Data Cancer found....

[George Hatch]

In any case, more disclosure is great. There's no such thing as too much transparency in the data we use.

 

[Joyce Potts]

This is what I'm seeing of his analysis

These sales range in size between 1622-3175sf. That $430k sale he's complaining about is 2904sf and it backs to and has a view a lake view. The 360k sale on the s/w corner of the lake also has a view but the GLA is 1444sf - the smallest home in this dataset.



View attachment 94701

S

BTW
If I extend the search back 3 years, there was a 02/2022 sale of a 2328sf home with the water feature view that sold for $382k, so that's something an AVM would pick up, even if Mr Crawford didn't.

View attachment 94704

The point I'm making is that whether appraisers know about the waiver or not it won't affect their value conclusions. Those sales still happened at those prices, and "seller concessions" or "non-cash financing" weren't of effect on those prices.

Heck, the GSE AVMs actually have access to which transactions were done with waivers. I don't know if they're using that access yet but my guess is that if not then it's only a matter of time until they do.

The argument COULD be made that WRT the financing the AVMs can see more than the appraisers can see. That is, unless the brokers decide to opt in to reporting the financing that was used in their closed sale listings.

The question is, despite a waiver or the knowledge thereof, do waivers influence the market? In Phil's example, I think he makes a compelling argument that they can. You can drill down and grill up all the other variables of the comparables he used, but at the end of the day, I don't see how anyone can deny that high sale was not 'influencer' to some degree.

In Phil's example, no one asked the Realtor (who is NOT a disinterested third-party) what particular motivations prompted the buyer to pay significantly more over the last several historic sales--that is THE BETTER QUESTION, more so than the waiver issue. Realtors are compensated transaction facilitators, and if you believe a Realtor is the best verification source, think again. As a Broker myself, I've N E V E R had a phone call on any of my listings or sales in 45 years asking me for any other information that I already didn't disclose in the MLS listing.

I overpaid on the last house I bought 2.5 years ago due to personal motivations. It was originally a cash offer, then I elected to get a short term bridge loan and got a waiver. The lender didn't really care about the value of the property, they cared about qualifying me as a buyer, getting to the closing table and cashing in where all lenders make their money--upfront.

You can get five different appraisals on Phil's subject property and get five answers. And I disagree that the basement was included, because I'm not seeing it. The lender would NOT be making the loan if their other valuation sources were excessively out of the ball park. Appraisers always think there are definitive answers to every appraisal assignment and that's rarely ever the case. That sale was clearly a MARKET INFLUENCER and that's the sole point Phil was trying to make.

Argue on.

 

[George Hatch]

That sale isn't any more of an influencer than any of the other sales, including those in the low $300s.

Since you and your opinion were mentioned, I'd ask why YOU didn't spend the 10 minutes it took to look more deeply into this dataset as I did. You didn't even have to do any search to identify the properties in question. did you even look at a map before agreeing or disagreeing with Phil's analysis? Did you consider his subject's sales history? Because the info is readily available.

Lemme ask you: if you were selling the data cancer line would you have used a view property at the top of the size range for your test mule? Or would you have sought out a generic tract home that was well bracketed in sizes in your dataset?

This forum ain't a roomful of RE brokers. We have the technical competency to understand what we're looking at. We're not compelled to assume anyone knows what they're talking about simply by virtue of being an appraiser. Or an activist.

If I thought his conclusions were well supported I'd have said so.

 

[Joyce Potts]

That sale isn't any more of an influencer than any of the other sales, including those in the low $300s.

Since you and your opinion were mentioned, I'd ask why YOU didn't spend the 10 minutes it took to look more deeply into this dataset as I did. You didn't even have to do any search to identify the properties in question. did you even look at a map before deciding the $430k was crazy?

Lemme ask you: if you were selling the data cancer line would you have used a view property at the top of the size range for your test mule or would you have sought out a generic tract home that was well bracketed in your dataset?

Because George, I wasn't asked to do drill down into the particulars of the market data. I recommended to Phil to caveat his findings that most all other variables or dis-similarities were essentially equal. Do you drill down or grill up on any and all graphs and data you're handed by someone else, with the exception of litigation? The point Phil was trying to make was if that high sale was an influencer. You're saying no. I'm saying it's very possible. Phil is NOT the only person suggesting that waivers can influence the market. I find they can be. Just like when I come across an excessively high sale that doesn't always make sense that closes for conventional and did have an appraisal completed on it.

 

[Terrel L. Shields]

But FNMA basically is saying judgment be damned, everything must be quantified and available for data mining by them.

 

[Sadie]

When fannie or freddie grants a loan, they can provide Waiver disclosure to the agent or the broker who can put it on MLS.

My argument is not limited to the outcome of appraisals. my argument is that no outside analyst can determine the effects that WAIVERS have on a market since there is no disclosure readily available.

Though indeed, if it were available to appraise just as they know about FHA or other financing, such as cash, the appraiser could determine if a price might have been affected by a WAIVER

The MV definition does not even cover waivers since they did not exist or exist on any scale for purchases when the definition was developed. Waivers do not act like a concession, they are thei own unique thing that can influence price due to their specific valuation method, allowing a RE agent or loan officer or SC to determine the value for the LTV% of a loan ( as long as it is within the who eve sees it? AVM range )

With an appraisal, everything is out front - the sales used, the methods used, the narrative explanation. The appraiser's name and license to be linked to it.

In a while, F/F and/or individual lenders will be able to determine the effect of the waivers. As in how many short sales/REO properties had an appraisal waiver at purchase. I have seen several short sales recently and while I don't know if waivers were involved, all had small down payments.

 

[George Hatch]

Because George, I wasn't asked to do drill down into the particulars of the market data. I recommended to Phil to caveat his findings that most all other variables or dis-similarities were essentially equal. Do you drill down or grill up on any and all graphs and data you're handed by someone else, with the exception of litigation? The point Phil was trying to make was if that high sale was an influencer. You're saying no. I'm saying it's very possible. Phil is NOT the only person suggesting that waivers can influence the market. I find they can be. Just like when I come across an excessively high sale that doesn't always make sense that closes for conventional and did have an appraisal completed on it.

Fair point, but now that you know more about the properties we're talking about do you still have the same opinions on his comparisons?

He didn't mention his subject's site influence or its larger GLA, and he OMITTED from his analysis that 1444sf home at the s/w corner of that pond which sold for $360k. Don't these omissions strike a chord with you, because they're definitely leaving a mark on my opinions.

FWIW, there are 5 actives in a 3-mile radius which bracket the age and GLA and lot areas of this property. (none in this neighborhood, though) I don't think any of them back to a water feature. The lowest list price of the group is $425k. A year ago the lowest priced sales started at about $350k or so. Are we to blame these price increases on waivers?

 

[chad hampton]

Not good. The largest home should be selling on the lower side of $/sf. This data cancer might even be worse than originally thought. Even with a retention pond view - which in my market is a relatively minor adjustment, if any at all.

 

[George Hatch]

Maybe so, maybe not; because the sales are apparently saying otherwise. Regardless, if the topic is waiver-induced data cancer this is still a poor choice for analyzing that because of the larger size and the view amenity - which WAS significant enough to the broker to get prominent mention in the listing.

 

[George Hatch]

The sales in his dataset which sold after the 04/2024 sale ranged from $320k-$347k, not including the 05/29/2024 sale of the waterfront property with the much smaller home which sold for $360k. His dataset is showing a $27k spread between 05/2024 and 09/2024, but it would be $40k if his dataset were more complete.

Here are the other 2024 sales after 08/2024:
$310,000; 2350sf in 12/2024
$335,000: 1736sf in 10/2024

Here are the 2023 sales which sold prior to his dataset:
$320,000; 2064sf in 12/2023
$297,000; 1568sf in 10/2023
$330,000; 1856sf in 07/2023
$326,000; 1804sf in 06/2023
$355,000; 2207sf in 05/2023
$300,000; 1906sf in 04/2023
$355,000l 1899sf in 04/2023
$360,000; 2200sf in 01/2023

By my count these before and after sales are not screaming at some big price jump at any point during the last 2 years. There are (2) sales in 2023 and (1) sale in 2024 at $300k, but aside from that most of the action is between $320k and $360k despite the huge difference in the size ranges. Only the subject and one other sale sold in excess of $360k.

The subject might have sold too high for an appraisal, I can't tell. But the one thing I'm not seeing is the alleged effect on any of these subsequent sales.

Others might disagree.