Didn't Take High Offer Because Of Mean Old Appraiser

[residentialguy]

double post

 

[residentialguy]

NO!! The language AS OF is not is not the same as ON. The most probable price ( linked to our MVO ) is what the property should transact for AS OF the effective date...as of means the prior sales up to and including the the effective date. The verbiage purposely is "as of", not "on" MV opinin of an appraisal per the MV definition on lending forms s what the subject would sell for on the effective date, the definition of MV is what the property should bring, implicit being a subject consummated sale and passed title (closed) as of the effective date. The subject SOLD on the as of effective date of appraisal, it was not still for sale, getting the highest prices offers up to signature date.

Whether anyone likes it or not, the SCA is based on historic data. . Market condition adjustments (time adjustment) bring the past data sales contact price up to present as of effective date value if market has appreciated or declined.

AS OF this date takes into consideration of all market indicators as of that effective date and the SCA does NOT limit it to historical data. If you don't believe me, click on the option of the sale and you will see closed sale, pending sale and listings. For example: As of today, all the market indicators show that the subject's most probable price is $300,000. The closed sales showed a price range of $315,000 to $335,000, however the trend has been decreasing rapidly due to the 2 major bases of employment (abc co and xyz company) closing down.

So, as you can see by my example above, the closed sales do not support the value at face value. However, the very FIRST adjustment on your SCA is the Time adjustment, which is the variances of the market conditions on the effective date to the market conditions of the date of the comp's sale. The example above shows a decline. It can also show the incline. which many market conditions have in effect now.

So you assertion that "the SCA is based on historic data" is completely incorrect. It is based upon the current conditions at the time of the effective date, albeit using historical data and adjusting them to the market conditions of the current (effective) date.

 

[J Grant]

Okay then, I'll amend my statement to the predominance of support for the SC are the closed sales. Don't believe me...try submitting a lending appraisal with NO closed sales and just pendings and listings. It will be rejected. Whereas an appraisal with all closed sales and no pending/listings ( with explanation such as none found) will be accepted.

Appraisers take into account the listings/pendings and market conditions as of the effective date, but the closed sales are bought current to trends as of eff date by time adjustments. If a market has changed so drastically in recent past weeks such as a natural disaster or massive industry closing in an area it becomes a complex assignment. Many lenders stop lending for a period of time following a natural disaster for that very reason.

 

[Terrel L. Shields]

try submitting a lending appraisal with NO closed sales and just pendings and listings

no USPAP requirement, nothing in USPAP requires three comps. You could use 1. There's a whole new world beyond lenders

 

[residentialguy]

try submitting a lending appraisal with NO closed sales and just pendings and listings.

I never said to not to list closed sales...don't know where that came from. As you finally corrected yourself, those closed sales are to be adjusted to reflect current market conditions. Therefore the SCA is not based solely upon the closed sale prices. If the current housing market is selling above or below the closed historical sales, they must be adjusted to reflect the effective date ...and appraisers that don't do that don't know what they're doing and are giving misleading low appraisal in an increasing market or misleading high appraisals in a decreasing market.