MV opinion vs a price estimate

[JeffSH]

My/our price opinion is $____. Tell me what happens...

You've never done a private appraisal with a pricing narrative? ROFL!

 

[J Grant]

Again. More semantics. The person ordering the appraisal review doesn't give a crap about the concept of value. They want to know whether or not the original appraiser provided them with a reasonable price for sale.

FIne, but that is their concern, our concern is out profession doing what we said we did, and if our appraisal ends up in a review we better be a bit concerned, and if we do review work, we need to do it per what the assignment purpose is not what the lender cares about. A client ordering a review can actually care about the value, a disgrungled investor who bought a portfolio of loans or a reviewer who flagged a report in audit etc.

 

[alebrewer]

A price and a market value opinion can be the same numerical dollar amount - but they are not the same THING.

Basic logic... if A = $100, and B = $100, then by definition, A=B. It's called the transitive property of equality.

 

[J Grant]

You've never done a private appraisal with a pricing narrative? ROFL!

What difference does it make ? How did you express your value opinion in the pricing narrative portion?

We are supposed to do what we said we did...

 

[Charles West]

I didn't read all the posts but will stumble in with this. Price has a transactional quality to it that implies either an asking price or a paid price. In both cases a narrow band of individuals are involved, just a single buyer and a single seller. Market value as used in a appraisal report reflects an opinion of value that appeals to the broadest pie slice of buyers in that micro market.

 

[alebrewer]

Market value as used in a appraisal report reflects an opinion of value that appeals to the broadest pie slice of buyers in that micro market.

Is it possible that the definition of MV does NOT apply to 'the broadest pie slice of buyers in that micro market'? From the definition: "...the buyer and seller, each acting prudently..." To me it infers a single buyer and single seller. You see it differently?

 

[J Grant]

Basic logic... if A = $100, and B = $100, then by definition, A=B. It's called the transitive property of equality.

Not necessarily - the math is the same, but the things themselves are not the same...

A pound of apples and a pound of oranges both weigh the same (math ) but they are still different things. And a pound of solid gold ingot sure has a different value then a pound of apples...
If A is a low quality gem but someone paid $100 for it, and B is a high quality gem and someone paid $100, the math is the same but not the values ...

 

[JeffSH]

FIne, but that is their concern, our concern is out profession doing what we said we did, and if our appraisal ends up in a review we better be a bit concerned, and if we do review work, we need to do it per what the assignment purpose is not what the lender cares about. A client ordering a review can actually care about the value, a disgrungled investor who bought a portfolio of loans or a reviewer who flagged a report in audit etc.

If a client cares about the value, then they care about the price. Because value is a price

How did you express your value opinion in the pricing narrative portion?

When someone approaches me for a private appraisal asking how much they should sell for, I include a narrative about the market conditions, list prices, and how the property should expect to be listed. Our opinion of value comes with an exposure time, I just go into more detail using sale price to list price ratios. "Homes in the market are selling quickly. Based on the current conditions, a list price of $X would produce a market value sale in under 30 days."

 

[alebrewer]

Not necessarily - the math is the same, but the things themselves are not the same...

A pound of apples and a pound of oranges both weigh the same (math ) but they are still different things. And a pound of solid gold ingot sure has a different value then a pound of apples...
If A is a low quality gem but someone paid $100 for it, and B is a high quality gem and someone paid $100, the math is the same but not the values ...

The analogy was not of different things, J. $100 is $100. You can call it price, or you can call it MV. Either way, it's $100. Think of it this way - cash is the same as dollars, no? BTW - you never answered my question about how an appraiser's EMV is measured. Is it not measured against the PRICE the property sells for?

 

[alebrewer]

Free your mind, J. You're too intent on putting everything in a different box. Not sure if ganja is legal in FL, but a trip to CO might be in order...