Distressed Properties were used for all comps!

[residentialguy]

5So if the local market is in decline due to a large number of REO and shorts, I am supposed to artificially inflate the value of my subject? 75% of the market is a very significant segment. The FDIC and the California state board are sanctionng appraisers for doing what you are proposing here. If you want to get a colonoscopy from the FDIC one day, then that is your choice.

No one is inflating anything. The value that you give is the most probable price the homeowner would get if he put it on the market.

And California is not sanctioning anyone doing this. No one is suggesting to state a value of more than what your homeowner could sell his house for.

 

[gregb]

No one is inflating anything. The value that you give is the most probable price the homeowner would get if he put it on the market.

And California is not sanctioning anyone doing this. No one is suggesting to state a value of more than what your homeowner could sell his house for.

Where in the definition of market value does it specify "homeowner" as the seller?

 

[timd354]

No one is inflating anything. The value that you give is the most probable price the homeowner would get if he put it on the market.

And California is not sanctioning anyone doing this. No one is suggesting to state a value of more than what your homeowner could sell his house for.

It is amazing how little understanding that some appraisers have about the typical mortgage lending definition of market value and how that applies to short sales and REOs. I just had an appraisal come across my desk that was done for a purchase transaction of a REO property (typical mortgage transaction) and the appraiser actually made negative adjustments to the comparable sales that were not short sales or REOs because the subject property was a REO sale...absolutely unbelievable.

 

[residentialguy]

Where in the definition of market value does it specify "homeowner" as the seller?

My word,

Where in the world would you get the idea that a lender, who's clients are homeowners and who gave you the conditions of MV, would intend the that the conditions of MV were to cut out all the homeowners from an appraisal? The undue stimulus in market value and stigma can't be ignored or inverted.

It is amazing how little understanding that some appraisers have about the typical mortgage lending definition of market value and how that applies to short sales and REOs. I just had an appraisal come across my desk that was done for a purchase transaction of a REO property (typical mortgage transaction) and the appraiser actually made negative adjustments to the comparable sales that were not short sales or REOs because the subject property was a REO sale...absolutely unbelievable.

Actually, that would be the correct way to do the appraisal incorrectly...meaning if REOs are the market (as Lobo and even Greg seem to imply by his last comment), thus typical homeowners must be treated atypically.

 

[ctapraser]

No, you did not. You said,
If those type of sales dominate the market area then they absolutely should have been used in fact, it would have been wrong NOT to have used them.


That's absolutely false. IT WOULD BE WRONG TO USE THEM (REOS/SSs), if they were not the best comps reflective of market value of a sale with undue stimulus to sell, similar conditon of sale, similar physical condition, no special financing, etc.

May I suggest to Laurie Norman and Lobo fan to just run away....I am begining to see why there are a handfull of posters with like 5,000 posts and almost none with under 100. Seemed like a great site at first and then I see people trying to help get slammed over and over (by the same person it seems),... looks like fun... take some of my time, try and help and then get bashed by some google expert pretending to be all knowing. m2:

 

[DMZwerg]

Thank you all for your responses. I am learning as I undergo this real estate purchase. I almost want an appraiser to go with us before we even put in an offer for a house. I wish that there was a market established for pre-purchase appraisals for the purchasers.

Actually one of the best times to get an appraisal is pre-purchase as it can help a buyer understand the local market, especially if relocating or if a first-time buyer. I have done such in the past. The problem comes in that if the lender plans to try to sell a loan on the secondary market they need to contract an appraiser independently and thus you would likely end up paying for two appraisals. Understand though that when a lender hires an appraisal as part of a loan for a purchase (or refinance, etc), then the lender is the client whereas if you hired an appraiser yourself before tending an offer then you would be the client. Who is the client can affect a number of things including whether the appraiser can discuss the appraisal with you directly as well as what will make up the report (aka, how the local markets are discussed and so forth). Finally, realize that appraisals are opinions and opinions vary and that markets are not static therefore what may have been true today may not be true tomorrow.

Hope that helps!

 

[Webbed Feet]

May I suggest to Laurie Norman and Lobo fan to just run away....I am begining to see why there are a handfull of posters with like 5,000 posts and almost none with under 100. Seemed like a great site at first and then I see people trying to help get slammed over and over (by the same person it seems),... looks like fun... take some of my time, try and help and then get bashed by some google expert pretending to be all knowing. m2:

As "all knowing" as three or four general certified appraisers, all of them very good appraisers to my telling, all posting the same views that the definition of value is not being followed when we start using all distressed sales as comparable simply because there are lots of them? While at the same time intentionally ignoring non-distressed sales that are present in the market place?

 

[ctapraser]

As "all knowing" as three or four general certified appraisers, all of them very good appraisers to my telling, all posting the same views that the definition of value is not being followed when we start using all distressed sales as comparable simply because there are lots of them? While at the same time intentionally ignoring non-distressed sales that are present in the market place?

Nope.. none seem to be General, actualy MOST people here seem to try and help, but there are a few that seem to want everyone to know they know (or think they do) more than everyone else by bashing an appraiser thats just trying to help the OP or make the OP feel like a dip s%&t for asking the question in the first place.

 

[residentialguy]

May I suggest to Laurie Norman and Lobo fan to just run away....I am beginning to see why there are a handful of posters with like 5,000 posts and almost none with under 100. Seemed like a great site at first and then I see people trying to help get slammed over and over (by the same person it seems),... looks like fun... take some of my time, try and help and then get bashed by some google expert pretending to be all knowing. m2:

cta,

Why would you suggest that anyone "run away"? I did not attack them personally. Laurie gave out false information, she came back saying she was saying the same thing I said, which was incorrect and I showed her where and how that was incorrect. Maybe you're happy with appraisers coming here saying things that are wrong, but I'm not. This isn't a Unitarian Church where anything you believe is ok. This is class and we're all teachers and students at the same time. And when I'm wrong, (and I have been countless times) I would hope you have enough concern for our profession and for me to speak up and call me on the carpet. I don't need a bunch of sugar coat. I like appraisers like Webbed because he calls me out on the carpet. Uncomfortable, yes...but I walk away a better appraiser. I take joy in the fact that one day Webbed might make a mistake and I'll be able to drag his feathery body through the streets of the AF

 

[Lobo Fan]

Just trying to get my head wrapped around this thing. I have a neighborhood with 100 closed sales in the past year, and 50 in the past 6 months. Of these, 80% are REO-short with a median sales price of $180,000. The remaining 20% have a median sales price of $200,000. All are similar enough to be included at the top of page 2. Overall the median sales price is $185,000. So rather than accept the $180,000 as the predominant MV, I am supposed to adjust any REO-short up to $200,000? Sounds like a misleading report to me.