Realtors Manipulating The Market.

[Joyce Potts]

The bottom line is, at least in my market, there is no independant, third-party verification source.

Most rely on the verbal representations of the parties and/or Realtors, which I caveat in my reports. Big whoop.

 

[Ken B]

And it is a real shame we don't value property based on the buyer's down payment and monthly payment instead of cash going to the seller.

Most don't adjust for it, but financing is/should be one of the first considerations. That one comp that sticks out like a sore thumb for no apparent reason...check for favorable financing terms.

 

[SANDY]

"The writers of USPAP" did not decide to "put this requirement on appraisers" in order to hang them. The definition of MV we are working under is based on terms of cash or cash equivalency and was in existance before USPAP. Analyzing the effect of non market terms or creative financing would be necessary by a conscientious appraiser even if there was no such thing as USPAP or Fannie Mae.[/quote


Well thanks for clearing that up! Might have been a good idea to determine if such information was even obtainable if not readily obtainable and if either of the above were true then whether the obtainable info and it's typical source was reliable or not.

Oh well, I guess those details aren't as important as the history details of how they were developed -right!

 

[Stone]

"The writers of USPAP" did not decide to "put this requirement on appraisers" in order to hang them. The definition of MV we are working under is based on terms of cash or cash equivalency and was in existance before USPAP. Analyzing the effect of non market terms or creative financing would be necessary by a conscientious appraiser even if there was no such thing as USPAP or Fannie Mae.[/quote


Well thanks for clearing that up! Might have been a good idea to determine if such information was even obtainable if not readily obtainable and if either of the above were true then whether the obtainable info and it's typical source was reliable or not.

Oh well, I guess those details aren't as important as the history details of how they were developed -right!

I may be wrong, but I think you missed Greg's point. I believe his point was that USPAP didn't create the need. It was already there.

 

[SANDY]

Stone- could be that I did miss Greg's point, but my point is that it does not matter where it came from, it's in USPAP now. Also it does not matter that it is a fact that such data is extremely important to have as part of any credibel appraisal. The point is that any rule making entity should be be aware of and consider the effects of any rule before making that rule. Things like---is such information readily available and if not how available is it, what sources are available for that information and how reliable might it be etc etc.... Then once that analyses is done if the rule is deemed to be that important even though the data it requires may not be obtainable, it is incumbant upon the rule-maker to develop as concise as possible ways one is to proceed in terms of the level of efforts one must make to obtain the info. Not the "normal course of business" or the what do your peers do" esoteric crap that was developed. Normal course of business and what your peers do can be darned near anything depending on where your at. IMHO it is merely language that is used because of failure to develop meaningful standards or just plain language to use as a gotcha if they feel like you did not meet the minimum requirements.

If those that regulate us want us to carefully and professionally analyze what we do, then I expect the same from them!

 

[CANative]

Stone- could be that I did miss Greg's point, but my point is that it does not matter where it came from, it's in USPAP now. Also it does not matter that it is a fact that such data is extremely important to have as part of any credibel appraisal. The point is that any rule making entity should be be aware of and consider the effects of any rule before making that rule. Things like---is such information readily available and if not how available is it, what sources are available for that information and how reliable might it be etc etc.... Then once that analyses is done if the rule is deemed to be that important even though the data it requires may not be obtainable, it is incumbant upon the rule-maker to develop as concise as possible ways one is to proceed in terms of the level of efforts one must make to obtain the info. Not the "normal course of business" or the what do your peers do" esoteric crap that was developed. Normal course of business and what your peers do can be darned near anything depending on where your at. IMHO it is merely language that is used because of failure to develop meaningful standards or just plain language to use as a gotcha if they feel like you did not meet the minimum requirements.

If those that regulate us want us to carefully and professionally analyze what we do, then I expect the same from them!

Sandy... I can't find a USPAP reference to the requirement you state is in there. However there is USPAP reference that kind of deflates your theory that USPAP meanies are out to get us.

Std 1-1

(c) not render appraisal services in a careless or negligent manner, such as by making a series of errors that, although individually might not significantly affect the results of an appraisal, in the aggregate affects the credibility of those results.

Comment: Perfection is impossible to attain, and competence does not require perfection. However, an appraiser must not render appraisal services in a careless or negligent manner. This Standards Rule requires an appraiser to use due diligence and due care.

 

[ZZGAMAZZ]

Sandy describes much of USPAP verbiage as "esoteric crap." Now THAT'S a SOW that finally makes sense to me. Wish somebody woulda described it to me in such practical nomenclature several years ago . . . sound and fury signifying ................

 

[Mike Boyd]

Call the head dog that had that meeting and present that case. If that person is not reasonable call the state Realtor's association.

You didn't say, but is this a purchase? If so call the two Realtor's involved (which should be done anyway) and get them to get the information involved. If you have to, threaten to adjust for "typical concessions". They do not want you to kill their deal.

Third, tell them you will be contacting the seller and buyer since THEIR Realtor will not cooperate. And if they don't do just that. (Mention this to the head dog too when you call him/her).

Third, make sure you keep a list of the Realtor's who do not cooperate and next time they need something remind them of the cooperation they did not give.

I agree with Tim. Almost half of my real estate carreer was spent as a Realtor and I have established a pretty good relationship with them in my market area. While there are some sales agent more cooperative than others, most will give you the information required as they know, or should know, that they should not **** off an appraiser. But, be nice...not arrogant and demanding. Don't be afraid to "ask them for a favor." However, if you can't get the info and the property in question is superior to any alternative, use it, but explain the situation. That's why only 3 comps is usually not enough. You should be able to make a determination of whether or not there was a concession by analyzing the adjusted indicated values.

 

[CANative]

It's only "esoteric" to those who don't understand it.

 

[SANDY]

Greg: It's there in USPAP-not specifically but it's there along with advisory opinion info on what due diligence may or may not mean. I think that this issue is of such importance that it does deserve some fleshing out in USPAP even if only in the form of an advisory opinion.

What does careless or negligent mean? Define due diligence or due care.

Analysis of sales data can yield numeric results, but the numbers lack real meaning without an understanding of the market conditions that generated the sales involved. Without an understanding of what the market conditions were at the time of a sale, as well as the conditions of a particular sale, an appraiser cannot reasonably conclude that the sale price, or any element of comparison based on that price, is a reliable indicator of market value.

So ok-I agree with the above but deal with thefact that this type of non-specific info may not be available or readily available and give me some examples of a very very very well known problem out there in the field of what should I do if the realtors are saying that such info cannot be disclosed to us because providing it would violate their ethics or privacy laws. USPAP writers are very aware of this problem so why not help us alittle and clarify it with some specifics?