Closed Sale After My Inspection Date

[residentialguy]

Again, YOU are the ONLY PERSON that holds the position that your way is the only way that is not misleading.

Stop distorting facts...

I don't accept that it is not misleading

Ok...maybe someone hacked your account and posted that???

 

[Deleted member 134708]

3 model matches closed 2-5 days after effective date but before your signature date/date wrote report.

If engagement letter forced you to use only closed sales before effective date, you would need to decline the assignment as you cannot produce credible results.

If you continue with this assignment and follow this bankers rules, your appraisal would not be credible.

Again, the 1 second in time, where the world stops, is for the subject only and its market conditions. The rest of the world doesn't make this stop. The 1 second time stop is to value the subject with all relevant data before and after this 1 second time stop.

 

[The Warrior Monk]

Pending sale as of effective day of value.

Next discussion....

 

[J Grant]

3 model matches closed 2-5 days after effective date but before your signature date/date wrote report.

If engagement letter forced you to use only closed sales before effective date, you would need to decline the assignment as you cannot produce credible results.

If you continue with this assignment and follow this bankers rules, your appraisal would not be credible.

Again, the 1 second in time, where the world stops, is for the subject only and its market conditions. The 1 second time stop is to value the subject with all relevant data before and after this 1 second time stop.

That almost never happens. Usually, comps are found prior to and up to including as of effective date. The 3 pending could certainly be considered. If using those 3 as closed were so critical to assignment results, appraiser can ask for a new inspection effective date to use them as closed sales.

 

[J Grant]

Yes, I take ownership in that I believe that even with disclosure, it could be misleading. What each one of the other posters in the view of using it as pending feels about that issue is up to them...if they don't find it misleading , that is their view. Many "readers" these days can be a software portal scrub program or computer "review"...a computer registers what it entered on the grid rather than narrative ( UAD has only month/year, not date on grid)

Now, would anyone be brave enough to address this?

The fact is that the valuation of subject is as closed as of effective date...(the MV definition, implicit as consummation of sale/passing of title as of a specified date and specified date links to the MV opinion as of effective date). They treat the subject as if it is available on the effective date and after it, since the price of subject as of the effective date can keep changing, per events that happen after it .
If our appraisal SCA model is the subject closed as of effective date at our most probable price opinion, then how can that price change due to events that happen after the effective date? I am waiting for any of them to address it!

 

[bnmappraisal]

That almost never happens. Usually, comps are found prior to and up to including as of effective date. The 3 pending could certainly be considered. If using those 3 as closed were so critical to assignment results, appraiser can ask for a new inspection effective date to use them as closed sales.

(my bold) Maybe I'm a "one off" appraiser among my peers, but I often don't even search sales until after I inspect a property. Thankfully many of the properties I have had in the last 6-12 months have been within 20 mins or less of my office, so "going back out" for the comp pics is not a major ordeal; often I'll take them after inspecting another property.

Today is a perfect example. I saw a property Mon (7/19) less than 20 mins from me, so eff date is 7/19. I did a search yesterday 7/20 for sales/comps. I generally set my search criteria for ACT/Pending, then for a 6 month period and then for a 12 month period. A huge majority of the time (I'd venture to guess in my own experience it's around 99% of the time) the pendings that have closed since eff date (if any) are either not more reliable than the closed I already had, so this whole thing is moot.

 

[bnmappraisal]

Now, would anyone be brave enough to address this?

I'll take a crack at it. What the hell! It's all hypothetical anyway ...

If our appraisal SCA model is the subject closed as of effective date at our most probable price opinion, then how can that price change due to events that happen after the effective date? I am waiting for any of them to address it!

I used an example several pages back (i forget right now) regarding Garage Baths. I run into these often enough in some neighborhoods I cover. FINDING the comps can often be a challenge as not all agents properly input these into the MLS. So this takes some extra due diligence often times.

That being said, if I had a property with one of these garage baths and had a "pending" property as of eff date which had a garage bath, but it closed the next day or day after or day after that, whatever the time it was between eff date/inspection and signature date/date I'm sending my report, I sure as hell would use this property! It would add relevance to my subject showing market acceptance of a garage bath. Now, generally I would include it as a pending, but as I've said, I have included similar as a closed. But either way (pending and/or closed) I disclose that it was pending as of eff date and has since closed between the eff date and sig date. I even have a template I use in this case:
"Note: Between the effective date of this report and the signature date, *** pending has since closed" (I obviously add any other pertinent info)

Not misleading

 

[Deleted member 134708]

If our appraisal SCA model is the subject closed as of effective date at our most probable price opinion, then how can that price change due to events that happen after the effective date? I am waiting for any of them to address it!

The subject is held constant to 1 second in time. Sales before this 1 second have to be moved up to this second, sales after need to be moved back to this 1 second in time.

Pretty simple stuff. If you know how to move forward in time, you know how to move back.

 

[Mr Rex]

I consider the effective date as the cut off date for comparable sales versus pending etc. The 1004 from says the effective date is the date of inspection, thus my stance. However USPAP says:

139. EFFECTIVE DATE AND DATE OF THE REPORT
Question: I have been engaged to perform a valuation assignment. The assignment is to
develop an opinion of the market value of the subject property in its current “as-is”
condition. USPAP states, “Current appraisals occur when the effective date of the
appraisal is contemporaneous with the date of the report.” In this context, what
defines contemporaneous with the date of the report?
Response: In USPAP, there are three different types of appraisals: retrospective, current, and prospective.
Advisory Opinion 34, Retrospective and Prospective Value Opinions:
Current appraisals occur when the effective date of the appraisal is contemporaneous
with the date of the report. Because most appraisals require current value opinions, the
importance of specifying both the date of the report and the effective date of the analysis
is sometimes lost.
“Current” appraisal assignments are based on the effective date of the appraisal being
contemporaneous with the date of the report. Contemporaneous means arising, existing or
occurring during the same time period. In this context contemporaneous is not intended to mean
simultaneous. Because the “same time period” may very well differ from assignment to
assignment, one single specific time period cannot be provided that can be used for all
assignments. However, for an assignment to include a current appraisal opinion there must not
have been a significant change in the property characteristics or market conditions between the
effective date of the appraisal and the date of the report.

 

[J Grant]

The subject is held constant to 1 second in time. Sales before this 1 second have to be moved up to this second, sales after need to be moved back to this 1 second in time.

Pretty simple stuff. If you know how to move forward in time, you know how to move back.

That was my point...appraisers can't manipulate time. We can't move sales backward and forward in time/date.

The sale status of a comp is frozen the date it occurred, (closed 05/01/2017) The only thing the appraiser does is the appraiser can apply a market condition adjustment retroactive from date of contract of the comp up to effective date.