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Definition of Market Value According to FIRRE?

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Ray Miller

Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
Definition of Market Value According to FIRRE and how do you write comments on where you got your sources for the market value in your appraisal reports????

Reviewer does not want the standard Fannie Mae Definition of Market Value he wants the FIRRE definition. Also wants me to name my sources for makret value in the report.

What are your thoughts on this, good, bad or indifferent????
 

Mztk1

Senior Member
Joined
Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
Market value means the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
(1) Buyer and seller are typically motivated;
(2) Both parties are well informed or well advised, and acting in what they consider their own best interests;
(3) A reasonable time is allowed for exposure in the open market;
(4) Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
(5) The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

[Codified to 12 C.F.R. § 323.2]
 

Ray Miller

Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
Market value means the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
(1) Buyer and seller are typically motivated;
(2) Both parties are well informed or well advised, and acting in what they consider their own best interests;
(3) A reasonable time is allowed for exposure in the open market;
(4) Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
(5) The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

[Codified to 12 C.F.R. § 323.2]


He does not want that. I have that in my report. He wants the FIRRE one and the sources of my market data.
 

nauthead

Senior Member
Joined
Nov 26, 2004
Professional Status
Certified General Appraiser
State
Florida
Doesn't USPAP require that you cite the source of the definition of value?
 

Mztk1

Senior Member
Joined
Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
Isn't that the

The Financial Institutions Reform, Recovery, and Enforcement (FIRRE) Act's definition? Or am I missing something?

The definition I gave is the FIRRE Act's definition.
 

Larboard

Member
Joined
Jun 25, 2003
Professional Status
Certified Residential Appraiser
State
Michigan
There is no definition of Market Value in FIRREA.

The definition that Jim posted is from banking regulations. (CFR = Code of Federal Regulations)

Is this a form report?

Why don't you ask the reviewer for the section of FIRREA containing the definition wanted.

The definition is supposed to be the definition of the value you developed in the report. How can the reviewer tell you that you have the wrong definition. Only you know what definition you were developing to.
 

Fred

Elite Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Virgin Islands
Tell your client you would be glad to use it, as soon as he/she shows you were it is.
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
for FRTs........

see.....FDIC regs........citing Title XI .......see letter (g) under definitions.....


http://www.FDIC.gov/regulations/laws/rules/2000-4300.html#2000part323.2

AUTHORITY: 12 U.S.C. 1818, 1819 ["Seventh" and "Tenth"], and 3331--3352.
SOURCE: The provisions of this Part 323 appear at 55 Fed. Reg. 33888, August 20, 1990, effective September 19, 1990, except as otherwise noted.

§ 323.1 Authority, purpose, and scope.

(a) Authority. This part is issued under <A href="http://www.FDIC.gov/regulations/laws/rules/1000-900.html#1000sec.8a">12 U.S.C. 1818, 1819 ["Seventh" and "Tenth"]

and Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA") (Pub. L. 101--73, 103 Stat. 183, 12 U.S.C. 3331 et seq. (1989)).

(b) Purpose and scope. (1) Title XI provides protection for federal financial and public policy interests in real estate related transactions by requiring real estate appraisals used in connection with federally related transactions to be performed in writing, in accordance with uniform standards, by appraisers whose competency has been demonstrated and whose professional conduct will be subject to effective supervision. This part implements the requirements of title XI and applies to all federally related transactions entered into by the FDIC or by institutions regulated by the FDIC ("regulated institutions").

(g) Market value means the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
(1) Buyer and seller are typically motivated;
(2) Both parties are well informed or well advised, and acting in what they consider their own best interests;
(3) A reasonable time is allowed for exposure in the open market;
(4) Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
(5) The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
 
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