"Playing" Appraiser

[Blue1]

Lee Ann,

To me, an active comparable listing represents what would be availble to the buyer if the property you are appraising was not available. If the listing price is lower than your sale price, then why would a buyer buy your property? If the listing price of the comparable listing is higher then your sale price may be below market. Not perfect, but it does serve to show the principal of substitution. (providing all things are equal or comparable)

Yeah, I guess you're right, a seller can sell for whatever they want. I've got one now that is under contract for 30K higher than the highest, most recent sale in the area. There is not sale, nor any listing that adequately supports the agreed upon sale price. Yet, I'll bet that if I "kill" the deal with a "low" appraisal, that home will sell at the asking price or more. Then it'll become a comp. I feel like a "Real Estate Cop."

 

[Farm Gal]

I thought relo appraising was MV x .90 = Anticipated Sale Price. :lol: :lol:

Ben: Hunh? MV = Maximum value?!?!?

You get graded on courtesy, dressing appropriately, answering ALL the relo'ees' quations no matter how stupid, and how close you come to what the thing ultimately sells for.

Not for the faint of heart on the tough ones :roll:

(don't ask about the office dartboard) :wink:

 

[jtrotta]

Blue
in the case of continued additional comp requests, supply the two most recent only; save the third for the additional comp request. FNMA, says they would like three but you don't always have to supply three. If you select the two best, you have a greater & tighter chance of supporting whatever value you arrive at.

some years back, I remember supplying only one comp, and it truly wasa the most similar in every way, the next best one was beyond the mile; and over 10% diff. in GLA. it worked for me and the investor*

Good Luck

8)

 

[Ben Vukicevich SRA]

Lee Ann

MV = Market value

Had a friend of mine show me his relo appraisal once. A negative $10,000 adjustment was made for "winter marketing?" He asked me what that was. Relo forecasting, of course, said I. How'd he do that, he asked. Got me, said I. I don't do relo's.

In truth, most just beat the value down anyway possible. That's why it's called Anticipated Sale Price, right and not market value. You tap dance to the relo client's instructions for a quick sale. Most around here sell for 10% less than market. Didn't you ever wonder why FHA mentions them specifically in 4150.2. Take a look at Page 4-9. Item 7. Even they know something is awry and that's pretty good for the G-men.

Ben

 

[Farm Gal]

Ben:

Pretty hefty adjustment for 'touchyfeely' anything! and NEGATIVE(?) on the comp which sold in winter? Uh what price range?

Different market... for a long time most of our relos were way high end houses... given a hot market, and limited property availability in that segment, dimunition of value was not an issue. We have had in the past a noticeable seasonal price flux, but not in the last year or two that I notice anyway...

Got a bunch of relos in the market now resulting from Santa Fe shutdown. This IS likely to skew the 'average/low end' local market. Interestingly they are doing them retrospective to mid January of this year ... several weeks prior to the public announcement of the shut down... this makes the forecasting pretty much a breeze 8)

 

[Bemis Pownall]

i used 7 comps the other day on a refinance

HO paid $700 7/01
Seller paid $600 6/01
Neither sale was in MLS??? fishy red flag(not arm's length???)
Current sales, listings etc support about $600-$675
3 of the sales were selling less then were paid for within 2 years(i marked decling market too-1st time!) cant support what HO paid within 1 year??

brand new 911 in garage??? paid w/a 30 year mortgage??
$700-$600 =$100,...911 costs $75+ ummmmm????

HO estimate $800

I thought if I use lots of comps, heck pulled um and did all the research etc. They cant say I used the 3 lowest recent sales. So I used the lowest 7 sales! Nope value werent there. Sorry.

 

[Ben Vukicevich SRA]

Lee Ann,

Negative on all comps across the board because he was appraising the home during the winter. Guess that was his forecasting adjustment. Price range about $180,000. Just trying to beat down value there and some other places on the form. I just had a cursory look at it. Really didn't care. Ran some comps for the guy and let him go at it with the relo company.

Ben

 

[BarbaraNJ]

Why do we get so much input from "non appraisers"?

Just think about it------we are the only ones who get a set fee for the job. And in comparison to a realtor commission or mortgage commission, it's quite small.

If the sale does not go through, we get paid. The realtor makes nothing for their efforts. The mortgage co. and the mortgage rep. make nothing. And if its a refinance, the homeowner takes the place of the realtor with regard to financial interest. Quite often, the homeowner needs to suck the equity out of the house because they are up to their ears in debt. Is there any wonder why all the pressure ???

Whenever you are tempted to change a value, just remember that we are the ONLY ONES WHO ARE IMPARTIAL !!!! Everyone else has a strong financial interest in the deal.

I typically provide three sales, unless I feel that additional comps make the valuation more supportable. Will always provide more (at no charge) if requested by my best clients. "Four order per year" clients get charged Xtra.

Will use "under contract" homes to prove a point, but no to arrive at value.
It is always possible the sale will not close, and Murphy's Law will tell you if any of your appraisals is reviewed or reported to the state board, its THAT one. Then YOU have to explain why you gave weight to a home that NEVER SOLD.

Don't ya just LOVE this job ? :lol: :lol: :lol:

 

[Blue1]

Barbara,

You're "right on" like I said......We appraisers are the "Real Estate Cops".....Live it, Leran it, Love it...... :lol:

 

[bradellis]

Blue and Ben,

As a reviewer, I'll just tell you that I never assume that there is a problem when I see more than 3 comps. It is especially pleasing when one of the extras is a listing. Tells me that the appraiser understands the principles of substitution (even though this is supposedly the basis for the cost approach) and competition, and has considered them.

If you have a client that prohibits more than 3, I'd suggest replacing the client. They are either dumb or lazy, or both.

When is see an appraisal with 4-6 comps, my immediate reaction is: the appraiser is trying to tell me and show me his/her reasoning. Is that not what we are supposed to do?

I remember seeing an appraisal years ago that was produced by an attorney/CPA/Certified appraiser. It had 27 comps- and they were all relevant- from the subdivision.

The more the merrier!

Brad Ellis, IFA,RAA