How Comp Adjustments May Be Distorting Appraisals - Corelogic

[bnmappraisal]

They are SALESPEOPLE with a product in search of a market, and one of their markets already has US.

(my bold)

 

[OSU Beavers]

"Appraiser MUST include TWO active or pending comparables in each report". Since those comps have not sold and we do not know how low their final closing price will be, their unadjusted listing prices tend to be HIGHER than the contract price of the subject. Duh!

 

[Michael P Jacobs MAI]

"Appraiser MUST include TWO active or pending comparables in each report". Since those comps have not sold and we do not know how low their final closing price will be, their unadjusted listing prices tend to be HIGHER than the contract price of the subject. Duh!

Here's another great point against Big Appraisal Data ("BAD") - from experience we know it takes a LOT of judgement to discern value-implications from listings/pendings. Yes, they should be higher but aren't always - OREO/distress, unknown attributes, inept representation, etc. We see this in commercial all the time (when the "low" offering is gone you'll be right back to the market). You would literally have to appraise the listing to be certain of what it's saying about the subject property. Oh, I'm all in favor of listings and include them when available and relevant in every report - even restricted appraisal reports. BUT, I can tell you that a machine will have difficulty fulfilling this requirement, where a human being capable of making fine discernment for compensating and/or mitigating factors will provide much more meaningful feedback through the market data. So, will BAD suggest one list of requirements for their model and another for appraisers?

 

[Deleted member 80407]

I have a statement which is in every appraisal:

"Extreme end indicators have been excluded if they do not represent the predominate trends".

High end indicators may not have market support to support the value the property closed at. For this reason, I will test the market against high sale and usually will not find market evidence to support the closing price and therefore, ignore the sale. However, I do let the reader of the report known that I am aware of the high sale and why I am not using it.

 

[Meandering]

So, will BAD suggest one list of requirements for their model and another for appraisers?

But who determines what "bad" is?
Appraisal boards only determine that for appraisals.
Who determines bad, for any valuation that is not an appraisal?
Underwriters? yeah, okay.

How many failed mortgages in the crash did not have appraisals? We'll never know, because they'll never tell.

.

 

[Michael P Jacobs MAI]

But who determines what "bad" is? <SNIP> How many failed mortgages in the crash did not have appraisals? We'll never know, because they'll never tell.

lol I made up "BAD" (Big Appraisal Data) as an acronym to fit my narrative there so sorry 'bout that.

 

[Meandering]

lol I made up "BAD" (Big Appraisal Data) as an acronym to fit my narrative there so sorry 'bout that.

That's okay. I've been dense before.

My mistake for misreading what you posted.

But still, we are all looking at the same data, big or small, as may be appropriate. All lenders need is the ability to say the valuation needs to be within X% of the loan amount, and, that's all that's holding them back - and keeping appraisers working.

 

[Terrel L. Shields]

All lenders need is the ability to say the valuation needs to be within X% of the loan amount

Unfortunately, that would likely become the new anchor price for Realtors to push the limit. 95% becomes 100% becomes 105%.

 

[Amy Perkins]

Revised

 

[Evincere]

They are SALESPEOPLE with a product in search of a market, and one of their markets already has US. They must invalidate us for their valuation model services to survive.

Does that answer your question about what I believe their point is?

You are spot on Mr. Michael. They are on a roll with the recent Fannie concessions. Watch for more cleverly designed Corelogic propaganda intended to whittle away the Appraisers credibility. What they make off of Appraisers who utilize any of their services is mere crumbs compared to the value of the pie.