Definition of market value

[Mark Sargent]

I do not want to expose my ignorance but i have been asked to appraiser a proposed construction duplex for a small credit union and in the scope of work it states to use the market value definition"
Real Estate Appraisal Final Rule of the Comptroller of the Currency (12CFR https://www.federalregister.gov/art...ency-appraisal-and-evaluation-guidelines#h-61)."

I was not sure if it would be a different market value than the Fannie Mae stated market definition and was curios to see the definition to complete the report, so tried to read the guidelines and for the life of me I can't even find the definition to compare if it is a different definition or not.

The guidelines are in my opinion written in typical government fashion where they tell you to refer to a section by a certain name but the section is named something else, close but it isn't the same, kind of like the FHA guidelines where there rules for a certain thing are in about 5 different places and sometimes contradictory

I read in this publication about the tax value but for the life of me i could not locate the definition. All I could find was the definition of market value is "based upon the definition of market value set forth in the appraisal regulations"

Maybe I am too tired and working on a Holiday but I can't find the Appraisal Regulations section in this frickin publication nor the definition of market value set forth. I was hoping some erudite appraiser on this forum could point me in the right direction without the typical looking down the nose attitude i read a lot in here.

 

[Trihard]

Anytime you don't understand what is said in an engagement letter you should contact the client and have them clear up anything you don't understand.

 

[glenn walker]

I do not want to expose my ignorance but i have been asked to appraiser a proposed construction duplex for a small credit union and in the scope of work it states to use the market value definition"
Real Estate Appraisal Final Rule of the Comptroller of the Currency (12CFR https://www.federalregister.gov/art...ency-appraisal-and-evaluation-guidelines#h-61)."

I was not sure if it would be a different market value than the Fannie Mae stated market definition and was curios to see the definition to complete the report, so tried to read the guidelines and for the life of me I can't even find the definition to compare if it is a different definition or not.

The guidelines are in my opinion written in typical government fashion where they tell you to refer to a section by a certain name but the section is named something else, close but it isn't the same, kind of like the FHA guidelines where there rules for a certain thing are in about 5 different places and sometimes contradictory

I read in this publication about the tax value but for the life of me i could not locate the definition. All I could find was the definition of market value is "based upon the definition of market value set forth in the appraisal regulations"

Maybe I am too tired and working on a Holiday but I can't find the Appraisal Regulations section in this frickin publication nor the definition of market value set forth. I was hoping some erudite appraiser on this forum could point me in the right direction without the typical looking down the nose attitude i read a lot in here.

Its for lending so you use the same definition Fannie Mae Certification uses, Typically only IRS Gifts and Donations and a few agencies use a different definition, but its really just word salad as it does not change your opinion of value.

 

[glenn walker]

Note A Credit Union is a FRT Transaction on loan purposes even if they dont sell the loan to Fannie Mae. Dont over-think it you will just get a headache.

 

[Dublin ohio]

This is what is in the document you provided link to

Market Value—As defined in the Agencies' appraisal regulations, 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 are the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

• Buyer and seller are typically motivated;
• Both parties are well informed or well advised, and acting in what they consider their own best interests;
• A reasonable time is allowed for exposure in the open market;
• Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
• 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.

 

[glenn walker]

IRS Fair market value vs. typical market value: What's the difference? FMV is a hypothetical value—it is determined based on the estimated amount a buyer and seller would likely agree upon under “normal” conditions. *** Market value, used by lenders by contrast, is the price at which a property will actually bring or sell for in a open market.

 

[George Hatch]

The GSEs use the same definition of MV as the FRTs. You can include a blurb showing both sources as references for the definition so the clerk reviewing your report won't get confused but it won't change anything.

 

[Mark Sargent]

The GSEs use the same definition of MV as the FRTs. You can include a blurb showing both sources as references for the definition so the clerk reviewing your report won't get confused but it won't change anything.

Thanks that 's what i did just to be sure because talking with the review appraiser she sounded very punctilios

 

[sputnam]

Read the two definitions side by side. If they aren't the same, then you will need to write the definition that you use into your report along with citing the source of the definition. As a practical matter, it will probably make absolutely no difference to your valuation.

 

[George Hatch]

The conventional wisdom regarding the USPAP requirement to cite the source of the definition of value as that issue applies to the GSE forms (which don't explicitly cite their reference) is that the reference is the form itself. Expediency. It's not going to hurt anyone to include an additional clarification for the reference somewhere else in the report. I never did when using the GSE forms, but I would have had I run into a reviewer who demanded it.