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

[Mark K]

That's now what the court said.

Legal precedent means nothing to some people. They likely don't understand the concept, like other concepts that escape them.

 

[Terrel L. Shields]

Typically motivated buyer

No one can define a "motivated" buyer, and it implies someone with a bias towards buying. A motivated seller OTOH suggests someone urgent to sell. Yet, no one would argue that a buyer unwilling to buy nor a homeowner unwilling to sell would be "motivated" to do anything. Kind of catch 22.

 

[glenn walker]

Well the courts used legal precedent for hundreds of years on Slavery and Chattel Property until one day they didn't. Lol

 

[jay trotta]

No one can define a "motivated" buyer, and it implies someone with a bias towards buying. A motivated seller OTOH suggests someone urgent to sell. Yet, no one would argue that a buyer unwilling to buy nor a homeowner unwilling to sell would be "motivated" to do anything. Kind of catch 22.

Kicking a can here; I live in Iowa and got a work transfer (motivation to purchase) plus they're giving a capital incentive (more motivation) IMO- that would be Buyer Motivation.

Your thoughts?

 

[glenn walker]

No one can define a "motivated" buyer, and it implies someone with a bias towards buying. A motivated seller OTOH suggests someone urgent to sell. Yet, no one would argue that a buyer unwilling to buy nor a homeowner unwilling to sell would be "motivated" to do anything. Kind of catch 22.

I know a MAI- RIP who used to make motivation adjustments. I kid you not and him and I got into a heated debate at a real estate symposium in about 1998 where over 250 appraisers and the commercial brokers and lenders were in attendance and I was representing the Commercial Brokers.

I debated how the appraiser had no idea what a typical buyers motivations were and even as a broker i often had no idea as buyers don't want me to know how bad they want somthing and sellers even under distress will look you in they eye and swear they won't go down in price by one dollar.

I stated his motivation adjustments were inviting appraisers too dance through a landmine infested legal trap that was not going to stand up if challenged.

I also had many debates with him about how "value" was purely subjective and all in the eye of the beholder. He actually agreed with me, that the definition of value was flawed and needed changed. The poor soul the stress and his giant ego drove him to drinking and his wife left him and he had a heart attack and died.

 

[glenn walker]

Kicking a can here; I live in Iowa and got a work transfer (motivation to purchase) plus they're giving a capital incentive (more motivation) IMO- that would be Buyer Motivation.

Your thoughts?

Yes that's motivation but i couldn't quantify it anymore more in dollar amounts than I could if your wife had
told you, no we are not buying there but moving to the city her mother lives in . The only motivation that's quantifiable now is unless you obey her the cost for the divorce could be thousands of dollars....lmao

 

[J Grant]

No one can define a "motivated" buyer, and it implies someone with a bias towards buying. A motivated seller OTOH suggests someone urgent to sell. Yet, no one would argue that a buyer unwilling to buy nor a homeowner unwilling to sell would be "motivated" to do anything. Kind of catch 22.

How do you manage to appraise, since you feel that nobody, or no professional standards, can define anything?

A typically motivated buyer and seller are both DEFINED right there in the MV definition !! Different types of MV such as liquidation value refine the terms for what typically motivated means -

After that, appraisers have to use common sense and market experience -

It is common sense that a buyer for a farm has a different set of criteria than a buyer for a luxury condo or a buyer for a family-style tract house. But for each of these different buyers for the types of properties, there is a range of what is typical in their expectations. And sellers compete against sellers of similar properties.

I

 

[Terrel L. Shields]

divorce could be thousands of dollars.

One of the reasons for homelessness or at least a reduction in one's (or both's) standard of living is divorce... Although I would say job loss would be #1, drug abuse #2. And often, as appraisers, we do not know why the appraisal is happening. Short of money? Pre-planning a split and not willing to show their hand to either the bank or appraiser? Just get cheaper rates or incorporate credit card debts? I knew a couple who consolidated their debts and saved several hundred per month. But quickly ran the cards back up just as 2008 hit and refinancing was off the table. They lost their house, his classic Corvette (Anniversary model), and became renters and both working thru it all.

The reasons people sell vary wildly and we rarely know their motivations. My brother owned 2 homes - one here and one in Joplin. So, when he retired, he moved full time to Joplin and sold his house to my niece for the payoff on the Joplin property which was about half the market value. The niece and hubby sold their town home quickly to make the move. Both transactions were "below market". So, when they went to refi to update the house the moron appraiser (who fancied himself a horse trainer too) appraised the property way low.... anchor biased by the artificial low price. My niece never thought to tell the idiot that the "price" had nothing to do with the VALUE of the home. When she tried to get the bank to reconsider, they refused even though it was the bank my bro had worked for. I told them to switch banks. As for the moron appraiser, he ignored a nigh identical house that sold for $70,000 more only 2 miles away (in rural area.) The same builder, size, and design to pick town comps of older houses. He got fired from the bank vendor list later and well, his horse training business flopped too.

 

[jay trotta]

Yes that's motivation but i couldn't quantify it anymore more in dollar amounts than I could if your wife had
told you, no we are not buying there but moving to the city her mother lives in . The only motivation that's quantifiable now is unless you obey her the cost for the divorce could be thousands of dollars....lmao

Ahhhhh, she would just become a capital expenditure......

 

[J Grant]

No one can define a "motivated" buyer, and it implies someone with a bias towards buying. A motivated seller OTOH suggests someone urgent to sell. Yet, no one would argue that a buyer unwilling to buy nor a homeowner unwilling to sell would be "motivated" to do anything. Kind of catch 22.

The word in the MV definition is typically motivated (not just the lone word motivated )
And what is typical can be seen in how the predominant set of buyers for X type of property behave in a given market cycle - those paying substantially more or less or making deals at odd terms are not typical - same for the sellers.