Contract, New Construction

[CGinMN]

Wouldn't the results need to be analyzed to determine whether the failure to do so was or wasn't appropriate?

Yes, exactly. They're saying theoretically in a tight market appraisers should be adjusting dollar for dollar, but that's not what they've found. There's no empirical analysis - such as comparing it to other periods when supply and demand were more in balance. Just dragging appraisers based on what they think should happen.

 

[J Grant]

Yes, exactly. They're saying theoretically in a tight market appraisers should be adjusting dollar for dollar, but that's not what they've found. There's no empirical analysis - such as comparing it to other periods when supply and demand were more in balance. Just dragging appraisers based on what they think should happen.

They have too much time on their hands, and their new toy is mega data , running thousands of appraisals and market data over X years for comparison and drawing inane conclusions from it. t a

 

[CGinMN]

"Market theory suggests that sellers would typically aim to recover the expense of the seller concession by increasing the price, so something close to a dollar-for-dollar adjustment would be the predicted outcome of the appraiser’s analysis in most cases."

Not every sale went into multiple offers during this period. Even if many did, sellers usually don't consider only their net. They also weigh the perceived strength of the borrower's financial position; sale terms, such as if the buyer is willing to give them the closing date they need to get into their next home, inspection, financing and appraisal contingencies, appraisal gap clauses, post-inspection negotiations, etc.. During extremely competitive markets with multiple offers, market theory suggests buyer qualification and terms play a more important role.

 

[William Rightsell]

Are they saying that the credibility of the appraiser is undermined just because the results are inflated by not adjusting? Wouldn't the results need to be analyzed to determine whether the failure to do so was or wasn't appropriate?

No. They are saying a dollar is a dollar. Not hard to understand and not a lot of analysis needed.

Seems as tho even FNMA (the spewer of all things convoluted) has actually decided to give us all a pretty blatent hint. Well...those of us that hadnt figured it out long ago.