Comment Caucus

[T-Dubs]

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

Ha!
I could not agree with you more, Jay. Thanks for that.

 

[George Hatch]

I anticipate the question because it's a reasonable one to ask - did I analyze and consider the contract price during the course of my valuation and how does the contract price compare to the comps? At least some of the time the borrower is going to ask, particularly if I conclude to something other than what they think is the value. Easier to do it directly in my Sales Comparison in my original report than to respond to the stip 2 weeks from now when I'm busy doing something else or wasting my time on esoteric Forum topics.

 

[J Grant]

I anticipate the question because it's a reasonable one to ask - did I analyze and consider the contract price during the course of my valuation and how does the contract price compare to the comps? At least some of the time the borrower is going to ask, particularly if I conclude to something other than what they think is the value. Easier to do it directly in my Sales Comparison in my original report than to respond to the stip 2 weeks from now when I'm busy doing something else or wasting my time on esoteric Forum topics.

Asking A) did an appraiser analyze and consider the SC is different than B) asking why the SC price and appraisal value are different. The former is required by USPAP, the latter B is not.

B is done as a client service, so the poor loan officer can show it to the enraged RE agent or disappointed borrower. It never should have been asked at all. DOH. The appraisal is why the market value opinion is what it is. A sale contract price is negotiated before the appraisal is done and their negotiation and motivations belong to them.

 

[T-Dubs]

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

Okay.
Have any comments regarding Solar? Or addressing these new PPA's? Say you're appraising a new construction- The builder, in partnership with a solar company, develops a subdivision wherein all the homes are sold with solar already installed by said solar company. The buyer has the option of either taking over the UCC-1 (sometimes called a "fixture filing") or they can buy it outright at the time of purchase. My question: Is the solar considered owned or leased by the home builder? Thoughts or comments, Grumpy? (Sorry, I mean Glenn)and

 

[George Hatch]

Asking A) did an appraiser analyze and consider the SC is different than B) asking why the SC price and appraisal value are different. The former is required by USPAP, the latter B is not.

B is done as a client service, so the poor loan officer can show it to the enraged RE agent or disappointed borrower. It never should have been asked at all. DOH. The appraisal is why the market value opinion is what it is. A sale contract price is negotiated before the appraisal is done and their negotiation and motivations belong to them.

I don't understand why you think it's a problem or why it would be inappropriate for anyone to even ask the appraisers to comment. MOST of the time the contract price will relate directly to the comps and fit right in with the dataset. The subject is often its own best comparable. There's no reason for anyone to think that saying so if/when that's the case amounts to rubber stamping the contract price.

I had one last week where the borrower had previously gotten a 01/2022 appraisal for $14M but I ended up at far less than half that. I knew there would be some weeping and wailing so I addressed the situation directly in my report. I saw it and there wasn't any info or comparables therein that were of any effect on my opinions and conclusions. I didn't come out and call the appraisal report a lie, but I also didn't shy away from basically saying I don't actually care what anyone else thinks about the value; I'm still going to do what I do regardless of what anyone wants.

 

[J Grant]

I don't understand why you think it's a problem or why it would be inappropriate for anyone to even ask the appraisers to comment. MOST of the time the contract price will relate directly to the comps and fit right in with the dataset. The subject is often its own best comparable. There's no reason for anyone to think that saying so if/when that's the case amounts to rubber stamping the contract price.

I had one last week where the borrower had previously gotten a 01/2022 appraisal for $14M but I ended up at far less than half that. I knew there would be some weeping and wailing so I addressed the situation directly in my report. I saw it and there wasn't any info or comparables therein that were of any effect on my opinions and conclusions. I didn't come out and call the appraisal report a lie, but I also didn't shy away from basically saying I don't actually care what anyone else thinks about the value; I'm still going to do what I do regardless of what anyone wants.

Oh my , you have fully migrated to the dark side, where the SC price is the value cause it is the SC price !! ( you phrased it a better but come on, MOST of the time the CS will relate directly to the comps?? And fit right in with the data set ?

I can complain about this kind of expectation , since res lender appraisals is what I do, you claim you rarely do them, yet comment frequently on them

. I can well understand why parties ask the question, why is the SC price not the same as the appraisal value, I already explained I get it as a client service, the lender is stuck trying to appease an upset borrower or home owner. But technically, it is not an appraisal standard and not in USPAP for an appraiser to explain why their MV opinion is not the same as a SC price. That said, being that it is expected now I have no problem providing a comment on it.

 

[George Hatch]

So you really don't think the contract price lines up with the MV most of the time? If so, then how can you justify using closed sales data which were all "contract price" up until the moment they closed?

I just gave you an example where I demonstrated that I don't care what anyone else thinks the value is because I'm still going to do what I do - which is exactly what I'm supposed to do as an appraiser. This whole notion is weak that appraisers need to be protected from the sales contract because some appraisers are too lazy to fight when they need to fight. Fighting when we need to fight is the only reason we're here.

 

[J Grant]

The below is a bit of sarcasm, but also true. Wish we could just state the following :

To understand the market value opinion, READ THE APPRAISAL. For understanding the sales contract price, please contact borrower, lender or RE agent for why why their price is their price.

 

[glenn walker]

Oh my , you have fully migrated to the dark side, where the SC price is the value cause it is the SC price !! ( you phrased it a better but come on, MOST of the time the CS will relate directly to the comps?? And fit right in with the data set ?

I can complain about this kind of expectation , since res lender appraisals is what I do, you claim you rarely do them, yet comment frequently on them

. I can well understand why parties ask the question, why is the SC price not the same as the appraisal value, I already explained I get it as a client service, the lender is stuck trying to appease an upset borrower or home owner. But technically, it is not an appraisal standard and not in USPAP for an appraiser to explain why their MV opinion is not the same as a SC price. That said, being that it is expected now I have no problem providing a comment on

O' No we back to MV and SC Price LMAO

 

[J Grant]

So you really don't think the contract price lines up with the MV most of the time? If so, then how can you justify using closed sales data which were all "contract price" up until the moment they closed?

I just gave you an example where I demonstrated that I don't care what anyone else thinks the value is because I'm still going to do what I do - which is exactly what I'm supposed to do as an appraiser. This whole notion is weak that appraisers need to be protected from the sales contract because some appraisers are too lazy to fight when they need to fight. Fighting when we need to fight is the only reason we're here.

I am fine with getting their sale contract and believe it is relevant. I am not one of those ( check my past posts ) who said we should not get them, though I believe if we did not have them, quite a few MV opinions would be different !

I can not understand your argument about closed sales data. Their prices are their prices. Appraisers are supposed to pick sales comps by their similarity to subject, not pick by their SC price - though there is a case for searching by prices as one part of a search, as well as a case for throwing out a very high or very low outlier price.

But the sales prices of the comps are not obliged to be "market value". They are prices. We adjust the prices via the adjustments and reconcile from the adjusted range. Sometimes our subject SC price fits in the adjusted range, other times it is higher or lower than it.