Price Versus Value ? Define Value.

[glenn walker]

The price on the contract

That's actually the most probable based on you have buyers, sellers, agents and multiple opinions. In about 3% to 5% of cases it's possibly under or over priced but then the appraiser becomes the umpire and has to make a decision.

 

[George Hatch]

The comps used are based on closed Sales- Prices. The buyer's purchase is based on getting the best price they can negotiate.

Nobody's ever been able or to define what value is to someone else but we continue to sign and certify that only
we the Appraisers Can Define Value.

I've always laughed as we sign something that nobody can define.

I can define what the most probable price point may be based on the sales used but nothing else.

Are you bored or something?

 

[George Hatch]

Most Probable Price
Contract Price
Sales Price

One of those is an opinion, not a fact. The other two are facts, not opinions.

 

[glenn walker]

Most Probable Price
Contract Price
Sales Price

One of those is an opinion, not a fact. The other two are facts, not opinions.

Correct and that's why the easiest value is the Sales Price or Contract Price and the most probable is the hardest to defend when nobody else in the transaction agrees with the appraisers final opinion of value. Lol

 

[Surf Cat]

"The value" or the appraised value is what I'm assuming you're referring to since the question is asked of us as appraisers, is our estimate or opinion of what a property is worth. To determine the appraised value, we look at historical closed sales which most weight is placed on as well as pending and active sales in the immediate market area to support our opinion.

The factors include location, construction (year built, style) GLA, bed, & bath count, features, blah blah, etc. We slog through this supposedly to help the lender gauge the risk on making a sound lending decision. And.... to make sure the buyer doesn't financially "over commit" (which doesn't work BTW).

"The price" is the actual amount the property sells for to a supposedly informed buyer who is not being duped by their realtor. Again, current market conditions, demand, and how many parties do they have to out bid.

If the "appraised value" and the "contract price" differ.... this puts a big stick in the spokes and makes everybody "unhappy". Disgruntled realtor calls, stips, and ROVs ensue....

If the appraised value matches the contract price.... winner winner chicken dinner..... everybody's happy! This is "the price".

The End

 

[Dublin ohio]

As Warren Buffett said "price is what you pay, value is what you get".

 

[Surf Cat]

As Warren Buffett said "price is what you pay, value is what you get".

"You know you’re priced right when your customers complain—but buy anyway." — John Harrison.

 

[Fernando]

At Costco, I know I get great value so I buy too much.

 

[sputnam]

The comps used are based on closed Sales- Prices. The buyer's purchase is based on getting the best price they can negotiate.

Nobody's ever been able or to define what value is to someone else but we continue to sign and certify that only
we the Appraisers Can Define Value.

I've always laughed as we sign something that nobody can define.

I can define what the most probable price point may be based on the sales used but nothing else.

Only, value is definable and defined. USPAP requires you to include the definition... and the source of the definition... in your appraisal report. Yep, there are several similar, but slightly different definitions. Which one you use depends on the type of value and on the requirements of the Client and Intended User. If you are doing a Fannie/Freddie market value, the definition may be built into the appraisal report form.

Not understanding the definition is a different issue... and, I have to agree.. some don't... and in some ways it doesn't matter. What does matter is understanding that value (for appraisers) is a concept that doesn't really apply to any particular individual. We aren't finding how much a particular person thinks something is worth.

 

[J Grant]

The appraiser's opinion of market value is still their opinion of market value, even if it is the OMV is the same $ amount as the SC price.