ASB Votes for Three Years Sales History

[Randy Beigh]

Larry

Your scenario tells me at least 2 things. 1. Values are going up. 2. Something is possibly wrong with the house or the neighborhood. Both are value or marketability issues that an appraiser should be concerned with. Neither, are likely to be a fraud issue.

This is not what I was addressing, though. What if those sales prices were mixed up and with buyers or sellers that may have conflicts of interest? What if the buyer of the first transaction showed up in the last transaction? Don't you think you ought to know what is going on?

If appraisers were taught to look for fraud transactions, this ruling might not have come up, but many of us(it's showing up in this thread) simply don't know what to look for and wouldn't know fraud if it bit us. But, we should.

 

[Larry Lyke]

Randy –

I don't want to appear too defensive:

My example was not an untypical scenario in my market area. If handled by an underwriter familiar with the area, there are no red flags to be seen. It’s a typical middle-move-up neighborhood.

Dealing with convoluted what-if self-dealing buyers and sellers is only apparent to the appraiser when it’s apparent! Skepticism is the name of the game. Ever vigilant!

When I compare databases and they agree, and I agree, I don’t have too many more options, unless I take to the street and start knocking on doors. I’ve done that maybe 3 times in 10 years.

 

[jtrotta]

Randy;

just a nickels worth - you said Larry's scenerio tells you (2) things- 1.Values are going up (true) 2.Sometyhing is possibly wrong with the house or the neighborhood. Both are value or marketability issues*

Doing the proper research will tell you what has caused the increase in value and in particular that property. To me, I do not see a marketability issue, as the property is very marketable; maybe the neighborhood provides the marketability factor - it's possible. The question is what has happened during those years; interest rates :?: are out of town Buyers involved :?: what improvements were made :?: whats the local MLS or State data on housing in that area (all states should have that data for you via the Real Estate Commission); Etc.

What all this data has to do with the property that has just recently Sold - I'll never know, it has NO bearing and does not tell you anything they (UW & Principles) don't already know. When the "Title Search" is done, the information is there, so they already know; if we're doing the same job as a "Title Searcher" then we should be compensated.

Now a strength question; I have a few friends that have been well vested and are worth Millions; when they buy property, you cannot go to the town hall and find out exactly what they paid for their property; 99 times out of 100 the purchase shows - "For a Dollar and other valuable consideration" - there are many ways for a person to hide the actual PRICE - if they want. Now that being said, what good does that information do any UW; Bank officer or anyone else :?:

Commercial Appraisals are different dogs; in most cases you will need a three history, due to limited similar data; commercial property's are purchased for totally different reason's than residential. Commercial property's are bought for a "specific need" and in part as an investment vehicle for the company. None of those needs or requirements equate to why someone will purchase a residential property.
In fact, I'll bet 90% of all residential purchase decisions are made by the Lady of the house, so how does that come even close to why commercial properties are bought.

8)

 

[Jo Ann Meyer Stratton]

What was the sales and listing history for the comparables in comparison of the subject? If they show the same trend, then no big deal. If similar modernzation or market improvement etc affected the comparables, then the subject's sales history (if similar to the comparables) makes sense.

After all, not only the subject's three year history to be reported, so should the three year history of all the comparables be reported also. And comparing the three year history for all properties tells a story also.

The three year sale history is not part of the title report. The title report is reviewing the transfer, ownershiprs, liens, easements, right of ways, etc history of the property--not the sale amounts which could or could not have a bearing on development of an opinion of value as part of the background information.

 

[jtrotta]

JAM Stratton;

thanks for your support, you said; "The title report is reviewing the transfer, ownerships, liens, easements. right of ways, etc. history of the property" which is exactly my point as I noted. With the principal aspect being- "transfer & ownership" the dollar value only becomes important if the property sold within the past 6 months or less, this would indicate the "potential" of a "Flip".

If that same property is held for 9 months, you would have to have the approval to do a full scale investigation, to be sure the "Seller" is not geared up as a "Dealer" under IRS code - and you best be sure or you will become the target of a serious law suit.

8)