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Final reconciliation of the appraisal - how consistent are you?

Terrel L. Shields

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Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Do you think this type of training would be helpful for appraisers?
If it is truly unconscious then how could an appraiser, or anyone else for that matter, be aware of it even with training. Therefore, it is a conscious bias but one not easily recognized.
 

J Grant

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Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
LIke JTip, I would go with 305K. Nobody is that good.
Please see my post 18, - appraisers are hired to be "that good". It is $5000, not $50 ! If we want to reconcile to 305 k then own it and be good enough to do it well supported.
 

CGinMN

Sophomore Member
Joined
May 20, 2011
Professional Status
Certified General Appraiser
State
Minnesota
If it is truly unconscious then how could an appraiser, or anyone else for that matter, be aware of it even with training. Therefore, it is a conscious bias but one not easily recognized.
I don’t know. I’m not claiming any knowledge in the field or training. Click the links? Ask Carnivore who seems to have read into it?
 

Jeffrey Hilborn

Freshman Member
Joined
Sep 19, 2015
Professional Status
Certified Residential Appraiser
State
Nebraska
After all that, your adjusted range is from $295k-$300k. A $305k contract price exceeds the upper limit of your adjusted range of your comparables by 2.5%.

However you normally handle that situation, do you do that the same way every time or do you handle it one way under certain circumstances and another way under other circumstances?

The low-end, racially diverse markets are the one's that appreciate the most here.

In this situation I do my very best to use reasonable adjustments that support contract price. If homes are selling quickly at or above list price, then I'll rarely come in low. If every home has multiple offers regardless of the property characteristics, then the adjustments should reflect thatm.

Sometimes my best comps have long marketing times or if the subject is a low-end property with lesser support. This is less common, but I have no problem not supporting contract price.

****, when a realtor prices a property too low I have no problem coming in 5-10% high and explaining that the subject wasn't marketed correctly. From my conversations with realtors, this is extremely rare and most appraisers just come in at sale price no matter what.

I hate the talk about racial bias in real estate. Maybe it's because I'm much younger than the average appraiser but I don't see how racial demographics or the race of the owner/seller has anything to do with analyzing the market and the subject property. I don't see how redlining is possible in 2020 (having worked for a bank) but people say it still exists.
 

George Hatch

Thread Starter
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Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
I don't see how an appraiser who is engaging in this kind of prohibited conduct can get away with submitting such appraisals to multiple lenders over any length of time, including prevailing in all the ROVs such appraisals could be expected to trigger.

But if they are doing dastardly deeds without ever getting caught then that doesn't happen without the problem extending far beyond the original appraiser.
 

Digger88

Elite Member
Joined
May 11, 2010
Professional Status
Certified Residential Appraiser
State
Virginia
LIke JTip, I would go with 305K. Nobody is that good.

i love jtip but thats an obvious push to come in higher than your comps. just find another superior comp that adjusts downward.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
I don't see how an appraiser who is engaging in this kind of prohibited conduct can get away with submitting such appraisals to multiple lenders over any length of time, including prevailing in all the ROVs such appraisals could be expected to trigger.

But if they are doing dastardly deeds without ever getting caught then that doesn't happen without the problem extending far beyond the original appraiser.
What reports are found of an allegedly appraisal beyond the one example, and we don't even know if it was simply a case of bad/incompetent work. And lousy as it would be one appraiser did perform a biased appraisal out the 80,0000 aprox licensed , on what basis is an assumption have merit that it extends beyond the one?
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
The low-end, racially diverse markets are the one's that appreciate the most here.

In this situation I do my very best to use reasonable adjustments that support contract price. If homes are selling quickly at or above list price, then I'll rarely come in low. If every home has multiple offers regardless of the property characteristics, then the adjustments should reflect thatm.

Sometimes my best comps have long marketing times or if the subject is a low-end property with lesser support. This is less common, but I have no problem not supporting contract price.

****, when a realtor prices a property too low I have no problem coming in 5-10% high and explaining that the subject wasn't marketed correctly. From my conversations with realtors, this is extremely rare and most appraisers just come in at sale price no matter what.

I hate the talk about racial bias in real estate. Maybe it's because I'm much younger than the average appraiser but I don't see how racial demographics or the race of the owner/seller has anything to do with analyzing the market and the subject property. I don't see how redlining is possible in 2020 (having worked for a bank) but people say it still exists.
I debated whether to respond ... but I have done a lot of reviewing post crash so have a perspective from that and was lucky enough to have had good training so-)

In this situation I do my very best to use reasonable adjustments that support contract price.

We don't make adjustments to support a contract price - we make adjustments to support our opinion of market value ( we don't appraise to support a CS price either )

If homes are selling quickly at or above list price, then I'll rarely come in low. If every home has multiple offers regardless of the property characteristics, then the adjustments should reflect thatm.

