Please comment regarding the Contract Price being higher than the Appraised Value.

[AnonApprsr]

Here's mine:

Please note that the contact price of $***,*** is 3% higher than the estimate of Market Value of the Subject, as of the effective date of this report.
An estimate of value being different by 3% is considered a small difference, well within the typical range of accuracy of real estate appraisals. The Subject's sale Transaction, per the P&S provided to the appraiser, notes that the Seller is contributing $5,000 in Seller Concessions, which if taken at dollar for dollar exchange would reduce the amount paid for the Subject Property, via perception of the local Market Area, to $***,***. Similarly Sale #3 was adjusted for Seller Concessions provided at Closing. Please also note that for any real estate market to appreciate there will be sales of homes with Sale Prices that appraisals can not support. In such cases the market decides that putting down the cash to meet the difference, which will lead to appreciation of values in the local market. This is a typical occurrence during markets in appreciation, and during the typical Spring/Summer selling seasons.

Post yours asap. Comment on others. :new_multi:

 

[CANative]

"The contract price is higher than the opinion of value stated in this report."

 

[AnonApprsr]

My best client, I don't mind going beyond the necessary for their benefit. They were more than happy with the response which took me 3 minutes to type, and 4 more minutes to send. Just wanted other versions, and opinions on mine etc. Customer Service is a choice, after all.

 

[CANative]

What's to comment on? "Here's what those guys think and here's what I think."

 

[Mile High Trout]

That's smart real estate talk.

Remind the writer that several instances of sales from other properties from recent time frames can also contribute to a higher than expected valuation. The cash contribution factor can be limited to peak valuation ranges and as the subject was not within that range, a higher opinion based on other sales was logical. Homes which do not demand peak valuations can also benefit from cash contributions sales well out of range have which have shown in the same markets. A sort of trickle down effect if you will if the market shows consistent buyer demand.

I'm just guessing, but it sounds like that scenario.

 

[23Degrees]

I've inserted this language in the past - good or bad, never heard a peep back -

It is recognized that the opinion of value differs from the noted contract price by less than X% however the convergence of the data was such that to raise the opinion of value due solely to the presence of a purchase contract would amount to the utilization of a predetermined value.

BTW -

From Your Above - "Please also note that for any real estate market to appreciate there will be sales of homes with Sale Prices that appraisals can not support. In such cases the market decides that putting down the cash to meet the difference, which will lead to appreciation of values in the local market. This is a typical occurrence during markets in appreciation, and during the typical Spring/Summer selling seasons."

Excellent!! - Lots of problems saved if this was the prevailing mindset over the last decade.

 

[Smokey Bear]

Nice, 23 Degrees.

 

[J Grant]

I've inserted this language in the past - good or bad, never heard a peep back -

It is recognized that the opinion of value differs from the noted contract price by less than X% however the convergence of the data was such that to raise the opinion of value due solely to the presence of a purchase contract would amount to the utilization of a predetermined value.

BTW -

From Your Above - "Please also note that for any real estate market to appreciate there will be sales of homes with Sale Prices that appraisals can not support. In such cases the market decides that putting down the cash to meet the difference, which will lead to appreciation of values in the local market. This is a typical occurrence during markets in appreciation, and during the typical Spring/Summer selling seasons."
.

Right, that's how markets legitmately rise when agents bring QUALIFIED buyers to deals! The qualified buyers who think enough of a property to put more real money, not just financed money, these buyers start the the upward buying trend and should support it throughout a rising market. A a rising market usually is accompanied by positive economic news and lowering of unemployment rate.

 

[Joyce Potts]

VODKA

It's not just for breakfast anymore!

 

[zydeco2go]

"Please also note that for any real estate market to appreciate there will be sales of homes with Sale Prices that appraisals can not support. In such cases the market decides that putting down the cash to meet the difference, which will lead to appreciation of values in the local market" Anon.

If I was a Realtor, I would take exception to this. An opinion of value can be derived in many different ways, NOT just prior sales. We use three approaches to value. We can analyze market trends and etc etc. WOW! a person could even go as far to make a TIME adjustment, if market data dictates. Maybe I've become "old school", but if I complete an appraisal and state my opinion of value and the reasons for the opinion, I've done the job I was hired for. It may not "FIT" into the software of an AMC, but frankly thats not my problem. I agree with CANative.