Closed Sale After My Inspection Date

[residentialguy]

IF the as of effective date as the same date of inspection was not intended to be a cut off point for data activity, why is it identified as the MV opinion ( as defined ) date?

The data was already there...it was just confirmed a couple days later.

 

[bnmappraisal]

The data was already there...it was just confirmed a couple days later.

And if everything's disclosed in the report, I don't see why it's misleading

 

[Michigan CG]

And if everything's disclosed in the report, I don't see why it's misleading

Quit making sense.

 

[J Grant]

The data was already there...it was just confirmed a couple days later.

The data was "not already there." The data was a different status then you reported as of the effective date. The status of the comp of the effective date was PENDING. If you were just confirming it a couple of days later, you would be confirming it was penidng as of effective date.

But that is not what you did.. You did not confirm what existed (pending ) as of effective date. You see it closed a couple of days later, so you enter it as closed instead of pending on the grid. . .

Many clients and users do not understand what the effective date and signature date signify. So even if you disclose in comments about the comp closing 2 days later, it's over their heads. Which makes it misleading in my view,..we can't agree on this one.

 

[J Grant]

And if everything's disclosed in the report, I don't see why it's misleading

Because disclosing highly technical distinction between as of effective date and the signature date does not mean the client or user understands the disclosure. It is more likely they don't . At face value they might accept the explanation, for the simple reason they are not trained in appraising and fail to understand what is being conveyed.

They rely on what they see on the grid, they see it entered as a closed sale; even with the disclosure, it can be very likely perceived as closed as of the effective date for the very reason that is the status on the grid (which is what makes it misleading).

If you truly wanted to avoid possibility of being misleading, you would enter as existed as of the effective date on the grid (pending), explain in narrative comments if you want that it closed 2 days later.

 

[Stone]

And if everything's disclosed in the report, I don't see why it's misleading

It isn't and Denis' post on page two basically summed it up. All of my clients would expect me to use it and wouldn't care if I listed it as sold or as a pending sale so long as I gave an accurate date regarding the closing (I'd list it as a sale, but it would be fine as a pending that sold before the report date).

 

[residentialguy]

Exactly, Stone. You say it was pending on the effective date, and you list it on the form that it closed 2 days later prior to completion of the appraisal confirming the conditions that pending sale and nothing is misleading. This whole nonsense that people in the industry wouldn't understand is ludicrous.



jg...not so much

 

[J Grant]

I understand it, I don't accept that it is not misleading. If clients accept it is because they don't know any better. They are being misled because the comp is on the grid as a closed sale, and that is what they rely on. They don't comprehend what the dates indicate because they are not appraisers , they just want to close the loan, thus they "buy" the narrative explanation .

1)The effective date was meant to be a cut off for status of data; ( closed or pending or active). If not, then explain why the as of effective date, inspection date, and the opinion of market value is specified as the same date?

2) Does the definition of market value say the subject consummated sale/passing of title as of the effective date or does it say something else? (yes or no what does it say)

3) Implicit subject consummated sale as of the effective date,thus the comps status freeze in time as of that same date ? (comps were closed, active or pending as of date subject closed) yes or no.

4) Are we able to teleport back through time retroactively to change what happened on a past date? If our opinion market value ( most probable price), is the price the subject consummated (closed) as of a past effective date, how could that price change because of events that occur after the effective date?

The official race was run on July 19, stopwatch showed Anders won beat opponent Dean by a mere 1/10 of a second. Gee it was so close, on a different date, Dean could have won! So let's have a do over race on July 21, this time Dean wins by .02 seconds ! Now we have a different outcome. Of course if we did not want Dean to win, we stick with the results of July 19. If our agenda is better suited to Dean winning, July 21 is put as official outcome. And it's okay in our rationale because we disclosed it....in a disclosure the client/users are not trained to understand but since they trust you they buy it. In this alternate time travel explanation, results that occurred on July 21 impact retroactively what happened July 19 , But it's okay because it is common sense and either man could have won and its the most recent information .

 

[Stone]

If you "don't accept that it is not misleading" that is fine for you. Thankfully, it doesn't mean anything beyond what you do with your reports.

Throwing around words like misleading (or fraud or ???) because you don't think something is being done properly when a lot of the appraisal world, outside of your personal experience, does it that way is ridiculous. Clients accept it because they can read and aren't being misled in any rational manner (they are even capable of understanding that whether it is included as pending or sold it was certainly contemporaneous). If done on a grid, the actual closing date is there - heck of a way to mislead someone.

That you don't like it, or wouldn't do it that way, doesn't make it misleading.

 

[Tom4value]

As an appraiser, I am supposed go consider all data that will lead to credible results. If I didn't use it as at least a 4th comp and my appraisal is reviewed, I would have to make the weak argument that I didn't consider the sale because it closed 2 days after the effective date. Not a hill I would die on.