Predominant Value

[Karl]

I agree and I didn't mean to say mean. Posted too fast

Glad see OTHERS! make mistakes too!!

I always thought Appraisers were hired by lenders to EXPLAIN why a home had a particular value be it, above, below, or at the predom (for Doug & others) &/or below above or at Sales Price.

 

[Steve Owen]

George's answer is the best, but it didn't really answer Tim's question (it only hinted at the correct answer to Tim's question).

The question was:

Who taught appraisers that the predominant value on the URAR and 2055's has to be exactly the appraised value?

The answer is Fannie Mae. :rainfro: :rainfro:

 

[Mister Ed]

Steve,

Dont forget all the UW's who have their checklists that have to make sure everything lines up just right.

-ed-

 

[xm39hnu]

Paul,
Divide the data into equal parts, whatever works for the data you're using. Doing this using $10K breakpoints, you have a chart that looks like this, in thousands of dollars:

100-109 3
110-119 2
120-129 2
130-139 4
140-149 1
150-159 1

A point value predominant value is usually not going to surface, even in extremely conforming neighborhoods. Using the chart above, predominant would be 130-140K, IMO, and that's what I use. I don't put a point value for predominant.

 

[Mike Boyd]

Greg has the correct answer, of course, except that the real answer to the actual question is: No one....except maybe individual teachers or mentors. I do not think you will find that final and predominant value is taught in any text book or lender guidelines.

Unless you have repeated actual sales prices, you cannot have a PREDOMINANT value. You can have a predominant range as Jim has stated but if there is no single sales price repeated, how could any sales price be predominant? The question on the report is flawed and should allow for a range.

 

[DB]

I just went back a looked at sampling of some of my report over the past 3 years, and NEVER has the appraisal opinion of value been equal to the predominate value ... I did note that there were several requests from underwriters concerning WHY they didn't equal, and requesting additional comments on the subject ... and I might have complied once or twice ... but in general, I ignore their request until the 3rd or 4th time they send it in writing and then I will give them a small blurb ... if they would only READ the report, they would see that a comment was made regarding where the subject fell (upper or lower end of the range) with regard to the predominant value range.

 

[jonathan asbury]

I think a range would confuse some of the UW and lenders but it would make sense.

That being said (paul and Jim) I would say $133K and not worry about it to much.

I just did one in a neighborhood with 6 sales in 12 months, all were 3 or 4 bedroom houses between 1800 and 2400 sq.ft.
810k
925k
1019k
1099k
1200k
1259k
Subject was a 4bd Approx. 2400 sq. ft. and most similar to #5 but 4,5, and 6 had more upgrades. 3 was closest in condition. 1 and 2 were smaller.
So.........Whats the predominent value??


I also agree with TE Lawrence but that was many posts ago.
And Alisa, definately have a talk with your mentor about this one

jonathan

ps I said 1,050k close enough for government work :rofl:

 

[Richard Carlsen]

As I read the form and complete it, predominant value is the just the, the value of most of the houses in the defined neighborhood. It is not for the greater market area but for the neighborhood which is defined as an area of groupings of inhabitants, buildings or businesses. Most of the predominant values I've seen in reviews are for the market area and are too encompassing.

It has no relationship to subject's value but tells the UW if the subject is "equal to, better than or inferior to" most of the houses in the defined neighborhood.

There are two main ways that I get this number. First is to run a search for all properties that have sold, been listed, expired, withdrawn or are active within my defined sub. From that I judge the type and range of values. The second is to observe the neighborhood houses going in and coming out of the neighborhood. Sometimes I drive in ever increasing circles out from the subject as I leave to see the neighborhood. This is where geographic competence comes in handy.

The ones that are really fun to put down are the rivers where the neighborhood is linear, usually for several miles each way. These values have to come from personal knowledge or the MLS as there is no way you can see the properties without floating down stream in your kayak, an activity not advisable in January or February.

However you do it, most of the time, predominant value is purely a SWAG on the part of the appraiser.

Of course this thread could degenerate if someone asked the question: Is judging the value of the houses in the subject's neighborhood and communicating that "range of value" along with the estimated "predominate" value, considered as an appraisal under USPAP and therefore required to be considered a new assignment with a separate charge and additional fee to the client?

But I won't ask such a question.

 

[Steve Owen]

Do I understand this correctly?

In my opinion you do. But, I do it the way Richard does (and I won't ask that question either).

 

[spittman]

This thread may be mislabeled ... but in the neighborhood section we're supposed to be reporting the predominant PRICE ... not value. Price and value aren't neccessarily the same because many prices can be skewed by non-typical financing terms and it certainly has nothing to do with the Subject Property's "value".