• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

contract price as appraised value

Status
Not open for further replies.

farmguy

Thread Starter
Member
Joined
Jun 27, 2007
Professional Status
Banking/Mortgage Industry
State
Texas
As an example I am appraising a tract for a purchase and say my indicated values after adjustment come in from $3,150 per acre (square foot, what ever) to $3,700 per acre and my tract is what would be typically thought of as a nice tract for the area for what ever reason. I sit and I ponder a while, because I am through adjusting, the range above is as precise as the market gets. I decide $3,500 is pretty well supported. I look at contract and it is $3,525 how many of you would have heartburn with the following statement

Giving consideration to the subject location, size, and other attributes that have a bearing on value in the area it is concluded that the current contract price is representative of the market and is utilized as the appraised value.

 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
It would give me heartburn. I believe the rationalization should come from the broader market, not the contract price.
 

farmguy

Thread Starter
Member
Joined
Jun 27, 2007
Professional Status
Banking/Mortgage Industry
State
Texas
Pam,
Yes that would be considered. And in our market now we are still seeing 10% to 15% per year on rural recreational tracts. Still waiting for the sky to fall.

But I guess I am more wondering if a contract would influence anybody. Again I am not talking some nutty number. I mean when the contract is within a percent or two of where you would be not having the contract, and the adjusted spread in market is say 15%.
 

lizhorvath

Member
Joined
Dec 11, 2003
Professional Status
Licensed Appraiser
State
Michigan
I'd be just as happy with NOT knowing the contract price. I believe our jobs are to indicate market value, not make a match to the contract price.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
IMO, When a contract falls well within the range I've found and very close to what I decided was Market Value, and the trends are OK with the contract price, then I consider that contract as another piece of the final market value reconciliation. I typically would not look over the contract until after I've almost totally finished the appraisal so it won't/Can't sway me.

You wrote:
"Giving consideration to the subject location, size, and other attributes that have a bearing on value in the area it is concluded that the current contract price is representative of the market and is utilized as the appraised value."

I'm thinking:
Giving consideration to the subject location, size, and other attributes that have a bearing on value in the area, plus considering this market appears to still be seeing moderate increases on rural recreational tracts, it is the reconciled opinion of the appraiser that the current contract price is representative of the market.
 

Couch Potato

Elite Member
Joined
Mar 15, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
As an example I am appraising a tract for a purchase and say my indicated values after adjustment come in from $3,150 per acre (square foot, what ever) to $3,700 per acre and my tract is what would be typically thought of as a nice tract for the area for what ever reason. I sit and I ponder a while, because I am through adjusting, the range above is as precise as the market gets. I decide $3,500 is pretty well supported. I look at contract and it is $3,525 how many of you would have heartburn with the following statement

Giving consideration to the subject location, size, and other attributes that have a bearing on value in the area it is concluded that the current contract price is representative of the market and is utilized as the appraised value.

So you identified a range of value from $3,150 to $3,700 for this type of property and your goal is to give an opinion of the "most probably price" the property would bring in the open market. Now you add an additional piece of market data showing two of the market participants actually want to exchange the property for $3,525.

Please explain the possible rationale for claiming any value is a more probable price for the property than $3,525.
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
Pending sales are good comps. The subject is a pending sale and a pretty good model match to boot.
 

PL1957

Senior Member
Joined
Jul 19, 2004
Professional Status
Certified General Appraiser
State
Illinois
But I guess I am more wondering if a contract would influence anybody. Again I am not talking some nutty number.
If the contract represents a legit market transaction based on all of the other requisite factors, I think any appraiser who DIDN'T take it into consideration wouldn't be a very good appraiser.

We interpret market data - this would be about as good evidence of market behavior as you could hope to find.
 

Mztk1

Senior Member
Joined
Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
I thought we were supposed to consider the contract, if we find it is a market transaction, as a pending sale in our analysis. I don't see any problem with saying "The subject sale is a market transaction, at arms length, and as such was considered as pending sale data in the opinion of value."
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks