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Define: Transaction Value?

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Thomas J Kirchmeyer

Sophomore Member
Joined
Apr 29, 2002
Professional Status
Certified Residential Appraiser
State
New York
Can someone define TRANSACTION VALUE please? In New York State Appraisal Regs, Section 225.63(d) according to regulation Y states that “All transactions of $1,000,000 or more” require a state certified appraiser (no appraiser assistants or licensed appraisers). Does TRANSACTION VALUE = loan amount or estimated market value? And if the appraisal assignment does not disclose a loan amount or an estimated value, how would a licensed appraiser (not certified) know if they should accept the assignment or not? The value cannot be determined until after an appraisal is completed. If the appraiser’s opinion of value is $950,000 then he or she is OK but if they arrive at a value of $1.1M they are violating state regs and should not have accepted the assignment? This is a very grey area that needs to be better clarified. Any guidance you can provide would be appreciated. At least define TRANSACTION VALUE. I did email the state and am waiting for a reply.
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
This has been discussed several times in various posts here on the forum. I believe the consensus is that the Transaction amount is the amount of the loan, which presents its own set of issues but that is my understanding.
 

Fred

Elite Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Virgin Islands
Interesting. Over the last month, people claiming to work with the same company as you, have been posting how "ignornant" those of us who post here are. And now you are here asking us to do some research for you. Life is funny.

I will tell you this much. I don't see how a state can define what the federal government has already defined publicly for federal transactions.

Do you have Google?
 

Charles Witt

Senior Member
Joined
Dec 13, 2002
Professional Status
Certified Residential Appraiser
State
Delaware
According to the interpretation from the ASC transaction value is the amount of the loan....
 

Thomas J Kirchmeyer

Sophomore Member
Joined
Apr 29, 2002
Professional Status
Certified Residential Appraiser
State
New York
Steven, I do not know who you are refering to, and no appraisal question is ever 'ignorant' to me. I value input from my peers and I apologize if I have offended you or anyone else with my question. If anyone does not want to 'do some research' for me they don't have to reply. I'm just looking for fresh feedback from folks.
 

The Warrior Monk

Moderator
Staff member
Moderator
Joined
Mar 30, 2005
Professional Status
Certified General Appraiser
State
New York
The definition of transaction value is cut and dry; you can google it.

In regard to your specific question, transaction value would be the loan amount or the sales price (if a purchase). The acceptance of the assignment is thus not contingent on the appraiser's opinion of value.
 

Thomas J Kirchmeyer

Sophomore Member
Joined
Apr 29, 2002
Professional Status
Certified Residential Appraiser
State
New York
Ah, but if the loan amont were not known on a refinance or home equity appraisal, which is often the case, it remains a licensed appraiser's call whether or not to accept the assignment. Often times the loan amount will be determined based on the outcome of the appraisal.
 

Elliott

Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
oxymoron...
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
Ah, but if the loan amont were not known on a refinance or home equity appraisal, which is often the case, it remains a licensed appraiser's call whether or not to accept the assignment. Often times the loan amount will be determined based on the outcome of the appraisal.


And therein lies the issue with Transaction Amounts and appraiser license levels. I would assume you have a certified appraiser in your office that can sign this and the transaction amount becomes a moot issue at that point.
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
Ah, but if the loan amont were not known on a refinance or home equity appraisal, which is often the case, it remains a licensed appraiser's call whether or not to accept the assignment. Often times the loan amount will be determined based on the outcome of the appraisal.
Would it not make sense to look at the cumulative loan value and not just the one transaction?

Logically, the appraiser whose appraisal for $2,000,000 can be used again and again to refinance in a short period. The first mortgage may have been $800,000, the second mortgage $200,000 that the appraiser valued the property at $2,000,000 and then next month the owner goes for a HELOC with another $500,000.

If the HELOC defaults, who is on the hook for the appraised value of $2,000,000 that was used to secure the loan? And would license level be a risk that should never entered into the loan consideration?
 
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