Being Told The Contract Price Of A Subject

[George Hatch]

A large question that will not always result in the same answer from different appraisers...as strange as that may seem.

USPAP is in fact the culprit in this matter, which requires an appraiser to "analyze" all current agreements of sale, for reasons not entirely explained within the USPAP document (or at least explained in a manner that actually makes a lick of sense). So if you don't like the fact USPAP is requiring lenders to send you purchase contracts you are not alone and, you would need to take that up with the Appraisal Foundation, the entity that writes USPAP. Good luck with that.

I personally think the requirement is beyond ridiculous, and is the single most damaging requirement to both the profession and the interest of the public. One of the many obstacles to change is the fact that so many appraisers have been working this way for so long, that it would require appraisers to stand up and admit their little world is not as perfect as it could/should be, and pride is so much more powerful than people give it credit for.

This post is what I love about people who are new to something...a fresh perspective...an ability to observe the obvious that old curmudgeons have forgone.

You're zooming yourself if you think that the kids are asking a new question that nobody ever considered before. This requirement is in place *despite* the known pitfalls and because the positives are perceived to outweigh the negatives. It was an informed decision, not an arbitrary one.

Have you ever seen what (often) happens when an appraiser doesn't disclose and analyze the recent sales and listing history? Nothing good.

 

[Deleted member 130081]

You're zooming yourself if you think that the kids are asking a new question that nobody ever considered before. This requirement is in place *despite* the known pitfalls and because the positives are perceived to outweigh the negatives. It was an informed decision, not an arbitrary one.

Have you ever seen what (often) happens when an appraiser doesn't disclose and analyze the recent sales and listing history? Nothing good.

Whatever you say George.

 

[George Hatch]

Whatever you say George.

Have you ever reviewed an appraisal that omitted the listing history and concluded to a value that the market had already rejected? I've seen 3 or 4 of those just this year.

 

[George Hatch]

Whatever you say George.

I still want to know what you think is going to happen if the sales contract disclosure and review requirement is retired from USPAP. Do you think your clients are just going to let it go when you bring a value conclusion above or below the contract price - even if only by an insignificant amount?

Value conclusion was $200k, contract price was $200,500. Do you honestly think the average clerk at the lender will let that go without further inquiry? Or is it more likely that "contract review" will simply become another user-defined assignment condition?

What do you think?

 

[Deleted member 130081]

I still want to know what you think is going to happen if the sales contract disclosure and review requirement is retired from USPAP. Do you think your clients are just going to let it go when you bring a value conclusion above or below the contract price - even if only by an insignificant amount?

Value conclusion was $200k, contract price was $200,500. Do you honestly think the average clerk at the lender will let that go without further inquiry? Or is it more likely that "contract review" will simply become another user-defined assignment condition?

What do you think?

I think an appropriate perspective can work wonders.

 

[Terrel L. Shields]

So if you don't like the fact USPAP is requiring lenders to send you purchase contracts you are not alone

I still want to know what you think is going to happen if the sales contract disclosure and review requirement is retired from USPAP.

Once again...a nothing burger. Without the contract you still can "anchor" (bias) upon the assessment value, the Zillow estimate, the listing price, the past sales history. Will you ignore those too? And if you do and you overshoot or undershoot the existing market, what do you plead? Ignorance? Apparently. Because it won't be long before you opine a value well above the contract price which has already been tested by the listings and rejected....and therein, the public trust just went south. George is exactly right. If you allow the contract to color your judgment so badly as to not arrive at a reasonable and well supported value then you ain't much of an appraiser.

 

[Deleted member 130081]

Once again...a nothing burger. Without the contract you still can "anchor" (bias) upon the assessment value, the Zillow estimate, the listing price, the past sales history. Will you ignore those too? And if you do and you overshoot or undershoot the existing market, what do you plead? Ignorance? Apparently. Because it won't be long before you opine a value well above the contract price which has already been tested by the listings and rejected....and therein, the public trust just went south. George is exactly right. If you allow the contract to color your judgment so badly as to not arrive at a reasonable and well supported value then you ain't much of an appraiser.

...a nothing burger...

I wonder if this is what the public will think of appraisers eventually. Do you suppose it will be easier to defend the practice of being privy to the negotiated contract price or easier to attack the practice? Which side do you think wins the battle/spin of public perception/opinion? Have you ever heard of the word Zeitgeist? Chew on that nothing burger for a second.

I would rather side with caution than ever have my integrity questioned, rightly or wrongly. Sort of like how if I didn't want people to think I was a thief, I wouldn't hang out with known thieves. The benefits of being privy just aren't worth it - no bang for the buck there, no real benefit to the appraiser or public. And, for the record, I can develop and report a reasonable and well supported OPINION of value just fine without being privy to the contract, thank you very much. My question is, what's wrong with the rest of you?

 

[ucbruin]

Considering that just a few years ago there were several discussions regarding agents and/or loan originators complaining about appraisers killing deals (don't say it JG )....

It would seem knowing contract price may not be a major issue at this time....

 

[Mike Kennedy]

A large question that will not always result in the same answer from different appraisers...as strange as that may seem.

USPAP is in fact the culprit in this matter, which requires an appraiser to "analyze" all current agreements of sale, for reasons not entirely explained within the USPAP document (or at least explained in a manner that actually makes a lick of sense). So if you don't like the fact USPAP is requiring lenders to send you purchase contracts you are not alone and, you would need to take that up with the Appraisal Foundation, the entity that writes USPAP. Good luck with that.

I personally think the requirement is beyond ridiculous, and is the single most damaging requirement to both the profession and the interest of the public. One of the many obstacles to change is the fact that so many appraisers have been working this way for so long, that it would require appraisers to stand up and admit their little world is not as perfect as it could/should be, and pride is so much more powerful than people give it credit for.

This post is what I love about people who are new to something...a fresh perspective...an ability to observe the obvious that old curmudgeons have forgone.

 

[George Hatch]

Mike, I know this issue has been near and dear to your heart for many years so I'll ask you the same question. What do you think happens if this requirement is retired from USPAP? Will the lenders just let it go when an appraiser comes in with a different value conclusion? High or low.

The reason I ask is because I can't imagine leaving that unresolved question to just hang out there. It seems to me that if I did fail to anticipate the obvious question it would be like sending out an engraved invitation for the ROV.

If I know I'm going to come in lower than a contract price my primary interest will be in slamming the door so hard on their hopes and dreams that it cuts their toes off. I don't want to give them the opportunity to even ask the question before doing my level best to burn that unreasonable contract price alive at the stake.

There's nothing pro-borrower about me wanting to be aware of what the contract price is during an assignment.