As Of Effective Date: Meaning

[residentialguy]

Until they do, anyhow.

but it is a gradual change, not something you'd detect in a couple months unless you have external changes like an earthquake (of course then you have the external changes warning you). But if there are no external influences going on, you can safely assume that the trend from one month ago will be inline with the preceding months. Take the last bubble...didn't change overnight...it curved over 12 months.

 

[Ken B]

August 2005, somewhere in a DC suburb - I received my first relocation appraisal assignment in years.

September 2005 - I received two relocation appraisal assignments. I thought to myself "The party's over."

November 2005 - One could look back at the data and see that it was like a light switch had been turned off in August/September 2005, the market change was so sudden and drastic.

The rest, as they say, is history.

 

[J Grant]

It is harder to develop MV opinions in changing markets. The thread hopes to address when appraisers conceptually shorthand the OMV as below:
"My opinion of market value as of the effective date is the most probable price the property should bring (till end of definition)"
This moves the definition of MV out of its subordinate role as a qualifier and elevates it into a "starring role". Aka, the MV definition is one and the same as the opinion in the above.

However, the appraisal market value opinion is this; "My opinion of market value (developed per the SOW) As Defined for the subject property is X$ as of the eff date." The phrase "as defined" links MV definition to the opinion as a qualifier. The MV definition acts as qualifier role for the opinion, the MV definition is not a stand alone opinion of MV for appraisers.

The MV definition exists to lays out the terms and conditions to vet prices/sales with, including our hypothetical sale of the subject. It's use as a qualifier is "the price a property should bring" IF the conditions and terms within the MV definition are fulfilled.

 

[residentialguy]

It is harder to develop MV opinions in changing markets. The thread hopes to address when appraisers conceptually shorthand the OMV as below:
"My opinion of market value as of the effective date is the most probable price the property should bring (till end of definition)"
This moves the definition of MV out of its subordinate role as a qualifier and elevates it into a "starring role". Aka, the MV definition is one and the same as the opinion in the above.

However, the appraisal market value opinion is this; "My opinion of market value (developed per the SOW) As Defined for the subject property is X$ as of the eff date." The phrase "as defined" links MV definition to the opinion as a qualifier. The MV definition acts as qualifier role for the opinion, the MV definition is not a stand alone opinion of MV for appraisers.

The MV definition exists to lays out the terms and conditions to vet prices/sales with, including our hypothetical sale of the subject. It's use as a qualifier is "the price a property should bring" IF the conditions and terms within the MV definition are fulfilled.

Give an example of how they would led to 2 different value opinions

 

[Eli]

Terell I tend to appraise along the same lines. I can apply monthly adjustments to a recent sale that closed 3 weeks ago, but may not do so, if the sales that closed in the last 90 days have absorbed the latest round of price increases. In a rapidly increasing market, may makes sense. A case can be made for either.

I was trying to figure out how Res Guy and Mr Rex accomplish what they say they do, give strong weight to the pending and listings over the closed sales. Even if I apply a time adjustment right up to the last sale I can not see how a jump in price is made to a higher price listing assuming equivalent quality properties.

What I find as well, at least in my area, is prices increased first two quarters, relatively stable after that, now a sudden jump in list prices. So a time adjustment up to the last sale in a market that has been stable in price for last 4-6 months is being generous.

Keep in mind that current comparable listings (in conglomerate) will tell you (or indicate)what a property IS NOT worth but not a real real good indicator of what it is worth. They have not sold but they are very valuable.

 

[J Grant]

Res Guy, I can't give an example of that because that is not what happens. What happens is conceptually appraiser uses the definition of MV as a proxy/substitute for the opinion of MV, instead of using it as a qualifier to vet the price/sale terms of their opinion of market value.

Imo using the MV definition as a substitute instead of as a qualifier has the effect of making the OMV act more like the way a RE agent prices property, focusing on the latest trend price of listings be they up or down. (I posted a new thread on the topic)