Comments on declining market

[tjcou812]

Hi all
About three-four months ago I recieved I think it was the appraisal buzz newsletter and they had a comment on the declining market to use in the appraisal report. I must have deleted it but it seemed from what I remember a pretty good statement. Does anyone recall it or do have any comments that you put in your report.

Thanks,
Todd

 

[Mztk1]

I know there are "canned" phrases out there for declining markets. I've seen some pretty detailed ones on reports I've been looking at, but I don't use any. To me, each neighborhood has a unique market and has to be analyzed and commented on separately. Even when I go back to a project two or three weeks later for another report, the market will have changed these days and I have to renew my comments for it.

Maybe CT is different and you guys haven't been hit as hard as us. Earlier, when the market was more or less stable, my comments on market conditions didn't change that much. Things are different now.

 

[Lee Lansford]

Exactly what we need!

Exactly what we need! One more "canned comment" for appraisers to include in their appraisals.

My observation: Many appraisers include in their appraisals what appears to be "canned" comments.
These comments appear to be all "neat and pretty" and sure do "sound" nice.
What would be better is this: if the comments actually had any relevance to the appraisal.

Bottom-line: Keep away from canned comments unless the words TRULY apply to the situation at hand.

As a profession, we have way too much "monkey-see, monkey-do".

 

[tjcou812]

The reason i'm asking is I do believe that the comment did have some relevance to the market conditions in the neighborhood of the subject property. I do observe the conditions of each neighborhood for each appraisal and comment on them case by case. I do not use "canned" comments. I do use my own words but like I said the comment that I was looking for seemed to be a fit for the situation on the neighborhood of the subject property. I just don't know what the whole comment said , I can remenber certain parts of the comment but not all of it.

 

[Restrain]

Rather than look for someone else's comment, write your own. Such as, "Over the last year, the number of sales has declined significantly, coupled with a rising inventory and evidence of a decline in the values. It is noted that the exact amount of decline is not determinable at this point due to the limited number of sales. Blah, blah blah." Keep it to a couple of paragraphs, and leave out graphs, etc. This is a Summary, not a Complete appraisal. UWs do not want to, and won't wade through the detail.

 

[lmichels]

I have a canned statement for stable markets in my boilerplate. But now even that gets modified on most of my reports to talk about whether the neighborhood is in danger of future declines due to inventory, demand, etc. Many lenders now require statistical analysis to support it, so I will describe what analysis I used (sale/resale, paired sales, average sales price over time, etc.). Most of our markets have a minor linear (steady) rate of decline, but 2 markets I've been in the past 4 months are in freefall - the rate of decline is increasing every month. Now that's a hard one to describe/predict. Has anyone else come across these where it's obvious that the worst is still to come? How to do you handle it?

 

[ZZGAMAZZ]

What confuses me are the daily newspaper articles that describe horrendous declines of 10% - 15% during the past year, although I routinely witness 10% - 20% declines during the past 90 days...

 

[Mztk1]

What confuses me are the daily newspaper articles that describe horrendous declines of 10% - 15% during the past year, although I routinely witness 10% - 20% declines during the past 90 days...

If you are doing your job right, you know before the papers and what you see today will be reported on in another month or two.

 

[Vegan702]

I have been getting away from the canned comments lately. They sound better then the stuff I write, but at least what I write is mine and not copied from somewhere. If I ever get in trouble I will have no problem stating exactly what I wrote. Whereas in some of the canned comments I would need a dictionary to look up the words in them and that wouldn't look to good in front of the board when I couldn't explain my own commentary in my report.

 

[Restrain]

zzgamazz:

Realtor information takes all sales, lumps them together, and divides total sales prices by total sales. This creates an apples/oranges situation. Appraisers look at the same type of home, in the same market. That shows up in varying results, from significant losses to actual increases.