Market and 90 Day Values.

[David S]

Got an assignment this morning: Lender require market and 90 Day Values. What is 90 Day value? And how to do it? Thanks!

 

[J Grant]

Got an assignment this morning: Lender require market and 90 Day Values. What is 90 Day value? And how to do it? Thanks!

Market value is defined as a reasonable market exposure estimate. What is it in the area ?

A 90-day value means the most probable price within 90 days or less. That means you provide 2 value opinions. They may differ from each other, or they may be the same, if 90 days is a typical marketing time - I usually provide a range for market value estimate of exposure, like 60-990 days or 100-140 days, etc. (whatever it is the average for similar house )

 

[David S]

Market value is defined as a reasonable market exposure estimate. What is it in the area ?

A 90-day value means the most probable price within 90 days or less. That means you provide 2 value opinions. They may differ from each other, or they may be the same, if 90 days is a typical marketing time - I usually provide a range for market value estimate of exposure, like 60-990 days or 100-140 days, etc. (whatever it is the average for similar house )

Thanks! Current market value is we are always doing for every 1004, right? But 90-day value means the market value in Aug or Sept this year? OR project what the market value will be for the next 90 days? Like how much it might be in Feb or March, 2024? By the way this is 2055 assignment. Thanks!

 

[J Grant]

Thanks! Current market value is we are always doing for every 1004, right? But 90-day value means the market value in Aug or Sept this year? OR project what the market value will be for the next 90 days? Like how much it might be in Feb or March, 2024? By the way this is 2055 assignment. Thanks!

check with your client, but normally 90 days market value is what is your opinion of market value if the subject must be sold within 90 days ( a 90 day or less market exposure ).

Whereas market value has no client imposed estimate of days on the market; the appraiser generates their own estimate of what reasonable marketing exposure time is to achieve their X $ value opinion.

 

[David S]

OK. That means next 90 days future value. So for the comps selection, just use normal 1004 form requirements, right? Also, need 2 pending / active comps for this? Normally we just use 1 pending / active comp for 1004 is enough.

 

[George Hatch]

It doesn't mean future value. It means what the value be today if the exposure time for the sale is limited to 90 days.

If your opinion of exposure time would normally have been "less than 30 days" then that fits within the no-more-than-90-day exposure limitation. If your opinion of exposure time would normally have been 180-240 days then a more abbreviated exposure time would likely require a discount in order to get it done. Depending on what the market conditions are like at the moment, the value for a sale with normal exposure can be the same as a sale with a 90-day maximum limitation. Or if market is slower than a 90day exposure time the latter might be a different value.

A request involving an arbitrarily limited exposure time isn't operating off the definition of MV that most mortgage lending appraisals is using. Limited exposure times usually fall under the definition of "disposition value" or in more extreme limitations, as "liquidation value".

 

[J Grant]

OK. That means next 90 days future value. So for the comps selection, just use normal 1004 form requirements, right? Also, need 2 pending / active comps for this? Normally we just use 1 pending / active comp for 1004 is enough.

NO!!!!!!

You are giving TWO value opinions for the SAME, AS OF effective date. The only difference between the two opioninsis that the first opinion of market value is whatever reasonable expxsure to teh market to get the value opinion price is ( 30- 60 days or 100-150 days, idk, whatever the average is ) AND the second opinion as of the SAME effective ate, if the subject must sell in 90 days or less.

IT could be both opinions of value are the same( both are $300,000 for example )or they could be different - ( one is 300,000, the other is $290,000) but you still must provide two opinions of value, one with a reasonable estimate of days on market, as you usually do, and the second opinion with the 90-day client imposed market exposure of 90 days or less. Normally we do not provide a second set of comps, there might or might not be a discount off the price to sell in 90 days or less. rd

 

[glenn walker]

In almost all of CA a listing is sold in less than 30 days one value will do it or two at the same value.
I would ask client if they want two separate values "my guess is no " but in SO CA both values would be the same as of today . A 90 days listing today on market before it sold would most often indicate it was over priced. Note: UNLESS THIS IS A UNIQUE OR CUSTOM HOME I am talking about cookie-cutters only.

 

[David S]

Thanks! But why need 2 pending / active comps for this?

 

[J Grant]

Thanks! But why need 2 pending / active comps for this?

that might be a client request,t suh as on an REO addendum, or it could just be a client request to include them to get a more current feel for the market.