Incomplete purchase contract provided

[residentialguy]

But, if too much of a gap exists

"too much" would be beyond the reasonable price range...no one is talking about that.

 

[J Grant]

But, if too much of a gap exists

"too much" would be beyond the reasonable price range...no one is talking about that.

We are referring to a MVO within the range of value. Too much is 2-5% from the MVO to SC price, (at least that is what Denis and I were discussing

 

[residentialguy]

Keep arguing with Denis...I'm too busy

I'm glad you're always within 2% margin of error and your market only shows less than 2% margin of flux for a reasonable range of value....which would mean you would have to be within 1% and the market within 1%

 

[J Grant]

Res Guy, glad you are busy! I am too, and am sure Denis is, we are debating some fine points and theory of reconciliaiton rather than arguing (at least I hope so)

RG, the problem with your approach and your comments about a 2% margin, is that presumes the 2% is using the SC price as a benchmark of MV. Because if it is not a benchmark, then what is the 2% "off" from?

The problem with letting the SC price drive the MVO point value, is that you stop appraising the property, when you reach the stage of adjusted value, and are instead appraising the Sales contract. You conclude the SC price is within the range, and thus, the SC price represents the best MVO point value, because, it's the sales contract. It is circular reasoning that goes around and around, and missing in action is the appraiser's independent market value opinion.

The appraiser develops an inddependent MVO when it is a refi with no SC, so why do they not do it when a SC price is present? They develop a range of value, and then defer to the SC price to set the actual point value. That is putting a lot of faith into the negotiation between two strangers, who have littile of the training and experience you have.

 

[residentialguy]

I will opine to the SC price, using it in consideration , at times a siginficant consideration, of data .

You're saying the same thing. You might have a narrower range.

 

[J Grant]

It is not a smug or superiror position that my "opinion" is better than the SC price, it is what happens when the report data and market conditions, comps, pendings, and subject quality , ismore compelling support for a point value, then the SC price. That amount of crediblity might be 5% , for example..

Does 5% matter? 5% can be $5000, or $10,000, or $30,000, or $60,000, depending on price ranges. Do those amounts of money matter? They represent the $ amounts your client will be putting down as additional funds to finance the subject.

 

[residentialguy]

It is not a smug or superiror position that my "opinion" is better than the SC price, it is that the market data, comps, pendings, and subject quality , is informing that a MVO developed from that (my MVO), is a more credible indicator than SC price...and that might be 5% more credible.

Does 5% matter? 5% can be $5000, or $10,000, or $30,000, or $60,000, depending on price ranges. Do those amounts of money matter? These are the $ amounts your client will be putting down as additional funds to finance the subject.

You're missing the point...the market has that much flux and you certainly aren't that accurate. That is a reasonable probable price range for a home to sell within. Anything within that range would be as supported as another in that range. And the subject falling within that range is as good as an indicator as you're going to get as far as narrowing down to a point.

 

[J Grant]

You're missing the point...the market has that much flux and you certainly are that accurate. That is a reasonable range for a home to sell within.

Of course there is a reasonable range for a home to sell within. But, our client is asking up to provide the best, most credibly supported point value within that range.

Do you believe that defaulting to the SC price provides a better supported point value, then a point value that takes into acount all the data, comps, report development, and considers the contract price?

Whether or not we allow the SC price to set the point value, it will read as "our" MVO opinion, and have to stand as "accurate" . So, two strangers, who have seen maybe a total of 30 homes in their life, and are negotiating with two personal agendas , have a better handle on MV than you do. Okay....

(PS, how can an opinion be accurate? Accurate compared to what benchmark? Most appraisal verbiage is credible and supported, then they stick in the word accurate on a fannie form.).

 

[residentialguy]

That is a reasonable probable price range for a home to sell within. Anything within that range would be as supported as another in that range. And the subject falling within that range is as good as an indicator as you're going to get as far as narrowing down to a point.

 

[J Grant]

That is a reasonable probable price range for a home to sell within. Anything within that range would be as supported as another in that range. And the subject falling within that range is as good as an indicator as you're going to get as far as narrowing down to a point.

Getting beyond the spin...

"The subject falling within that range is as good an indicator as you are going to get as far as narrowing down a point"...fine, but we still have to narrow down a point. You are saying that anything within that range would be as supported as another...really? Does that hold true in a refi appraisal, or only in a purchase appraisal?

You have an adjusted range of value, from 400 k to 450k. So now you are telling me that a value of 405k is just as credible as a value of 445k for the same property? That amount of spread would be a big amount for a buyer to come up with, agreed? Might make a big difference whether or not a seller would accept an offer.

When no purchase price is present, and your range is 400-450 k on a refi, where do you derive your point value from?