But property characteristics matter - they anchor the value end of characteristics adjustments to reach a Market Value - are you saying your adjustments reflect the multiple offers ?

Sometimes my best comps have long marketing times or if the subject is a low-end property with lesser support. This is less common, but I have no problem not supporting contract price.

Yet another reference to support of contract price..- Which is Backward /flipped - because the CS price provides support for an opinion of market value, not the other way around.
 

Jeffrey Hilborn

Freshman Member
Joined
Sep 19, 2015
Professional Status
Certified Residential Appraiser
State
Nebraska
I debated whether to respond ... but I have done a lot of reviewing post crash so have a perspective from that and was lucky enough to have had good training so-)

In this situation I do my very best to use reasonable adjustments that support contract price.

We don't make adjustments to support a contract price - we make adjustments to support our opinion of market value ( we don't appraise to support a CS price either )

If homes are selling quickly at or above list price, then I'll rarely come in low. If every home has multiple offers regardless of the property characteristics, then the adjustments should reflect thatm.

But property characteristics matter - they anchor the value end of characteristics adjustments to reach a Market Value - are you saying your adjustments reflect the multiple offers ?

Sometimes my best comps have long marketing times or if the subject is a low-end property with lesser support. This is less common, but I have no problem not supporting contract price.

Yet another reference to support of contract price..- Which is Backward /flipped - because the CS price provides support for an opinion of market value, not the other way around.

I'm not the best at explaining things. Don't be so literal

Paired sale analysis, sensitivity analysis, depreciated cost, etc. produces a range of reasonable adjustments. I didn't mean that one should adjust based on the subject's sale price. That's never acceptable. But if my initial analysis produces a tight range that doesn't bracket the contract price, then I will do what I can to bracket sale price depending on the market conditions and the tolerances of my adjustments. Remember, we're talking about $300k vs $305k in an appreciating market.

Of course property characteristics matter, but adjustments vary depending on availability and overall market conditions. When I calculate adjustments using paired sale, sensitivity analysis, depreciated cost, it always produces a range.

If purchase price weren't relevant, then they wouldn't give us contracts and USPAP wouldn't require analyzing the subject history.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Paired sale analysis, sensitivity analysis, depreciated cost, etc. produces a range of reasonable adjustments. I didn't mean that one should adjust based on the subject's sale price. That's never acceptable. But if my initial analysis produces a tight range that doesn't bracket the contract price, then I will do what I can to bracket sale price depending on the market conditions and the tolerances of my adjustments. Remember, we're talking about $300k vs $305k in an appreciating market.

Of course property characteristics matter, but adjustments vary depending on availability and overall market conditions. When I calculate adjustments using paired sale, sensitivity analysis, depreciated cost, it always produces a range.

If purchase price weren't relevant, then they wouldn't give us contracts and USPAP wouldn't require analyzing the subject history.
Paired sale analysis, sensitivity analysis, depreciated cost, etc. produces a range of reasonable adjustments. I didn't mean that one should adjust based on the subject's sale price. That's never acceptable. But if my initial analysis produces a tight range that doesn't bracket the contract price, then I will do what I can to bracket sale price depending on the market conditions and the tolerances of my adjustments.

First sentence: "it is not acceptable to adjust based on the sale price," and then you go on to do that very same thing ! ( play with your adjustments until the final value brackets the sale price. "
That is different than bracketing the sale price with the unadjusted actual prices of sales. BTW it is fine to reconcile at upper end of value or at SC price or above SC as long as it is credibly supported - Idk if changing adjustments till meet the SC price is credible support but at least you own it, rather than saying "nobody is that good ."

Remember, we're talking about $300k vs $305k in an appreciating market.

But value pushing by 5k makes the market appreciate- while it may seem justified in a one off situation, each time it is done it makes the next highest price sold comp. Thus as a pattern, appraisers' decision to help a market in appreciating value direction feeds the acceleration. Pushing each appraisal by 5k over 12 months results in adding 60k a year to prices. .

And If is is "only" 5k, why not let the buyer put it down in their own cash to close the gap ? That also makes the market appreciate, but it comes from the buyer.

If purchase price weren't relevant, then they wouldn't give us contracts and USPAP wouldn't require analyzing the subject history.

A purchase price being relevant is different than shaping the appraisal around hitting the purchase price. The adjusted range was 295k-300k , if you reconcile at 300k, the purchase price was relevant to reconcile at higher end. Searching around for higher sales to change the range...that might be credible in some assignments and not others, it is all theoretical here ...
Of course in the example GH gave we have no information of if higher price sales were other possible comps, we know nothing much except such a tight adjusted range of 295k-300k is pretty rare.
 
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