MV opinion vs a price estimate

[J Grant]

Wert yes there are different types of value, but market value is the most commonly used, and of course liquidation value or disposition value are types of market value.

 

[J Grant]

USPAP is extremely basic because there are many different types of values and many different appraisal situations. Why would USPAP define value? This is called a red herring it's a debate tool that is used by people who can't address the actual point.

A definition of value is used when it is a component relevant to assignment. We appraise using a definition of the type of value we are seeking, and it usually is a form of market value. The definition of value/definition of market value has to be stated in the appraisal . The " as defined " clause where we state our market value opinion links to the MV definition used ( which states terms and conditions of the most probable price )

A MV opinion is an opinion of market value, (expressed as the most probable price using the market definition in the appraisal (as defined)

 

[glenn walker]

You know, J, if you're in the vast minority on your opinion(s), is it possible that it's you that may have the blinders on? Have you ever tried to look at this problem (or any other, for that matter) with an open mind that - perhaps - you might be looking at it incorrectly? An appraisal is, by definition, an opinion of the PRICE a property should sell for under all conditions requisite to a fair sale in an open and competitive market. Period. Yes - it's an opinion of market value - which is an opinion of PRICE. Price is the amount of money given in payment for something. That is what we are estimating. Not sure why you can't grasp this, but maybe you'll find someone, somewhere, who will agree with you. Best of luck with that.

J.G Grant is in a brain freeze where and She does not comprehend that the Definition of "Market Value" is used because thats -What's currently on the Fannie Pre-Printed Form and Certification's. And team USPAP had to use some definition that sounded better than another one which used to be Fair Market Value. The newer definition allowed them to include a boat load of assumptions using things like the parties involved are informed Blah, Blah, Blah Etc. As the Mayor of Real Ville people only want to know whats is worth ? and Price-and whats it worth ? and value are one and the same to everyone but the appraisier. The value is typically a hidden emotional consideration which often may only be applicable to only that particular person or persons and as an appraiser I know that I never know a properties true value as their are too many unknown variables. BUT I can tell you what its worth on the effective date.

Way back in dinosaur days we used "Fair Market Value" and currently the IRS and some other Agencies still do use that definition. So what is fair market value (FMV)? According to the IRS, it's the price that property would sell for on the open market. This is the price that would be agreed upon between a willing buyer and a willing seller. Neither would be required to act, and both would have reasonable knowledge of the relevant facts. In the end its all semantics--In Realtors Lingo and Buyers and Sellers we can apply to entire texts or to single words. For example, "destination" and "last stop" technically mean the same thing, but students of semantics analyze their subtle shades of meaning. J.G. Grant is trying to prove that a definition of Market Value by using subtle shades of what it means to her and she is trying to prove that market value is not the same as what the property would Sell for or that it's Sales Price is different than its Purchase Contract Price.
In the end its all futile and believe me the so called Lender Client is just like the buyer and Realtors and all they want to know its whats it worth.

 

[George Hatch]

USPAP is irrelevant ? USPAP is our professional standards ! All I post is what exists in either USPAP, the MV definitions or statements on the URAR...

Is the above italics your thoughts ? They are valid thoughts but they are not what USPAP says -

Market value - there is no such animal as "market value " that we sign off on . We sign off on an opinion of market value .

Yes, in the MV definition (as defined ) MV is what a property should bring in a transaction- so it is a hypothetical "sale "- and we use comps that actually did sell - none of which turns a market value opinion into a price opinion. PLEASE show me the " A market value opinion is a price opinion " in USPAP. If it exists in USPAP I will eat crow and you can throw things at my cage lol

I don't think it exists in USPAP. I understand what you and others mean by it of course. But a market value opinion remains a market value opinion, expressed as the most probable price per the MV definition used. ( as defined )

The reference to Market Value in USPAP is to a "type" of value for which there are some requirements for the appraiser to meet. That's why the comment

Comment: Appraisers are cautioned to identify the exact definition of market value and its authority applicable in each appraisal completed for the purpose of market value. ​

USPAP doesn't provide any of those "exact definitions" for Market Value or Liquidation Value or any other kind of value. MV isn't an appraisal standard. As far as MV itself goes, there are multiple definitions. Which of those definitions being used will be the result of agreement between client and appraiser, although the client may be required to use a specific definition.

An appraisal is an opinion of value. That means the value conclusion in your 1004 is an opinion, of MV. The definition we're using in these appraisals states is as the opinion of the most probable price in the market. None of these appraisal assignments are oriented toward developing a "price estimate".

Whatever other mental gyrations you're engaging in serve no purpose or utility in what we do. One thing you are correct about is being in the minority on this "price estimate". It's a minority of exactly one: you.

Remember, the whole reason you went off on this tangent is because you think the sales which occur during a seller's market are not market sales and do not indicate to market value because the shortage of supply causes "undue stimulation" among the buyers. Same as you were doing back when the markets were in decline and most of the sales were REO resales: "undue stimulus" among the sellers. You were wrong then and you're wrong now, and this opinion of MV vs price estimate is just a continuation of that fundamental misunderstanding.

"Undue stimulation" compared to what? Compared to the prevailing market trends or compared to some fixed benchmark that you consider to be "typical" at all times and regardless of market conditions. Obviously the former, as you don't have a reference to cite for to the latter.

But, your history on this debate over the years demonstrates that you are facts-hesitant. So you will undoubtably continue this Don Quixote quest for the fixed (and not variable) benchmark for what "typical" is. All in order to say that most of the sales in a market can be ignored in an appraisal assignment and that the atypical outliers are somehow the only sales that can be considered.

