Closed Sale After My Inspection Date

[TRESinc]

https://www.appraisalinstitute.org/assets/1/7/MarketConditionsAddendum.pdf

Found another one...this time Fannie Mae a few pages down guidelines for declining markets, appraiser must use at least two comparable sales that closed PRIOR to the effective date...clearly they want sales that closed prior to the eff date as "closed"...

CLEARLY they want at least 2 sales that closed prior to the effective date. last time i checked a report for FNMA requires 3 comps, so if two of them are prior to the effective date then logic dictates one could be post-effective date...

 

[J Grant]

CLEARLY they want at least 2 sales that closed prior to the effective date. last time i checked a report for FNMA requires 3 comps, so if two of them are prior to the effective date then logic dictates one could be post-effective date...

I would not interpret it this way. This guideline is for declining markets only, when they want 2 sales that closed 90 DAYS prior to the effective date...I posted it to show they clearly differentiate the effective date as a cut off point for what a closed sale comp means .

I assume their guidelines for 3 comps are similar to link/ post # 42 here ( Freddie Mac) which states 3 comps that closed before effective date. See if you can email them if they would answer to clarify?

Imo, it is so basic, so fundamental that Fannie felt no need to come out with a guideline announcement about what the effective date means..

 

[The Warrior Monk]

@Michigan CG et al

This may be beyond a stupid question but...

I'm sitting on the couch on my phone so cut me a little slack if I'm out in left field.

1) effective date is for the subject and the subject only. Its condition, presence, etc. all centered around valuing the subject on a certain date in time.

2) Let's take a home you inspected 6 months ago. You should be able to use and show all closed sales from today. And if need be give them negative market conditions adjustments to account for time/market conditions? (Increasing market)

If sales from the past are a good indicator of value, then the opposite must also be true. Sales from the future are just as good. Am I wrong? (Future sales aren't better due to market conditions are held constant)

This issue is discussed in Advisory Opinion 34.

 

[Deleted member 134708]

This issue is discussed in Advisory Opinion 34.

Thank you. My fault for asking it as if, or implying a retro appraisal. I simply meant current appraisal you that just took you 6 months to get around to writing.

I gave bad example and more of a commercial example I would guess.

Suppose more realistic time frame would been saw 3 weeks ago and writing today.

 

[Michigan CG]

JGrant referenced a "complaint" of fraud. She never indicated that she thought it was fraudulent.[/QUOT

Pete please see below, she doubled down with this post.

Making a new false representation effective date based on a later drive by rather than original inspection date would seem to fit all the categories of fraud..

 

[Mr Rex]

Fraud versus misleading. So close that its not a hill worth misrepresenting ones ethics over. The SOB was or was not closed on the effective date of the appraisal, the date of the full required inspection required. Any BS after that is a deliberate attempt to mislead(deceive) the user of the report and a deliberate lie AKA FRAUD.

 

[Mark K]

Where is the deception, the fraud, the lies, etc. if the appraiser clearly discloses in the report?

 

[Deleted member 134708]

Saw house 2 weeks ago. Writing report today. Market screaming higher at 1% per month.

Comp 1 sold 2 weeks prior effective date. Adjusted +0.5%. Comp 2 sold 2 weeks after effective date. Adjusted (0.5%).

What's misleading? Both closed And conditions were adjusted for. Comp 2 explained sold after, shown sold after. Said why used.

What's the job of an appraisal? Seems using best replacement properties supersedes everything when trying to give credible results.

Effective date is for value and the subject. Not comps.

Effective date 07/01/2017.
Appraiser A can't use 3 comps sold 07/02/17.
Appraiser B saw house on 07/03/17 and can use them all and only those sales.

If you believe that scenario, Than appraisals are absolutely junk And I want to get on board with getting rid of them asap as they are a highly flawed product.

 

[J Grant]

Perhaps appraising will get rid of you before you get on board to get rid of appraisals...The market is screaming higher so you put in comps that closed after effective date as sold and STILL adjusted them up? Holy ** batman is all I can say; keep your fingers crossed you avoid a retrospective field review .

 

[J Grant]

Nottrav-"Effective date is for value and the subject. Not comps."

The VALUE IS DERIVED FROM THE COMPS, thus THE EFFECTIVE DATE APPLIES TO THE STATUS THE COMPS AS WELL...otherwise, why even have it? It would be an effective date was inspection only, with the market value opinion as of the signature date. But that's not how it is. It is the value as of the effective date, with report signed X days or weeks later.

The period after the effective date until the signature date is to write the report , not to change information around from what it was on the effective date. A sale did not close as of the effective date, it was pending. The fact that you signed the report 2 weeks later does not change that fact.

If you want to comment that between eff date and signature date the pending sale closed at X$ price, then factor that in analysis.