MV opinion vs a price estimate

[Mike Kennedy]

Market Value is described in the Uniform Standards of Professional Appraisal Practices (USPAP) as “a type of value, stated as an opinion, that presumes the transfer of a property (i.e., a right of ownership, or a bundle of such rights), as of a certain date, under specific conditions set forth in the definition of the term identified by the appraiser as applicable in an appraisal.”

Market Value is defined by The Appraisal Institute in their basic text; The Appraisal of Real Estate, 13th Ed., p.23 as: “The most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms, for which the specified property rights should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under undue duress.”

 

[Charles West]

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

As long as you find someone who agrees with you, you could be right. Asking price absent a buyer pool is just disappearing vapor.

 

[J Grant]

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

Of course there are an infinite number of real world possible prices !!
But all we need to do in our appraisal is support our market value opinoin perspective on that one most probable price we believe represents it best.

I am not defining price to fit my narrative. I am simply explaining what an appraisal is - the price expression is the most probable price as defined ( the MV definition used )

You do understand our OMV as a $ amount is a price model, not expected to perform as a prediction of an exact real world price ? An appraiser claiming they can predict precise real world prices ... now I understand the saying " we are not that good " We can't predict a real world price, but we can support our model price developed from a market value opinion perspective of the appraisal

When we do a competent job, often our OMV and a real world price will be close to each other ( and sometimes even a match )

 

[JeffSH]

"Real world price" ROFL!

 

[J Grant]

S

"Real world price" ROFL!

It is amazing you fail to grasp the concept that price and value are not one and the same, since that is the basis of the appraisal profession! Price and value can be a same $ amount, but it literally does not make them the same thing. Stating an opinion of value is a perspective on a price- whether it be an actual price paid or our own model of most probable price developed in our apparisal.

What is funny about saying real world price, to distinguish it from an appraisal model of most probable price ? Glad i made you laugh though !

 

[JeffSH]

the concept that price and value are not one and the same

The argument is whether or not market value is a price. We aren't arguing they are the same. ANOTHER RED HERRING!

 

[J Grant]

OMG helpppppp

The argument is whether or not market value is a price. We aren't arguing they are the same. ANOTHER RED HERRING!

Market value is a transaction price that occurs at X price. An opinion of market value is the perspective on a price, and can be expressed as a price ( a price modeled in the appraisal )
A price is the $ amount paid in a transaction. The term "market value " is the transaction where price occurs. An opinion of market value is a perspective on a price ( and occurs in a model transaction at certain terms - the MV definition used )

It can get confusing though because the general public and other professionals in the RE industry toss around the terms value and price and market value and price interchangeably,

 

[Terrel L. Shields]

USPAP is irrelevant.

Poking a stick through the fence at the snarling pooch...

Correct. USPAP is not a textbook.

 

[JeffSH]

The term "market value " is a perspective on that price or on a group of prices.

Market value is not a perspective on a particular price - it is a price - the most probable price based on......

 

[Terrel L. Shields]

"Real world price" ROFL!

It's like OMV...find that one in the appraiser dictionary