 

[J Grant]

Actually Glen The definition of MV we use is not the issue (though interesting)

the issue is an appraiser saying they are giving a price opinion when they are engaged for a MV opinion (or any definition of MV) and of course I understand we express it as most probable price

 

[J Grant]

The reference to Market Value in USPAP is to a "type" of value for which there are some requirements for the appraiser to meet. That's why the comment

Comment: Appraisers are cautioned to identify the exact definition of market value and its authority applicable in each appraisal completed for the purpose of market value. ​

USPAP doesn't provide any of those "exact definitions" for Market Value or Liquidation Value or any other kind of value. MV isn't an appraisal standard. As far as MV itself goes, there are multiple definitions. Which of those definitions being used will be the result of agreement between client and appraiser, although the client may be required to use a specific definition.

An appraisal is an opinion of value. That means the value conclusion in your 1004 is an opinion, of MV. The definition we're using in these appraisals states is as the opinion of the most probable price in the market.

Whatever other mental gyrations you're engaging in serve no purpose or utility in what we do. One thing you are correct about is being in the minority on this "price estimate". It's a minority of exactly one: you.

Remember, the whole reason you went off on this tangent is because you think the sales which occur during a seller's market are not market sales and do not indicate to market value because the shortage of supply causes "undue stimulation" among the buyers. Same as you were doing back when the markets were in decline and most of the sales were REO resales: "undue stimulus" among the sellers. You were wrong then and you're wrong now, and this opinion of MV vs price estimate is just a continuation of that fundamental misunderstanding.

"Undue stimulation" compared to what? Compared to the prevailing market trends or compared to some fixed benchmark that you consider to be "typical" at all times and regardless of market conditions. Obviously the former, as you don't have a reference to cite for to the latter.

But, you are facts-hesitant. So you will continue this Don Quixote quest for the fixed (and not variable) benchmark for what "typical" is. All in order to say that most of the sales in a market can be ignored in an appraisal assignment and that the atypical outliers are somehow the only sales that can be considered.

Hey I agree with you @! (in part )
Read though what the thread topic is - appraisers saying they provide an opinion of price , or an estimate of price - when they are engaged to provide an opinion of MV and purpose of appraisal states an opinion of market value. /

i am not arguing how high or low their $ opinion is or what the prices of the market sales are.

 

[J Grant]

Remember, the whole reason you went off on this tangent is because you think the sales which occur during a seller's market are not market sales and do not indicate to market value because the shortage of supply causes "undue stimulation" among the buyers. Same as you were doing back when the markets were in decline and most of the sales were REO resales: "undue stimulus" among the sellers. You were wrong then and you're wrong now, and this opinion of MV vs price estimate is just a continuation of that fundamental misunderstanding.

WRONG assumption on your part.

When did I ever say that ? I could not have survived as a busy appraiser doing lender work for over 25 years if such were the case.

Undue stimulations part of the MV definition - don't blame me for it !!! But it references ONE specific price, not did undue stimulation affect an entire market. the MV definition sets the terms and condition of one price to analyze - was the price of this sale affected by undue stimulus - (even if alll other prices are high/increasing )

 

[George Hatch]

Hey I agree with you @!

Read though what the thread topic is - appraisers saying they provide an opinion of price , or an estimate of price - when they are engaged to provide an opinion of MV and purpose of appraisal states an opinion of market value./

price is literally part of the definition of MV. The following sentences mean exactly the same thing within the context of the definition being used.

(Market value) of the property is $1.​

​

(The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus.) is $1​

 

[George Hatch]

Remember, the whole reason you went off on this tangent is because you think the sales which occur during a seller's market are not market sales and do not indicate to market value because the shortage of supply causes "undue stimulation" among the buyers. Same as you were doing back when the markets were in decline and most of the sales were REO resales: "undue stimulus" among the sellers. You were wrong then and you're wrong now, and this opinion of MV vs price estimate is just a continuation of that fundamental misunderstanding.

WRONG assumption on your part.

When did I ever say that ? I could not have survived as a busy appraiser doing lender work for over 25 years if such were the case.

Undue stimulations part of the MV definition - don't blame me for it !!! But it references ONE specific price, not did undue stimulation affect an entire market. the MV definition sets the terms and condition of one price to analyze - was the price of this sale affected by undue stimulus - (even if alll other prices are high/increasing )

Yeah, I don't see how you've gotten this far in this business thinking this either. As for rewriting your history of "trying to protect the equity of property owners" all those years ago, you can do that but it isn't going to affect my recollection of it. You and I went back and forth on that one in great detail over a prolonged time.

 

[glenn walker]

Yeah, I don't see how you've gotten this far in this business thinking this either. As for rewriting your history of "trying to protect the equity of property owners" all those years ago, you can do that but it isn't going to affect my recollection of it. You and I went back and forth on that one in great detail over a prolonged time.

We are all just playing word games and semantics and we use the definition that is Pre-Printed on our Fannie-Freddie Forms and Certifications. Also the line which states Opinion of market vlaue is also bogus as Pre-USPAP appraisals were considered to be opinions but after USPAP in court cases the bar had been raised to a level that it was no longer just an opinion but one that had to be supported by the data anal the appraisers analysis. That where it got nasty because we can always fined a hired gun called an -expert witness to challenge our opinions and our analysis. I think Grant is confused that just because we sign a Pre-Printed Form and Certification that we have to agree with everything the Word Smithers have written. In my Opinion all residential loan reports should be based on a Defenition of "Fair Market Value" Period. Also a Fair market Value in reality applies to almost any definition even on a distress sale it's a Fair Market Value when compared to other similar lower priced distress sales.