BarbaraNJ
Member
- Joined
- Jan 15, 2002
- Professional Status
- Certified Residential Appraiser
- State
- New Jersey
Many good points have been made, and addressing all would be a bore to the good readers, but permit me a few observations:
I took offense to the Bruss article because it gave the impression to the applicant (and any other non-appraiser reading the response) that they could hire any appraiser to "hit" their number and the lender would readily accept the appraiser hired by them (the applicant)
I cannot speak for all of you, but when a good client calls and asks me to take a "second look" at an appraisal I've done, or calls to ask if there is any more "room", I am happy to take another look, just in case there is something I've missed. They don't abuse the requests, and no matter what my answer is they do not cease doing business with me.
If the lender refuses to ask the appraiser to take another look, or refuses a second appraisal (by anyone), many times it means that they do not want to make the loan (borderline credit, high loan-to-value, etc)
The point that is being missed was brought up earlier.......we are hired to estimate (fair) market value. Does anyone remember "what a prudent, informed buyer would be willing to pay"?
We CANNOT account for (or appraise for) irrational decisions. The very purpose for a disinterested third party (appraiser) is to take any bias out of the value decision.
There are many, sometimes crazy reasons why a person is willing to pay above the market for a property. For instance, a local area home sold recently for about $10,000 more than the highest bidder. The reason, I found out later, was that the couple had two young children and the home was very near to both sets of parents. The premium the couple paid for the house was saved in only a years' worth of day care now done by the parents instead of a paid provider.
Does that mean the home was "worth it" to a "typical, informed buyer"?
In my experience, the premium paid by that young couple was for "Value in Use" that is, it had an additional value to them over and above any other buyer.
No one can predict price to the nearest $100.00, and no one I know will claim that they can. That is why I feel I can be somewhat flexible. But I refuse to appraise for irrational behavior.
As always, just my 2 cents.
____________________
The Harder I Work, The Luckier I Get
I took offense to the Bruss article because it gave the impression to the applicant (and any other non-appraiser reading the response) that they could hire any appraiser to "hit" their number and the lender would readily accept the appraiser hired by them (the applicant)
I cannot speak for all of you, but when a good client calls and asks me to take a "second look" at an appraisal I've done, or calls to ask if there is any more "room", I am happy to take another look, just in case there is something I've missed. They don't abuse the requests, and no matter what my answer is they do not cease doing business with me.
If the lender refuses to ask the appraiser to take another look, or refuses a second appraisal (by anyone), many times it means that they do not want to make the loan (borderline credit, high loan-to-value, etc)
The point that is being missed was brought up earlier.......we are hired to estimate (fair) market value. Does anyone remember "what a prudent, informed buyer would be willing to pay"?
We CANNOT account for (or appraise for) irrational decisions. The very purpose for a disinterested third party (appraiser) is to take any bias out of the value decision.
There are many, sometimes crazy reasons why a person is willing to pay above the market for a property. For instance, a local area home sold recently for about $10,000 more than the highest bidder. The reason, I found out later, was that the couple had two young children and the home was very near to both sets of parents. The premium the couple paid for the house was saved in only a years' worth of day care now done by the parents instead of a paid provider.
Does that mean the home was "worth it" to a "typical, informed buyer"?
In my experience, the premium paid by that young couple was for "Value in Use" that is, it had an additional value to them over and above any other buyer.
No one can predict price to the nearest $100.00, and no one I know will claim that they can. That is why I feel I can be somewhat flexible. But I refuse to appraise for irrational behavior.
As always, just my 2 cents.
____________________
The Harder I Work, The Luckier I Get
(me) "well NO mom, I'm not....but thats where the cyphering pointed me". I changed the report to reflect a rounded (to nearest $1000). Thanks for the memories!