Arm's Length vs Non-Arm's Length Sales

[Dublin ohio]

Agree, there is a highest bidder, usually, on every property as evidenced by the multiple offers that far exceed the listing price and the prevalent market values. IMO, that 'winning' bidder often exceeds the market value. Again, the concept that just because someone is willing to pay $X for a property automatically means that the property is worth $X would result in a lot more appraisers being out of work.

If one bidder at an auction overbids the local market value, I'm not inclined to accept as fact that its worth it, whether its the subject or a comp.

Would you approach a non auction sales the same way that had 15 competing escalating offers and the highest offer gets accepted

 

[Mark K]

Would you approach a non auction sales the same way that had 15 competing escalating offers and the highest offer gets accepted

Yes.

Nor do I think appraisers should make a market.

Neither do I. We should analyze it and report it, with emphasis on the ANALYZE part.

 

[J Grant]

Appraisers do not "make a market".

We do make an opinion of market value for our subject, however, on the appraisal. That opinion might be the same $ amount as a sale contract price, or higher than it, or lower. That is true whether the subject price was arrived at through multiple offers or not. We analyze the terms of sale to understand the price, and it helps us comment on it if our OMV is hit or lower than the price.

Wrt to choosing coms, some of them have terms of sale that meet the terms in the MV definition better than others.. We adjust the price of a comp if it appears affected by undue stimulus, atypical motivation concessions, or special financing.