Are properties really selling over market value?

[Overimprovement]

OK, we know some appraisers are in the camp of not wanting to be overly quick to fall in line with rising sales prices and report those as actual, current market value.

But lets look ahead--for those in this camp, are you also slow/hesitant, whatever, to not fall in line with falling prices?

I keep reading/hearing that there is undue stimulus, participants not adequately informed, etc. That is all on the buyers' side mostly right? When markets decline, and a seller HAS to sell their home, but no one is offering what this group of appraisers is saying market value is--what then? Are these sellers also irrational and stupid, etc because they somehow cannot get their house to sell at what all these appraisers are saying is clearly market value?

Please think on this a little bit--it truly is nothing more than the other side of the coin.

 

[George Hatch]

The question remains the same:

If I had listed or otherwise adequately exposed this property to this market as it currently exists, at what price do I think it most probably would have sold for today?​

If you want to elaborate on that then go ahead:

If the seller had exposed this property and received 50 offers on it, at what price do I think the property would most probably have sold for today? ​

 

[The Warrior Monk]

record a sale, show proof of title/ownership

Ownership of what. Rights in Real Property maybe?

Now what is the purpose of recording a mortgage?

 

[J Grant]

The question remains the same:

If I had listed or otherwise adequately exposed this property to this market as it currently exists, at what price do I think it most probably would have sold for today?​

If you want to elaborate on that then go ahead:

If the seller had exposed this property and received 50 offers on it, at what price do I think the property would most probably have sold for today? ​

That is not the question being asked in a MV appraisal

 

[DWiley]

Except that the buyers aren't "desperate" - more like calculating (as I was). As far as keeping track of the risks - that's the bank risk department's job. Ours is to give them the market value as of this moment. I have a feeling that some of us who went through 2003-2007 still have PTSD from the experience.

LOL. I think you may be onto something. We have been looking at data and we see that in many cases where appraisers apply market condition adjustments in rising markets it does not matter, because they add positive market adjustments but reduce/omit other adjustments

 

[Mark K]

Except that the buyers aren't "desperate" - ...

Maybe not in your area, once again proving that real estate is local.

 

[DWiley]

That is not the question being asked in a MV appraisal

???? Actually, that is exactly the question.

 

[J Grant]

OK, we know some appraisers are in the camp of not wanting to be overly quick to fall in line with rising sales prices and report those as actual, current market value.

But lets look ahead--for those in this camp, are you also slow/hesitant, whatever, to not fall in line with falling prices?

I keep reading/hearing that there is undue stimulus, participants not adequately informed, etc. That is all on the buyers' side mostly right? When markets decline, and a seller HAS to sell their home, but no one is offering what this group of appraisers is saying market value is--what then? Are these sellers also irrational and stupid, etc because they somehow cannot get their house to sell at what all these appraisers are saying is clearly market value?

Please think on this a little bit--it truly is nothing more than the other side of the coin.

It is indeed the other side of the coin.
Undue stimulus can affect a price in a stable, rising or declining market (just as a concession can ) As you note, the pressure is on buyers in a rising price under supply, pressure is on sellers in a declining market of over supply. MV definition asks teh same question in any market, is this SINGLE price affected by undue stimulus.

Not about us not wanting to ve overly quick to fall in line, it is about applying the appraisal methodology including the MV definition and see what develops. I am happy to have high price as my OMV if my appraisal supports it.

 

[J Grant]

???? Actually, that is exactly the question.

The appraisal asks for a market value opinion, not a sale price opinion.

MV definition lays out the terms of sale (as defined ) for the MV opinion ( the appraisal ) using that definition.

The MV definition , as a definition of the kind of value for a price references the terms of sale at which the most probable price occurs...the most probable price a property should bring (in a transaction occurring at the caveats and terms of the MV definition)

A straight up question what would the property sell for on X date? is a related, but technically a different question...though the numerical $ price answer can be the same for both ! (or different )

 

[Alsie35]

OK, we know some appraisers are in the camp of not wanting to be overly quick to fall in line with rising sales prices and report those as actual, current market value.

But lets look ahead--for those in this camp, are you also slow/hesitant, whatever, to not fall in line with falling prices?

*SNIP*

Now THAT is where you can get in real trouble down the road if there is a crash.