How Precise Do You Need To Be?

[Mark K]

Oh my. i'm sure the cat does not want to be waxed. Probably doesn't really want to be washed either but that is not nearly as bad a being waxed.

Neither one of us really likes it much but we both think its much more enjoyable than some of these endless 'discussions'.

 

[J Grant]

Granted, none of us would have done the same....

But what's the harm???

No real "harm" if the value is well supported. The harm though is that it does make appraiser look silly even if it is a sale contract price, if it is worth $179,600, it is worth $1,380,000 . Though I argue against possible value distortions by large amounts of rounding, rounding off to whole numbers is appropriate, - we are not ringing up items cash register style. If the appraiser got this bizarre number from rote averaging or software, they should have reconciled it better .

If I were a reviewing it and the value was well supported I would have to agree with the value even at the bizarre number, though I might comment it is accepted peer practice to round off to nearest thousand in higher price ranges.

 

[residentialguy]

Granted, none of us would have done the same....

But what's the harm???

Credibility.

 

[ucbruin]

Credibility.

As loath as I am to disagree with you...
If what JG wrote is acceptable and makes sense, which I believe it does....

How would changing the 6 to a zero and/or changing both the 9 and 6 to zeros make the report more credible than the what the original appraiser did?

 

[J Grant]

I actually agree on the credibility issue but for perhaps different reasons. I don't see it the problem per se as being "overly precise", though I understand the argument for it on this example. I see lack of credibility because unless there is an extraordinary reason, it indicates to me rote arriving at a value to match a price or software or averaging result. .

When I wrote no real harm, I mean from a user perspective. If the value is credibly supported in the market, the fact that the $ ends in the $600 is not "harming" the people relying on the appraisal.

 

[Terrel L. Shields]

If I am slightly over the contract price, and the contract price is $1,390,345, then I ask. What is the MOST PROBABLE price the property is going to close for? $1,390,345 or $1,400,000?

 

[Mike Kennedy]

If one has four comparable properties how do they arrive at $1,379,000?

If one understands that a home in this price range is not going to have $1,000 adjustments then they would also understand that you cannot have a final opinion with a significant digit less than what was used in the adjustment process.

If one really thinks about this, let us move the decimal point left two spaces and talk about a house in the $14,000 range. Would anyone with a brain opine to a value of $13,790? Would anyone with a brain make $100 adjustments or $50 adjustments?

I fail to see how some do not get this accepted concept.

Depends on what the Bull$eye is.

 

[Mike Kennedy]

Stepping on the gas finally hit the wall at $1,379,600- This was the appraisers reconciliation ** The sales price of $1,379,600 falls within the range of value hence the sales price is considered market value and that's how I arrived at the $1,379,600 value. Reviewer: why not $1,379,000 or $1,380,000- Simple if I went $1379,000 the buyer would have to come up with $600.00 bucks and the agents would be screaming at me and if I went $1,380,000 the seller would b upset because he left $600.00 on the table.

 

[residentialguy]

Stepping on the gas finally hit the wall at $1,379,600- This was the appraisers reconciliation ** The sales price of $1,379,600 falls within the range of value hence the sales price is considered market value and that's how I arrived at the $1,379,600 value. Reviewer: why not $1,379,000 or $1,380,000- Simple if I went $1379,000 the buyer would have to come up with $600.00 bucks and the agents would be screaming at me and if I went $1,380,000 the seller would b upset because he left $600.00 on the table.

The buyer gets a copy of the report, not the seller. And no realtor with a half a brain would show it to the seller if it appraised over contract.

 

[residentialguy]

Depends on what the Bull$eye is.

Wow, that gets so tiring. Regardless of what you incorrectly think, (and I've buried you before on this issue more than once), the pending sale can be a good indicator of market value, which appraisers are to consider. It's not a bullseye, unless you ignore other market indicators that contradict it.