MV opinion vs a price estimate

[Charles West]

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?

I always thought of it that way. The definition merely refers to a hypothetical transaction and not an actual one.

 

[J Grant]

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



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."

, I recognize the client cares about the price. But not because value is a price ! They care about a price when it is needed to green light a deal or transaction. or agenda they have

Market value does have a relation to price. And an appraiser can care about a price too ! However, that still does not let us wipe out the opinion of market value to say it is an opinion of price - when he stated purpose is provide an opinion of market value

for a client with a private order wanting to ask how much they should sell for, Providing a market value opinion, and then a range of prices that can occur up or down from it, with accompanying days on market for each is a good practice !

 

[JeffSH]

Market value does have a relation to price. And an appraiser can care about a price too ! However, that still does not let us wipe out the opinion of market value to say it is an opinion of price - when he stated purpose is provide an opinion of market value

It's a different way of saying the same thing. We say Market Value because saying Price (assuming prudent and knowledgable sellers, with no undue influence, a reasonable time for exposure....) takes way too long. Market value is a certain price.

Again, we're arguing semantics.

 

[TerryRohrer]

https://www.appraisalinstitute.org/assets/1/29/TAJ_Sum18_206-218_Feat3-MarketValue_ForWeb.pdf

 

[George Hatch]

, I recognize the client cares about the price. But not because value is a price ! They care about a price when it is needed to green light a deal or transaction. or agenda they have

Market value does have a relation to price. And an appraiser can care about a price too ! However, that still does not let us wipe out the opinion of market value to say it is an opinion of price - when he stated purpose is provide an opinion of market value

for a client with a private order wanting to ask how much they should sell for, Providing a market value opinion, and then a range of prices that can occur up or down from it, with accompanying days on market for each is a good practice !

Market value doesn't just have a relation to price; market value is a price. Specifically a "most probable price".

Please do us all a favor and start qualifying what type of price you're referring to rather than just imply that "price" can only be interpreted as a generic. Contract price? Sales Price? List Price? Manufacturer's Suggested Price? Black Friday Discount Price? Probable Price?

I reckon once you pin down the context you're using "price" it will make this entire thread look like a giant waste of time.

 

[J Grant]

Market value doesn't just have a relation to price; market value is a price. Specifically a "most probable price".

Please do us all a favor and start qualifying what type of price you're referring to rather than just imply that "price" can only be interpreted as a generic. Contract price? Sales Price? List Price? Manufacturer's Suggested Price? Black Friday Discount Price? Probable Price?

I reckon once you pin down the context you're using "price" it will make this entire thread look like a giant waste of time.

To answer why PRCE AND MARKET VALUE ARE NOT THE SAME -An opinion of market value is a perspective on price, whereas a price is the actual $ amount of a real or hypothetical transaction.

An apple's price at a store is $1. We are hired by a competing store to provide a market value opinion for an apple. Our market value opinion of the apple can include supply and demand of apples, prices paid for a similar apple at other stores, and the quality of the apple itself - is it organic etc. Our opinion of market value for the apple is our perspective on the price of the apple. The price itself is the price.

WRt to appraiser to qualify what type of price - if that is the assignment purpose ( assignment purpose, an opinion of value for list price use " . The MV definition is of a most probable price which occurs in a transaction of the terms and conditions so if we are doing a MV definition we are using - the market value opinion is the perspective on the most probable price.

 

[J Grant]

Based on a complete visual inspection of the interior and exterior areas of the subject property, defined scope of work, statement of assumptions and limiting conditions, and appraiser’s certification, my (our) opinion of the market value, as defined, of the real property that is the subject of this report is $ , as of , which is the date of inspection and the effective date of this appraisal.

Can someone tell me where the word "price" appears in the above ?
It is not there. The word PRICE is absent. The appraisal asks for our opinion of MV - because a market value opinion is a perspective on price.

Of course, there is a relation to our market value opinion and a price. It appears above in the qualifier AS DEFINED (link to the definition of market value as a most probable price per the terms and condition stated ). The most probable price is a model of price, which we developed in our opinion of market value perspective on it . Therefore , a most probable model price $ amount is NOT expected to predict an actual $ amount real world price - since a seer like ability is beyond most humans -and Zillow's big data algorithm flunked at it too.

I used the verbiage from URAR but anyone is welcome to present alternate statements of opinion of value they use or find in an appraisal.

 

[JeffSH]

market value is a perspective on price, whereas a price is the actual $ amount of a real or hypothetical transaction.

You're defining price to fit your narrative. There is an infinite number of possible prices, not just one.

 

[The Warrior Monk]

Definition of Price
Price is what I want it to be; Prove me wrong.

 

[JeffSH]

the word price is absent

SEMANTICS!!!!!!! You are the only one who cares about the word price. Everyone else accepts that value is a price. It doesn't have to be explicitly stated every time. That's what definitions are. This is how words work!