Data Cancer found....

[alebrewer]

It seems to me that it's common sense that sales where the loan was granted an appraisal waiver could be all over the place WRT their relation to true value. If we make the following assumptions: (1) an appraiser produces opinions of value in line with true market value, (2) the parties to the transaction used the appraiser's opinion in setting the sales price, and (3) the Realtor(s), buyer, and seller may, or may not, negotiate anywhere near the true market value of the property, then it necessarily follows that transactions where an appraiser was not involved will elicit sales prices with a wider variance WRT the true market value than transactions where an appraiser was involved.
The problem with the assumptions as stated, however, is that: (1) some appraisers DON'T produce opinions of value in line with true market value, and (2) some Realtors DO have a fairly good grasp of appraisal methodology and are capable of negotiating a sales price at or near the true value of the property.

 

[George Hatch]

I think it's fair to question whether the GSE AVM is "seeing" finished basement area that's being reported in the MLS listings as GLA. The $360k sale in the s/w corner is reported at the county as 144sf with 0 finished basement.

Mr Crawford apparently included the basement area for the $430k sale in his price/sf analysis. Did the same with the $397k sale.

 

[George Hatch]

We have too much time on our hands.

I was curious as to what we were seeing and what we weren't seeing.

If I was selling this theme to professional appraisers I wouldn't have picked a view property to do it. I would have picked one of Mejappz' many overpriced-by-25% examples as my test mule. At least some of those must be subdivision homes with no quirks.

 

[Joe Flacco]

I was curious as to what we were seeing and what we weren't seeing.

If I was selling this theme to professional appraisers I wouldn't have picked a view property to do it. I would have picked on of Mejappz many overpriced-by-25% examples as my test mule. At least some of those must be subdivision homes with no quirks.

Can't really pick a few examples and come to any kind of conclusion.

My observations about the high sales in the spring are that they are going to sell for that with or without an appraisal. That is where the buyers acting in their own best interest put the price, and more times than not are without contingencies. They are not outliers, they are comps. It represents the top of the range for the rest of the year.

 

[George Hatch]

I'm not saying the $430k transaction is an outlier in terms of the pricing, although it may be. But upon even cursory examination it is apparent that this property isn't the same as the other sales. Why would anyone think this one sale is driving the market [at the buyer/seller level] for the entire neighborhood?

 

[J Grant]

Somebody should make the MLS and agents require reporting of if waiver was used so that it can be analyzed.

I have said that multiple times here.

If the GSE's and entities were truly interested in transparency and public trust they would make it their business to do that, .

Loans granted with waivers on purchases are groped under conventional financing and there is no way to tell which got a waiver and which did not on any scale - indeed there is no way to compare the effect of a waiver in a purchase on the market.

I mean a purchase waiver is the SC price is the value, as long as it comes in within the FF AVM value range - but nobody gets to see what the top end of that range was.

The argument I assume, goes is what is the risk if it sells for two percent more - but each high sale makes a new comp for the next AVM or appraisal, and 2% added a month is 12% increase by the end of the year

 

[Joe Flacco]

If the buyers are bidding it up two percent more every month then it is what it is. I never see that though. When prices are going up, I usually see a burst of activity in the spring that expands the price range. Seems like it's one big group of buyers trying to buy the same properties. And every time a buyer does not get the house, they become informed about where the market is.

 

[chad hampton]

The situation Phil talks about is happening all over the country. If we all do a little bit of research in our market, we will find the same thing. I’ve already talked about the waiver I found in my backyard. He overpaid by roughly 8%. He’s probably one of the lucky ones.

I give Phil a lot of credit for his podcasts over the last 10 years. Unfortunately, he’s been right about damn near everything.

 

[J Grant]

It is something to see them create a kind of pieced-together Frankenstein of what an appraiser does to replace them - instead of just letting appraisers do the work. The problem was not appraisals; the problem was that they kept lowering the standards for appraisers and never provided the true third-party firewall, which most agree would be some version of round robin - or AMC 's divorced from r their own customer pressure. Add in low AMC pay, and the res side will lose or lose a lost of their best talent for a large segment of GSE lending.

The Frankenstein replacement is cobbling together tasks in the hope that it somehow makes up for the whole holistic process that one appraiser is able to handle.

Substitute a PDC collector instead of the appraiser on an inspection. Bifurcate the orders so the appraiser never sesses their own subject in person .. In other cases, use a WAIVER, let a vested interest party pick the value as long as it fits in a data-driven AVM range that nobody else viewed.
Rely on AVM, which has a place but is not a substitute for the kind of analysis a comp needs.

Tech is better for augmenting an appraisal rather than substituting for it.

Because they create a Frankenstein pieces replacement for an appraisal, it takes an army of staff to coordinate all the pieces, a data bank to check it, etc, etc. The WAIVER and hybrid valued properties will be bundled with loans of houses that were appraised, as C and D paper got bundled with A and B credit paper for toxic loans,

At the same time, they are making appraisals vulnerable because they are mainly done now on high-end complex and problem child properties or for buyers with the most marginal credit or income/equity. The expetions are a buyer who might get a regular property appraised due the appraisal cluase in a contract,.
Idk how much of the standards recently passed for AVMs will survive since the new admin might trash regulations, as Bush did - which led to the 2008 housing market crash. -

 

[J Grant]

I can report a few limited experiences where I was asked to do an appraisal, but then it got canceled because the buyer got a waiver. In both cases, they were the very high end for location purchase assignments, and I wondered in each case whether or not they would make value.

The fact that a waiver was used means they would get greenlighted for and close at the highest end for a subdivision contract price. Unkown if they would have appraised for that or not And of course unknown if their high sale price was based on last months high waiver granted sale price.