Opinion of Value Below Comparables

[Jayjay25]

Yes. Every time. What do you do?

I analyze the market and make appropriate market condition (time) adjustments to the comparable sales reflecting current market conditions. Opining a value outside of the ADJUSTED values of the comparable sales should definitely be scrutinized. You’re report sounds like it is lacking analysis of market conditions, possibly contract terms or maybe the adjustments just need to be revisited.

 

[Jayjay25]

I will never reconcile to a value that is outside my adjusted sales range. That said, if I've applied my market adjustments correctly, there would be no reason to reconcile outside the adjusted range.

With respect to you reconciling 'above' the adjusted range in an appreciating market - you're either being intentionally deceptive, or you're in the VAST minority (a minority of 1, I'd guess).

I had an underwriter friend of mine tell me he sees appraisers do it all of the time. He said “they will just call the final value $20k over the adjusted value with no explanation in the report”. Pretty sure it’s more common than we think.

 

[alebrewer]

I had an underwriter friend of mine tell me he sees appraisers do it all of the time. He said “they will just call the final value $20k over the adjusted value with no explanation in the report”. Pretty sure it’s more common than we think.

In my 20+ years of appraisal management, I've never seen someone reconcile outside the adjusted range unless it was a mistake. Of course, that's just one observation...

 

[CGinMN]

I have never not been able to credibly derive quantitative support for a market conditions adjustment to account for differences between the contract dates of the comparable sales and effective date of the appraisal.

But, if you are the type of appraiser who thinks it's acceptable to adjust for market conditions qualitatively - for example by reconciling to the upper or lower end of the range - then I don't see why reconciling outside the adjusted range wouldn't also be acceptable.

 

[CGinMN]

FWIW Fannie requires the indicated value of the SCA to be within the adjusted range.

 

[alebrewer]

FWIW Fannie requires the indicated value of the SCA to be within the adjusted range.

View attachment 65530

I hadn't thought about qualitative assignments, but you had a good point - if it's a qualitative analysis, there's really no adjusted range anyway, right? In which case you wouldn't be reconciling above or below the adjusted range. If, however, you are performing a quantitative analysis, is it acceptable to mix in qualitative stuff as well? Seems it would potentially be misleading, but it's something I haven't really thought about before...

 

[jay trotta]

Exactly why we should be reporting a range of value, instead of a point value...

Wouldn't that be Bracketing?

 

[CGinMN]

Appraisers can't be like "I don't have enough data to support a time adjustment" then be like "I'm gonna make a qualitative adjustment instead." The logic doesn't work. IMO

 

[Jayjay25]

I have never not been able to credibly derive quantitative support for a market conditions adjustment to account for differences between the contract dates of the comparable sales and effective date of the appraisal.

But, if you are the type of appraiser who thinks it's acceptable to adjust for market conditions qualitatively - for example by reconciling to the upper or lower end of the range - then I don't see why reconciling outside the adjusted range wouldn't also be acceptable.

How much outside the adjusted range and where does that number come from?

 

[CGinMN]

How much inside and where does that number come from?