Dictionary Of Real Estate Appraisal, 4th Ed

[Claude From NY]

While I'm waiting for my copy & CD to arrive, anyone have the verbatim definition from the 4th edition? Thanks.

 

[Otis Key]

Hey Claude - since you've ordered it have you thought about going to the AI website and looking for the new def?

 

[Jerry Bone Jr]

I've got "The Appraisal of Real Estate", Ninth Edition. If you would like, I could type in it's definition.

 

[Claude From NY]

Jerry- Thanks anyway for the offer. But it's this specific def. I'm looking for.

Otis- Yea, I searched that website up-n-down but didn't find it mentioned anywhere.

 

[Otis Key]

Sorry I wan't much better help

 

[Terrel L. Shields]

There are numerous definitions of Market Value. My favorite is gone from the 12th edition (of The Appraisal of Real Estate). Found in the 10th as follows:

"The value or distribution of values inferred [tls-actually it reads inferrred in the text] by a competent observer from sufficient patterns of clearly understood, correctly reported, representative, and uncompelled [tls-not a word in my dictionary] transactions found in an adequate market which is either identical or sufficiently congruent to the market in which the property will be traded."..from Jared Shlaes, The Market in Market Value, Appraisal Journal, Oct 1984

Also, from Blacks Law Dictionary "The point at which supply and demand intersect."

 

[Austin]

I don't think there is any such thing as "The Definition of Market Value." MV can be defined any number of ways depending on the situation. I have run into definitions labeled "actual cash value" or "fair value" or "market value subject to existing financing" "post or ante dated value" etc. Even if there were a universal definition there are nuances such as fast sale or value given a specified marketing time. That is why the first step in the appraisal process is to define the definition of MV to be used. I was hired by a law firm once to appraise the "actual cash value" of a warehouse damaged by heavy rain. We spent two weeks determining what "actual cash value meant." They sent me a 15 page discussion from American Law Review on the subject written by a judge discussing the aspects of MV and we finally figured out what it meant.

 

[Mike Garrett RAA]

So what is wrong with the one in USPAP?

 

[Fred]

Mike,
There is nothing "wrong" with it per se, but it just might not be right enough. It's a vague and general explanation market value in the abstract that says there are "specific conditions set forth in the definition of the term identified by the appraiser as applicable to the assignment." The ASB does not set forth those "specific conditions."

 

[Austin]

Quotes from 2004 USPAP concerning market value from page 3 lines 109-122:

Appraisers are cautioned to identify the exact definition of market value, and its authority, applicable in each appraisal assignment for the purpose of market value. lines 121-122
MARKET VALUE: a type of value, stated as an opinion that presumes the transfer of property….. lines 109-108.

I think they put that market value statement under definitions in USPAP about three years ago. I had two MAI’s, one our state appraisal board chairman and one the AI’s USPAP instructor tell the classes they were teaching within a week period that there was a new definition of market value in the new edition of USPAP that changed the entire scope of appraising and we had to spend extra class time absorbing the new definition into our thinking. I told them both a new definition of MV in USPAP was impossible and that what that definition meant was a explanation of general concepts concerning market value and was told in no uncertain terms I was wrong. About a half hour after telling me I was wrong, the AI’s USPAP instructor was reading some passages that explained that the new definition of MV in the definitions section was not a definition but an explanation of the concepts involving market value.
The next time I took the USPAP class, this time from the MAI that was the former state board chairman, last October, I got a personal clarification. Apparently he had been reading this forum and had heard me tell this story. The first thing he did was look at me and then explained how he had been mislead by the wording of USPAP and what he meant was not that there was a new definition of MV but that under definitions of MV in USPAP there was a different, as opposed to new, explanation of the concept of market value. He misunderstood this distinction. More people read this stuff than you can imagine.