Comment Caucus

[George Hatch]

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.

I've been telling appraisers FOR YEARS that it isn't enough to simply support your own value conclusions. That if you're going to murder someone's hopes and dreams that you need to go on offense and proactively demonstrate why you think their opinion CAN'T be considered a reasonable expression of MV. You need to cut their toes off before they can even get the idea that they can win an ROV with you. That's why I solicit their comps up front - that's not an act of courtesy or genuine concern on my part for their opinions, it's an act of warfare. I want to see their battleplan in advance so I can sabotage them.

 

[George Hatch]

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.

Strawman. I never ever said or implied that. What I said was I comment on how the contract price relates to the comps, not how the comps relate to the contract price.

"Based on my research and analyses, the subject's contract price is completely outweighed by the comparable sales data."
"Based on my research and analyses, the subject's contract price is consistent with the comparable sales data."

Moreover, sometimes its the comps that are higher, not the subject's contract price.

 

[J Grant]

I've been telling appraisers FOR YEARS that it isn't enough to simply support your own value conclusions. That if you're going to murder someone's hopes and dreams that you need to go on offense and proactively demonstrate why you think their opinion CAN'T be considered a reasonable expression of MV. You need to cut their toes off before they can even get the idea that they can win an ROV with you. That's why I solicit their comps up front - that's not an act of courtesy or genuine concern on my part for their opinions, it's an act of warfare. I want to see their battleplan in advance so I can sabotage them.

Well, we should not feel we are MURDERING someone's hopes and dreams. And they are free to think their opinion is a reasonable expression of MV .

And it should not be warfare with an appraiser under attack/ on the defensive for daring to not hit a SC price. This attitude shows why the so called firewall to insulate appraisers is a fabrication. Appraisers if anything bend over backward to accommodate a SC price and THAT is a problem and it is because of the guilt and pressure.

The borrower is free to pay the full contract price !!!!!!! The appraiser is not stopping them!!! This wrong to put this kind of pressure and guilt on the appraiser. The RE agent is at fault for pushing buyers to agree to SC prices that are higher than a cash contribution a buyer is free to make to close an appraisal gap

During the rapid acceleration of prices in pandemic we saw more contracts where buyer agreed to pay the SC price regardless of the appraisal value. Some of them might regret that later but it is what they agreed to. .

 

[George Hatch]

My hyperbole notwithstanding, I've always advocated that appraisers go on offense to anticipate and neutralize the obvious avenues of criticism of their work to the extent they're able. It's faster and easier to do that up front in the original report than to get a stip a week later where they expect the appraiser to drop everything they're doing to respond within the hour.

It's primarily in the appraiser's own interest to get out in front. Proactive > Reactive.

IMO

BTW, this is one type of IRL situation (among many) that a PAREA course can never emulate.

 

[glenn walker]

Since mosts borrowers today get a copy of the report, a good reconciliation should be written to where the buyer borrower can understand why you came in blow the Purchase Price. It should also be written to where their loan officer can tell them why you came in under contract price. Its easy to do and it saves a lot of time and cuts out most requests for a ROV.

 

[sputnam]

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

Only theory I have about why so many residential appraisers don't keep it short is... some don't actually understand the principles and theory of appraising and they throw everything they can think of into the report to try to avoid revision requests. We do have to address all the issues. We rarely need paragraphs to do it. Example I see a lot is with HABU. Some appraisers will write long sections explaining the definition of HABU and how they went through the 4 tests. The only thing that is actually required is a brief summary of the support and rationale for the conclusion. Most of the time, in residential appraisals, it takes one or two sentences.

 

[J Grant]

Strawman. I never ever said or implied that. What I said was I comment on how the contract price relates to the comps, not how the comps relate to the contract price.

"Based on my research and analyses, the subject's contract price is completely outweighed by the comparable sales data."
"Based on my research and analyses, the subject's contract price is consistent with the comparable sales data."

Moreover, sometimes its the comps that are higher, not the subject's contract price.

We are appraising the subject, we are not appraising the contract price. Therefore, imo , commenting on the how the comps relate to the contract price is NA. The comps are already commented on in the report to how they relate to our opinion of value. Now the comment is our opinion of value vs the contract price.

I dont spend time trying to dis prove why their SC price is not market value- the parties have no obligation to agree to a price at "market value ". I give a summary of support for MY market value opinion ,comment on how either a term in the contract ( concessions ) affected price , or market conditions might have affected price ( low inventory ),

I keep it brief because I doubt most parties care much what I write- either they will find a way to move forward with the purchase or not.

 

[J Grant]

Only theory I have about why so many residential appraisers don't keep it short is... some don't actually understand the principles and theory of appraising and they throw everything they can think of into the report to try to avoid revision requests. We do have to address all the issues. We rarely need paragraphs to do it. Example I see a lot is with HABU. Some appraisers will write long sections explaining the definition of HABU and how they went through the 4 tests. The only thing that is actually required is a brief summary of the support and rationale for the conclusion. Most of the time, in residential appraisals, it takes one or two sentences.

I keep it short when short suffices, mid length if applicable, and will go long if something merits it ( which is less frequent but have done it )

What I find odd reading some appraisals is the disparity - short comments or no comment when a thorough explanation is desperately needed, and long, winding narrative about a nothing burger.

 

[Dublin ohio]

Only theory I have about why so many residential appraisers don't keep it short is... some don't actually understand the principles and theory of appraising and they throw everything they can think of into the report to try to avoid revision requests. We do have to address all the issues. We rarely need paragraphs to do it. Example I see a lot is with HABU. Some appraisers will write long sections explaining the definition of HABU and how they went through the 4 tests. The only thing that is actually required is a brief summary of the support and rationale for the conclusion. Most of the time, in residential appraisals, it takes one or two sentences.

If you can't amaze them with ability. Baffle them with BS

 

[Fernando]

If you can't amaze them with ability. Baffle them with BS

I don't put BS in my reports. I try to fit everything into a field and not use addendum pages. Readers sometimes skip addendums and I want my readers to read every one of my enlightening comments.
I would spend time altering my comments including changing fonts to fit everything into a field. I doublet any other appraiser is as considerate and conscious in making a good readable report as the Great Fernando does.