Closed Sale After My Inspection Date

[J Grant]

https://theappraisercoach.com/can-you-use-a-sale-that-closes-the-day-after-your-inspection-date/

A decent article, except for this: "What is the purpose of an appraisal? Aren’t we here to establish the most probable price the subject would likely sell for in the current market?"

No coach,, establish a current market most probable price subject would likely sell for is not the purpose of an appraisal: Provide a market value opinion is purpose of appraisal. What he describes would be a price opinion, or price prediction/guess what would it sell for in the market? Like the game shows on TV name that price.

The most probable price a property should transact for exists as the TYPE of value described in the market value definition. The most probable price and its terms is linked by " as defined" to our opinion of market value. A most probable price is not a stand alone substitute for a market value opinion.

1) The type of value (most probable price ) described in the MV definition is subject to a set of terms and conditions, and 2) the MV opinion is developed from the appraisal SOW ( applying any of the 3 approaches to value ). The application of 1) and 2) is why an opinion of market value is different than a prediction of an actual sale price. It would be a different process if we were engaged simply to predict a sale price (whether that prediction turns out to be right or wrong).

 

[residentialguy]

"The appraiser’s analysis of a property must take into consideration all factors that have an effect on value. The appraiser must analyze all closed sales, contract sales, and offerings or listings of properties that are the most comparable to the subject property in order to identify any significant differences or elements of comparison that could affect his or her opinion of value for the subject property as of the effective date of the appraisal report."

From the Fannie Mae Selling guide -aka was the sale closed, in contract, listed etc as of the effective date. Answers it far as I am concerned, seems others interpret it differently.

https://www.fanniemae.com/content/guide/selling/b4/1.3/07.html

It closed prior to the conclusion of value so it has all the weight of a closed sale, as the conditions of sale were solidified before you signed the report. You know the price and all the finance. I don't believe your bold above means it had to have closed on or before the effective date. It was a closed sale when you formulated your OMV. You state your date and explain it was pending on the effective date. Now, you may need to add an additional closed sale to fulfill some "3 that closed prior to the effective date" rule of the lender's, but there is nothing saying that you can't list it as a closed sale...since it was when you opined your value.

 

[J Grant]

We interpret the selling guide and what as of effective date means.... I cant' say you are wrong and I am right definitively (unless we submit it as a FAQ to USPAP/fannie, and even they often answer a question in a cryptic manner)

Of course I believe I am right (lol) ...but if your way is accepted and part of peers are doing it I can't argue with that. We need to submit it as a FAQ and see if they provide a clear answer.

 

[J Grant]

"DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby"...

The specified date is the as of effective date, correct? ( the market value opinion linked to the definition is as of effective date, which is the date of inspection ) Per above, the subject is not listed for sale/ available as of effective date A subject consummation of sale occurred as of effective date.

Per the definition, market value opinion is the price the subject should transact for when it consummated with passing of title as of effective date Thus how can it be an open ended price that can keep changing after the effective date up till the report signature date?.

Does a consummated sale price of a property keep changing afterward as various properties sell or change status after the closing date?

 

[TRESinc]

If you closed on your house on June 19 for 200k and on June 21 a house across the street sold for 215k, could you demand buyer return to closing table and pay you more for your house?

what in the world does that have to do with an appraisal which has an effective date and a completed date? may as well say "if my aunt had a package she would be my uncle" or "if eli took his meds everyday more of us would understand what he posts". they both relate to an appraisal as much as your statement.

 

[J Grant]

Tres, It is an example of what would happen in the market place. What happens in the market place applies very much to appraisals.

In the market place, do consummated with passing of title prices change change because another property sold after the closing date occurred? (yes or no).

You just admitted an appraisal has an effective date. What happened as of the effective date? Is it just the date you inspected, or is it also the specified date in the MV definition when the implicit consummation of subject sale occurred?

 

[TRESinc]

It is an example of what would happen in the market place. What happens in the market place applies very much to appraisals.

In the market place, do consummated with passing of title prices change change because another property sold after the closing date occured? (yes or no). You just admitted an appraisal has an effective date. Per the MV definition, implicit is a subject sale consummated as of a specified date ( specified date links back to the MV opinion as of effective date.)

What does the definition of market value say... a consummated sale with passing of title as of a specified date (linked to MV opinion effective date). Or do you think it says something else?

that is not an example, it's something that was conceived in your head, which has absolutely nothing to do with an appraisal. it's already been established that an effective date is not a single moment in time as the inspection can take longer than one day. a report is not completed until the date it is signed.

 

[J Grant]

that is not an example, it's something that was conceived in your head, which has absolutely nothing to do with an appraisal. it's already been established that an effective date is not a single moment in time as the inspection can take longer than one day. a report is not completed until the date it is signed.

A closed sale price keeps changing after the closing just because other properties sell is something I conceived in my head? That might be news to every homeowner in the nation..

That is BS about inspections taking longer than one day, MOST inspections esp for residential properties take place in one day. If there is a reason for second trip such as weather/measuring or need another photo, it is a continuation of first inspection, the return is just to complete a task. If an appraiser returns for a second later inspection for sole purpose of establishing a new later effective date, they are dong so because they want a different value outcome. Usually in appraising a new effective date means a new assignment. Not here, apparently.

Let me ask you a question, if a property very similar to subject that was pending closed for a lower price after effective date and , using it as closed comp now means your value would come in below the SC price, are you still going to make that effort to use it as a closed sale comp? Or would you leave it as a pending?

Even if an inspection takes several days, one of those dates depending on how appraiser views it is the as of effective date. While a report is not complete until the date it is signed, the period between the effective date and report signing date is to analyze and write report, not to keep changing the status of data as it was as of the effective date , or making new additional second inspection dates that impact value (imo).

 

[TRESinc]

?? Sale prices changing after the closing just because other properties sell is something I conceived in my head? That might be news to every homeowner in the nation!

please give some examples of sales that have closed where the buyer came back after closing and paid the seller more. i have a lot of properties to sell and i want those buyers to buy them all.

Let me ask you a question, if a property very similar to subject that was pending closed for a lower price after effective date and , using it as closed comp now means your value would come in below the SC price, are you still going to make that effort to use it as a closed sale comp? Or would you leave it as a pending?

if the data was relevant and it was a better comparable than another i had used in my report it would be no question. i am an independent appraiser. my opinion is my opinion and i don't care if it comes in above, at or below a contract price. i am not paid to meet a contract price. i am paid to give my professional opinion.

 

[J Grant]

TRESinc, post: 2778702, member: 136854"]please give some examples of sales that have closed where the buyer came back after closing and paid the seller more. i have a lot of properties to sell and i want those buyers to buy them all

You misunderstood my example, my example was to show this DOES NOT happen in real life ( price of a closed sale DOES NOT after a closing just because other properties sell after that date.

Thus, why should appraiser make it happen in an appraisal? If the definition of market value references subject sale consummated as of X effective date, why would the appraiser change the most probable price as of the effective date ( when subject sale was consummated), just because other properties sell after that date?