Prudent?

[timd354]

I acknowledged natural variance int he market but said to appraise above highest last sale in subject condo there still should be OTHER market support for doing so! Such as other SIMILAR closes higher price sales ( not just less similar higher price sales ), and ideally, subject is superior in some way to the higher price last sale as well.

If the appraised value (which is supposed to reflect market value in a mortgage lending appraisal) could never be above the highest similar sale, how could market value ever increase? It is exactly these kind of statements that cause some people to think that appraisers are idiots. In the OP example, if there is strong market support showing that prices are increasing at 2% per month/24% per annum over the past year and that appreciation rate appears to be ongoing and the last 3 sales in the subject's project sold over the past 3 months for $96k, followed by $98k, then $100k, with 1 pending at $102k, assuming that these 3 sales and the 1 pending sale are all comparable units, then any appraiser who believes that the current market value of a comparable unit in that project is less than $102,000 simply is ignoring the relevant market trends and really has no clue what they are doing.

 

[timd354]

Do you attribute the increase to number hitting?

Its obviously number hitting....any increase in value over above whatever rate of appreciation that JGrant believes is prudent is the result of number hitting since in her world, it is not the appraiser's job to merely report the mar
job to merely report the market, it is the aprpaiser's job to stop real estate bubbles.

 

[J Grant]

If the appraised value (which is supposed to reflect market value in a mortgage lending appraisal) could never be above the highest similar sale, how could market value ever increase? It is exactly these kind of statements that cause some people to think that appraisers are idiots. In the OP example, if there is strong market support showing that prices are increasing at 2% per month/24% per annum over the past year and the last 3 sales in the subject's project sold over the past 3 months for $96k, followed by $98k, then $100k, with 1 pending at $102k, assuming that these 3 sales and the 1 pending sale are all comparable units, then any appraiser who believes that the current market value of a comparable unit in that project is less than $102,000 simply is ignoring the relevant market trends and really has no clue what they are doing.

Did you fail to read my post where I said it is fine to appraise above the last highest sale price in condo, as long as OTHER similar unit closed sales, and or qualities of the subject support it?

How would prices increase? By buyers putting their own cash down to close the difference between MVO and SC price. If buyers are unwilling, or unable to do so, why should appraisers push prices upward by fudging results in a report to hit prices? I am surprised at some of your views given your postilion, but you are employed by a PMI firm that profits from a greater amount of low money down loans being made, and low money down buyers are frequently the buyers who make the highest offers.
I suppose the MV definition change from most probable price from highest probable price is meaningless?

One can say appraisers are "idiots" by coming in at 100k with a 102k contract, or that appraisers are number hitters by coming in at 102k when predominant support is for the 100k.

 

[timd354]

Did you fail to read my post where I said it is fine to appraise above the last highest sale price in condo, as long as OTHER similar unit closed sales support it?

Why do you need another closed sale? Assuming the facts in OP are correct, then one could clearly opine a well supported and credible value of $102k without the need for any additional comparable sales. In an established project, the best indicators of value are other units located in the project, so why would I want to go outside the project and use sales that are less comparable than what I already have?

 

[timd354]

One can say appraisers are "idiots" by coming in at 100k with a 102k contract, or that appraisers are number hitters by coming in at 102k when predominant support is for the 100k.

If the $102k contract is not supported, then I have no problem with appraisers opining a lower appraised value. However, assuming that the facts given in the OP are correct (i.e., there is strong support showing a current rate of appreciation of 2% and the 3 sales in the project are all truly comparable), then there is strong market support supporting a market value of $102k in this case and any appraiser who came in at $100 under these circumstances is an idiot and guilty of professional negligence IMHO.

 

[J Grant]

Its obviously number hitting....any increase in value over above whatever rate of appreciation that JGrant believes is prudent is the result of number hitting since in her world, it is not the appraiser's job to merely report the mar
job to merely report the market, it is the aprpaiser's job to stop real estate bubbles.

No, that is not true, that is your number hitting agenda in imagining what "my world " is...when all I am doing is what an appraiser is supposed to do- develop market value opinions, not support SC prices that are above the best indicators of value ( and that includes factoring in appreciation in market condition adjustments)

Afraid of the need for PMI insurance going down if not enough high SC prices or high refi targets are not hit? What is behind your aggressive stance about poorly supported high prices anyway?

"Merely report the market" ?. An appraisal analyzes the market , (or is supposed to....especially the subject property.

 

[djd09]

The bank instruments need values to rise.

 

[timd354]

No, that is not true, that is your number hitting agenda in imagining what "my world " is...when all I am doing is what an appraiser is supposed to do- develop market value opinions, not support SC prices that are above the best indicators of value ( and that includes factoring in appreciation in market condition adjustments)

Afraid of the need for PMI insurance going down if enough SC prices or high refi targets are not hit? What is behind your aggressive stance about poorly supported high prices?

We decline insuring loans every single day because we don't believe the appraised value/sale price is adequately supported, so you have no idea what you are talking about. While we try are best to avoid insuring loans in which the appraised value/sale price is not supported, we also try not decline coverage in cases where the value is supported and in the OP's case (assuming the given facts are correct), there is plenty of market support for a value of $102,000

 

[J Grant]

If the $102k contract is not supported, then I have no problem with appraisers opining a lower appraised value. However, assuming that the facts given in the OP are correct (i.e., there is strong support showing a current rate of appreciation of 2% and the 3 sales in the project are all truly comparable), then there is strong market support supporting a market value of $102k in this case and any appraiser who came in at $100 under these circumstances is an idiot and guilty of professional negligence IMHO.

. Read the OP post one, where he talks about the way to hit the 102k is by fudging adjustments and using less similar sales ! Read the very first post in this thread.

 

[J Grant]

Why do you need another closed sale? Assuming the facts in OP are correct, then one could clearly opine a well supported and credible value of $102k without the need for any additional comparable sales. In an established project, the best indicators of value are other units located in the project, so why would I want to go outside the project and use sales that are less comparable than what I already have?

Did you not read the post # one in this thread? The op cited sales in project of same units of 96k, 98k and only one at 100k. They alluded to reaching 102k by fudging adjustments and using less similar sales.