hastalavista
Elite Member
- Joined
- May 16, 2005
- Professional Status
- Certified General Appraiser
- State
- California
In another folder, a forumite posted a question regarding the opinion of value and the unadjusted and adjusted range of the comparables.
The question asked, was, "Have you ever encountered a situation where your opinion of value for the property was above the comparables used in your appraisal report?"
In the discussion, it was revealed that the appraisal's opinion of value was higher than the adjusted and unadjusted sale price.
My response was, a value above the unadjusted sale price happens. Above the unadjusted sale price, not so much, and that the expectation in residential appraising is that one wouldn't see that.
The appraisal concluded a value above the adjusted and unadjusted sale price. When asked why, the reasons was based on scarcity of inventory, dated sales, historical appreciation, new employer in town, etc.
I then said the following (I'll quote myself and an bolding reviewer in this thread as my topic relates to that condition):
Now, in my review function, I do not provide my own independent opinion of value.
But I am required to conclude if the appraisal, as presented, is credible or not. A non-credible finding means that it isn't credible as-presented; it doesn't mean the value is high, low, or right on.
It seems to me that some have posted recently that a reviewer asking a question about an adjustment constitutes the reviewer providing an opinion of value. I obviously disagree.
Therefore, given the situation above, and assuming I was the reviewer and I called the appraiser and asked,
Did you consider making a market-condition adjustment to the comparables based on your market analysis, thereby bracketing the concluded value, and if not, do you think it would be appropriate?
The question asked, was, "Have you ever encountered a situation where your opinion of value for the property was above the comparables used in your appraisal report?"
In the discussion, it was revealed that the appraisal's opinion of value was higher than the adjusted and unadjusted sale price.
My response was, a value above the unadjusted sale price happens. Above the unadjusted sale price, not so much, and that the expectation in residential appraising is that one wouldn't see that.
The appraisal concluded a value above the adjusted and unadjusted sale price. When asked why, the reasons was based on scarcity of inventory, dated sales, historical appreciation, new employer in town, etc.
I then said the following (I'll quote myself and an bolding reviewer in this thread as my topic relates to that condition):
Those seem like good reasons (to me) why a house would be valued above the prior sales.
As a reviewer, I would ask, if such is the case, why weren't market-condition adjustments applied to the comparables to reflect this dynamic?
Doesn't mean I'd necessarily stop it; but I'd certainly question it.
Now, in my review function, I do not provide my own independent opinion of value.
But I am required to conclude if the appraisal, as presented, is credible or not. A non-credible finding means that it isn't credible as-presented; it doesn't mean the value is high, low, or right on.
It seems to me that some have posted recently that a reviewer asking a question about an adjustment constitutes the reviewer providing an opinion of value. I obviously disagree.
Therefore, given the situation above, and assuming I was the reviewer and I called the appraiser and asked,
Did you consider making a market-condition adjustment to the comparables based on your market analysis, thereby bracketing the concluded value, and if not, do you think it would be appropriate?
- Is that an inappropriate question for a reviewer, who is not concluding their own opinion of value, to ask?
- If the appraiser decides to make an adjustment and, as a consequence, brackets the value, is that directing the appraisal process?
- If the appraiser says, "I hear you, but I'm not sure how to do that..." and then I say, "Well, if it were me, I'd consider X, Y, and Z and do it this way...... but what you do is up to you." does that cross a line?