Comment Caucus

[T-Dubs]

Unless there is a specific affect on price within the contract itself , such as a seller concession to be commented on, the reality is their contract price is nothing more than what the parties negotiated. ". There is no obligation on buyers and sellers to sign a contract at "market value"!!! They agree on a price and terms that suit them.
Below is a typical comment I can make , broken down into 3 sections, with bold type to show the reasoning:

" The sale contract price is above the appraisal opinion of market value. A sale contract price is a negotiated price between parties and can be affected by either party's individual motivations. No atypical terms were found in the contract. " This comment addresses the contract itself. It basically says, their price is their price and their price is their decision .

"It is typical in this market to see sale prices on the higher side due to lack of inventory and competitive bidding. " This explains market conditions that affected price.

The appraisal opinion of market value was developed using the most similar comps and applying market extracted adjustments. Additional sales and listings and pendings were also considered, as part of the appraisal development. " This sums up the support for my market value opinion and lets the reader know that I considered additional sales. and listings.

The whole statement:

" The sale contract price is above the appraisal opinion of market value. A sale contract price is a negotiated price between parties and can be affected by either party's individual motivations. No atypical terms were found in the contract. It is typical in this market to see sale prices on the higher side due to lack of inventory and competitive bidding.
The appraisal opinion of market value was developed using the most similar comps and applying market extracted adjustments. Additional sales and listings and pendings were aalso considered, as part of the appraisal development."

Thanks, for your time, insight and advice, J Grant!

 

[T-Dubs]

Be direct. And stick to what you can show. Adding speculation only opens the door for an argument or rebuttal. Your critics will always look for the opportunity to claim you relied on subjectivity and opinion and then proceed to challenge your integrity. You can deny them that opportunity by sticking to the facts, because they can't mischaracterize those as being subjective.

You always gots to stay one step ahead of the opposition.

Great advice. Makes total sense. Thanks again, G!

 

[George Hatch]

I edited that post to add more (which is something I often do on this forum)

 

[jay trotta]

The Keep It Simple, Shithead method, correct? I agree.

Keep It Simple Stupid

always felt the last word enables brain engagement, (1) of my old friends says he could never understand why residential appraisers don't keep it short
My old boss was adamant about short, direct wording, as we were always in court (back in the day) and did not want to arm the other side

 

[J Grant]

Be direct. And stick to what you can show. Adding speculation only opens the door for an argument or rebuttal. Your critics will always look for the opportunity to claim you relied on subjectivity and opinion and then proceed to challenge your integrity. You can deny them that opportunity by sticking to the facts, because they can't mischaracterize those as being subjective.

You always gots to stay one step ahead of the opposition. You must crush all hopes for a rebuttal in your initial report; cut them off before they can even get started. One way to do that is to make clear that your analysis was never limited to just the 5 or 6 sales in your SC but includes your identification and consideration of everything you looked at during the entire course of your research before you narrowed it down to the "most comparable" that you used in your report. You must not indulge them in the fantasy that if only they can show you another sale at the higher price that it will change your opinions. No one sale makes or breaks.

I usually include an estimate of the actual number of sales I researched and analyzed during the course of my assignment. That number is always several multiples of the number of comps I present in my report.

In my experience, they can still send sales for ROV/rebuttal no matter how detailed our preparation. I personally am not going to spend all kinds of time listing a bunch of sales I did not use, because who knows which other sales an angry owner or RE agent will send . I've even seen them send comps that are already on the report .!! A RE agent will want to go to bat for the deal as part of their due diligence. Though I will note on occasion a specific address sale that was not included and explain why.

I also sometimes add this kind of comment :
The appraiser considered a number of additional sales in the market area. It was found that higher price sales tend to be larger, newer houses with amenities such a pool. The lower price sales in the area tend to bee smaller, older houses or houses with no upgrades.

This statement addresses 2 different readers :- it answers why higher price comps to explain why they were not used ( even if they send an ROV, we already addressed it. ) It also shows a reviewer who pulls "comps" why some lower price sales were not used. Though a QC review will send sales anyway -annoying. A computer did not read your report and computer data spit out sales to forward.

The question was about a SC price comment. But some of the most contentious reconsideration of value disputes I 've gotten were on the refinance orders.

 

[glenn walker]

We caucused our peer consensus driven caucus on this issue and we all developed causation brain freezes and forgot what we were caucusing about . But based on the responses on this thread, we are getting many long and lofty opinions on how to handle this serious reconciliation problem, on why a opinion of value is lower then the sales price ( Sorry I mean Purchase Contract Price ) LMAO

 

[bnmappraisal]

(1) of my old friends says he could never understand why residential appraisers don't keep it short
My old boss was adamant about short, direct wording

I get that Jay and generally agree with your comment , but many times now, you get Skippy writing up the comparison approach comments something to the effect of "Best comps Used. Value is bracketed by the sales. Adjustments are market based."
That's pretty "short and direct" but doesn't tell the client/reader Jack $#*t

I'm not saying we all need to write dissertations but I don't think it hurts to take a few extra minutes to make sure our client understands how/why we opine what we do

 

[jay trotta]

I get that Jay and generally agree with your comment , but many times now, you get Skippy writing up the comparison approach comments something to the effect of "Best comps Used. Value is bracketed by the sales. Adjustments are market based."
That's pretty "short and direct" but doesn't tell the client/reader Jack $#*t

I'm not saying we all need to write dissertations but I don't think it hurts to take a few extra minutes to make sure our client understands how/why we opine what we do

I would agree to a point, AMC impact has brought about things such as; "Best comps Used. Value is bracketed by the sales. Adjustments are market based."

I believe GH said it best; "Be direct. And stick to what you can show"

PS: When Microsoft does an Update, someone needs to follow up on the glitches- If it impacts one portion of a program, how does one know what other impacts it has (Rant Over)

 

[sputnam]

I don't bother with any comment about it.... unless the client specifically requests such comments in the Letter of Engagement. Don't you think it's pretty obvious that, as the appraiser, I am aware of what my report says?

 

[J Grant]

I don't bother with any comment about it.... unless the client specifically requests such comments in the Letter of Engagement. Don't you think it's pretty obvious that, as the appraiser, I am aware of what my report says?

I wish we could all do that. In the "old days", the client did not expect a comment why SC price and appraisal value was different because DOH- see appraisal,
But then , some appraisers took it upon themselves to write an explanation - and now on the res mortgage side, most clients expect it and will ask for it if not provided. There sure as heck is no USPAP requirement for it and it shows the pathetic status of appraisers - like they have to grovel and apologize (oops explain ) why their value and SC price were different.