Comment Caucus

[Sadie]

A rabbit hole of skewed logic:

An appraisal is an opinion of market value. Market value is the price a willing buyer pays. The sales contract price is market value . The appraisal supports the contract price.

The agreed upon price in the sales contract is only indicative of what that particular person(s) is willing to pay for the property, not the general market.

 

[residentialguy]

Love you back!
WRT to my response - The issue I have is not that you went the extra mile to ask a buyer their motivation ( which can explain their price )

Issue is: " It's just a possible reason I found of why they are willing to pay over my supported opinion of market value.
It should be: "a possible reason I found of why they are willing to pay their CS price.

Making comments about their CS price being over ( or under ) the opinion of MV can be construed a s an appraisal relative to a benchmark of the sales Contract $ price number

USPAP-The appraiser may report the opinion of value as a single number, as a range of values (minimum to maximum), or relative to a benchmark. This should be specified in the agreement for services.

It's not a USPAP violation.

 

[residentialguy]

The issue I have is not that you went the extra mile to ask a buyer their motivation ( which can explain their price )

A requirement is not an extra mile, imo

 

[J Grant]

The agreed upon price in the sales contract is only indicative of what that particular person(s) is willing to pay for the property, not the general market.TRue

Correct

Though our opinion of market value is not what the general market would be willing to pay either...i

We can not predict all the various prices individual buyers might pay out in the general market. However, our value range should be within the predominant range the typically motivated buyers would pay in the general market - which would make our opinion of the point value well supported

 

[J Grant]

A requirement is not an extra mile, imo

Analyzing the contract is a requirement. Calling a buyer and seller to find out their individual motivation is not a requirement ( it is an extra mile in a good way, wrt due diligence ) But it is a call I usually do not make because I do not want to get too involved with buyers or sellers and their price. If I can find out an indivdual motivation at the inspection or talking to RE agent I will report it-

 

[residentialguy]

Analyzing the contract is a requirement. Calling a buyer and seller to find out their individual motivation is not a requirement ( it is an extra mile in a good way, wrt due diligence ) But it is a call I usually do not make because I do not want to get too involved with buyers or sellers and their price. If I can find out an indivdual motivation at the inspection or talking to RE agent I will report it-

Nope. Analyzing the conditions of the sale requires you to talk to the party of the transaction, since there is no other way to get that information.

 

[J Grant]

It's not a USPAP violation.

It is not a USPAP violation to compare their CS price to our opinion of Market value - (or vice versa ) but according to USPAP, that is a benchmark appraisal and is actually a second appraisal opinion ( needs it 's own work file). Most reviewers or UW would not care and if I were doing a review and saw it I might not even have the heart to go after it -

The main problem with it is it leads to distorted thinking of the clients ( and even of the appraiser ), that the SC price is market value so why didn't the appraisal meet SC price.....

 

[J Grant]

Nope. Analyzing the conditions of the sale requires you to talk to the party of the transaction, since there is no other way to get that information.

I do not see that as a USPAP specific requirement that we must talk to the parties of the subject wrt their transaction to anlayze the conditions of sale.

The conditions of sale are written in the contract - is there a concession or other terms that affected price. Their motivations are not a condition of sale. - we might need interview parties regarding a comp sale price, but we are not in that mode for a subject. We will not be adjusting a subject's sale price for their motivations or conditions of sale, because regardless of their particular motivations, our MV opinion of the subject assumes a transaction at the terms in the MV definition, at a price not affected by concessions etc

 

[residentialguy]

I do not see that as a USPAP specific requirement that we must talk to the parties of the subject wrt their transaction to anlayze the conditions of sale.

Read you certs
5. I researched, verified, analyzed, and reported on any current agreement for sale for the subject property.

 

[residentialguy]

I do not see that as a USPAP specific requirement that we must talk to the parties of the subject wrt their transaction to anlayze the conditions of sale.

The conditions of sale are written in the contract - is there a concession or other terms that affected price. Their motivations are not a condition of sale. - we might need interview them for a comp sale price, but we are not in that mode for a subject. We will not be adjusting a subject sale price for their motivations or conditions of sale. Our MV opinion of the subject assumes a transaction at the terms in the MV definition, at a price not affected by concessions etc

Motivations are a condition of sale. They are intrinsic in the whole definition of market value.