits the contract price”

is this a deliberate attempt to deceive others?