Predominant Value

[Tim Hicks (Texas)]

I have never seen this discussed on the forum, but this one of my pet peeves from reviews I have done.

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

It seems that 9 times out of 10 the "reported" predominant value is always the exact same number as the appraised value. Wouldn't this fall under the heading of producing a misleading report? I have always put a range for predominant value and never been questioned.

It sure looks shaky under review when the home is grossly over appraised and the comps from the area are all much lower, but somehow the predominant value is exactly what the over valued property is supposedly worth.


My attempt to bring this site back to an appraiser's forum with appraisal issues.

 

[Em Tee]

On the flip side, Tim, I've had a reviewer question me as to why the appraised value was higher than the predominant value. DUH! I think there's too many people who don't know what "predominant" means.

 

[wyecoyote]

Tim,

My mentor used to do this all the time. The pred value had to be the appraised value. So I know what you are talking about. Now I just run a area market survey for the MLS market area the subject is in. Put down the high low and the mean value that it comes up with. I also explain it in the report as well as provide the numbers. I have as of yet to be questioned about this.

Edit: Just wanted to add IMO this is easily deffendable since I have the printout in the file. And if ever questioned all I have to do is pull it out. Someone questioned about this like you describe will have to

:dance:

 

[Nancy Wyatt]

I always put a range for the predominant value, and I get it directly from the neighborhood CMA. I sometimes include the CMA in my reports.

You must explain why your subject is above or below the predominant. The house may be smaller/larger or remodeled or not. Just a few sentences to explain.

 

[Mountain Man]

Like Mary, I've had UW's complain that the subject exceeded predominate, or was below predominate.
Now I just list wide ranges, like new to 100 years and $50,000 to $3,000,000. And include a little statement that this is a rural area, and as is common in rural areas, there are no true predominate age or prices.
Haven't had any UW fuss since. B)

 

[Ray Miller]

In most of my rural appraisals that I am dealing with acreage. I add (scan)the CMA to the report and then write in the number of acres on the side of the cma and if it is a log home or not.

Then they can just go to the exhibt and see what is going on.

But I was working with a couple of my mentors, who would accept no other but the predomimate value. Then another who woudl not accept any value but the one with the least amount of net and gross adjustment of the first three comparable sales.

If I am haveing a problem with a lender, because I did not go out of a neighborhood to get value I will put the cma into the report for the neighborhood. That when I never hear from them again. But find out later that the loan closed with another appraisal.

 

[CANative]

I report the low and high in the area defined in the comments on neighborhood boundaries and characteristics. Due to the nature of my terriroty, these boundaries may encompass diverse properties and neighborhoods. I then report the mean. In the market conditions section, i write a little blurb describing the types of properties at the low end and the high end and describe where the subject would fit into the picture.

 

[NJ Valuator]

I did 3 reviews of the same person on three different properties in the same market area completed within one week of each other and each time the predominant price changed to whatever the appraised value was.

 

[Bobby Bucks]

Tim I’ve never considered it an issue as long the predominant value was within 20% of the opinion of value and if not, I think a comment should be made on whether it would affect marketability or not. I read that somewhere, I can’t recall where at the moment, maybe in the lounge? Are you certain it wasn't a substandard floor plan in the original report that truly set you off? A lot of people have been on edge lately with a presidential election so close. BTW, did you decide who you're voting for yet? :lol:

 

[DTB]

I've never added a comment on where the subject falls in the range. I figure if a have good ( similar, near,recent ) comps on page 2 it becomes self explanatory. I view the report as a whole. Not that each section or subsection should stand as a complete explanation on its own. My 2 cents.