Is the term 'price point' value a dangerous term.

[glenn walker]

In real estate litigation you never want to be too precise or show you think your that good.

My experience is usually someone is more pissed about a insignificant number than a large one. I should be able to defend a $20,000 below contract value if nothing in my comparables after being adjusted falls within the low to high range but not if within.

But that $2 or $5k below is hardly supportable in any circumstances at today's prices. Yes in 1980 when we had $50,000 homes but today out here those are 1% deviations off the mean.

 

[Terrel L. Shields]

Maybe not terribly wrong, but its entered into the system by agents that are not disinterested 3rd parties.

Here, manufactured housing is the pits in the MLS. I just looked up everything listed under Mobile, Double Wide and Manufactured in the MLS. 1 sale came up.
So, I had run the sales from the assessor's site and had about 10 in the county in the size and age range I was looking. So, I went back to the MLS and ran the addresses... I found all but two has sold via Realtor and was in the MLS as "one-story" houses.

 

[glenn walker]

Here, manufactured housing is the pits in the MLS. I just looked up everything listed under Mobile, Double Wide and Manufactured in the MLS. 1 sale came up.
So, I had run the sales from the assessor's site and had about 10 in the county in the size and age range I was looking. So, I went back to the MLS and ran the addresses... I found all but two has sold via Realtor and was in the MLS as "one-story" houses.

Yeah the Realtors do that out here sometimes on things so i would run everything to see what pops up.

 

[glenn walker]

The least dangerious debtor is often the guy that owes you big money because both you and that guy knows you need him to be alive and generate income or to rob someone else to pay you back.

it's the guy who owes you a few thousand and he's dead broke and his dog bit him and his woman ran off with another man. He's the one that may be desperate enough to hurt or even kill you.

 

[glenn walker]

The Purchase Contract Price is often called the Bulls Eye or Target Price to the non professional or skippy.

I once had a newer guy who asked me why a sales price and contract was given to analyse if they wanted a unbiased opinion of what the property was worth ? I stopped and said Son that's kinda why we let folks vote for one of two candidates to be President, if it mattered they probably wouldn't let you vote.

That's kinda like a Purchase Contract and that Sales Price. If it didn't matter they wouldn't let you ever see it- and that creates another problem, which they solved because research and extensive studies have proven once you place a Number $ tied to a dollar amount in your brain can't unstick it.

So you will try to be unbiased but your brain keeps saying I'm going to be the bad guy when the buyers the sellers and the two Realtors being 5 or 6 people all agree on the price--but you think it's too high and not true market value and just a price.

Now you're final obstacle, and this is your only client who pays full fees and if you upset them your sure to be on their double secret do not use list. You realize the mortgage and trophy wifes car loan is coming due and she's giving you the evil eye for quitting your real job to play being a evaluator as she calls you in broken english. Now in Summary I have no idea what else to say to you, because I'm not very good at all these weird situations, we get into, so just do your best and make sure too keep everyone happy.
Remember a happy trophy wife think's value is money and she needs a lot of it to pay the prices for her fine wines and jewelry.

 

[Surf Cat]

The Purchase Contract Price is often called the Bulls Eye or Target Price to the non professional or skippy.

I once had a newer guy who asked me why a sales price and contract was given to analyse if they wanted a unbiased opinion of what the property was worth ? I stopped and said Son that's kinda why we let folks vote for one of two candidates to be President, if it mattered they probably wouldn't let you vote.

That's kinda like a Purchase Contract and that Sales Price. If it didn't matter they wouldn't let you ever see it- and that creates another problem, which they solved because research and extensive studies have proven once you place a Number $ tied to a dollar amount in your brain can't unstick it.

So you will try to be unbiased but your brain keeps saying I'm going to be the bad guy when the buyers the sellers and the two Realtors being 5 or 6 people all agree on the price--but you think it's too high and not true market value and just a price.

Now you're final obstacle, and this is your only client who pays full fees and if you upset them your sure to be on their double secret do not use list. You realize the mortgage and trophy wifes car loan is coming due and she's giving you the evil eye for quitting your real job to play being a evaluator as she calls you in broken english. Now in Summary I have no idea what else to say to you, because I'm not very good at all these weird situations, we get into, so just do your best and make sure too keep everyone happy.
Remember a happy trophy wife think's value is money and she needs a lot of it to pay the prices for her fine wines and jewelry.

Sounds like you've had a couple fills of the highball glass over there.... Nevertheless, it's going to send J over the edge.

 

[Tom D]

I once had a newer guy who asked me why a sales price and contract was given to analyse if they wanted a unbiased opinion of what the property was worth ?

So you will try to be unbiased but your brain keeps saying I'm going to be the bad guy when the buyers the sellers and the two Realtors being 5 or 6 people all agree on the price--but you think it's too high and not true market value and just a price.

Glen, i think we are making too much ado about contract bias. For the adults here, that's like giving into your kids every time they asked you for something. The contract is a starting point, not the conclusion. When i look at the sp or i ask the owner what they would sell their house for (oh, bad me) i look to see if there are homes in that range. If there are sim homes in the sale price range, then it is a reasonable sale price. Why waste my time looking at sales that really wouldn't be relevant. I'm not concerned about the low or high price look at, The definition is, does the sale price or value look reasonable and supportive. And by the way, it is always possible to come in lower, conservative bias.

I'm not also concerned about perfection price point. I'm assuming the lender wants me to prevent price fraud.

 

[sputnam]

It is not about the word it is about the concept, and some appraisers ( are you one? ) have the concept WRONG.

I agree. So many people get hung up on the words. We still have appraisers... and many others... that somehow think that not including the finished basement in GLA somehow devalues the property. It is the same house... the same concept... no matter what you call it. Focus on words rather than the objects or concepts is a lot of what the current concern with bias is based on. Focus on words instead of the reality behind the words, in my opinion, obfuscates rather than enlightens.

 

[J Grant]

Glen, i think we are making too much ado about contract bias. For the adults here, that's like giving into your kids every time they asked you for something. The contract is a starting point, not the conclusion. When i look at the sp or i ask the owner what they would sell their house for (oh, bad me) i look to see if there are homes in that range. If there are sim homes in the sale price range, then it is a reasonable sale price. Why waste my time looking at sales that really wouldn't be relevant. I'm not concerned about the low or high price look at, The definition is, does the sale price or value look reasonable and supportive. The definition is, does the sale price or value look reasonable and supportive And by the way, it is always possible to come in lower, conservative bias.

I'm not also concerned about perfection price point. I'm assuming the lender wants me to prevent price fraud.

Per the above, you search by sale price and stop your search if you find enough sales of similar price ?

What if the subject property MV is more, or less than the SC price- we can not know that if we never look at what similar sf and type sales are out there without a price filter.

I do search by sale price; however, it is the last search I do, to make sure I did not miss a comp. We are supposed to search for properties of similar sf and characteristics to the subject - and that might reveal sales both lower or higher in price. A low or high outlier is not a comp, but other sales in either a lower or higher range can be a comp . Do they have better or worse features that need adjusting? The sales with fewer adjustments are typically the best comps -

The definition is, does the sale price or value look reasonable and supportive

The definition of WHAT?? Where is a definition in USPAP or on the form that states or asks if the sale price or value looks reasonable and supportive?
Their sale price is their sale price- it is what they negotiated.

WRT your next to last sentence -And by the way, it is always possible to come in lower, conservative bias.
?? Coming in "lower" that a SC is not about having a lower, conservative bias !! It is that was the credibly supported MV - per the appraisal. I did not decide out of some kind of bias, the market indicated that was the $MV. Their sale price is HIGHER than our appraisal market value - we do not come in LOWER ! This is about concept

There is no such thing as a "perfect price point. " THIS is why we should not start changing the USPAP language - the language is Point value, NOT price point !! And USPAP says perfection is not possible. We are not guestimating a perfect price - I hope that is understood - understand it and it sets you free to pursue the MV as the appraisal steps reveal it-

 

[J Grant]

I agree. So many people get hung up on the words. We still have appraisers... and many others... that somehow think that not including the finished basement in GLA somehow devalues the property. It is the same house... the same concept... no matter what you call it. Focus on words rather than the objects or concepts is a lot of what the current concern with bias is based on. Focus on words instead of the reality behind the words, in my opinion, obfuscates rather than enlightens.

See my post 69 - while you agree with me that it is about the concept, the problem is that appraisers who do not understand the concept then start using the wrong words !! Which is a tremendous problem in appraising. In appraising, the USPAP terminology matters because the terminology drives the concepts.

The old school cert gens did not need college and were grandfathered in, but now it needs college, and res apprising needs college or an equivalent in some humanities courses (philosophy, debate, literature ). IT is popular to scoff at the humanities, but they teach critical and conceptual thinking. More technical classes in a subject, such as more appraisal classes, do not teach that kind of thinking. This is why, prior to medical school or law school, there is a requirement for a college degree that includes some humanities courses. If it were just about the technical side, then an 18-year-old could go to law school or medical school and get a law degree or MD faster. But those professions run on critical thinking and understanding the professional ethics -

Because they do not understand the concepts behind an opinion of MV in appraising, we see some with confulted thinking inventing definitions and terms - a "perfect price point", "priced point value" adn so on. Perhaps others do understand the concept, but the business side of appraising turned their heads around.

I agree that concept is king ( and ethics Queen) but in a profession like law or appraisal, the professional standard terminology drives the development - and the URAR warens about sustiting other definitions for a reason-_