Reasonable Exposure Time

[J Grant]

It' can't be just generic REO vs non REO , properties have to be phsyically alike in condition for a comparison. A house with condition problems and a good condition house are not comps for each other, REO owned or not.

There is no such thing as "REO MARKET VALUE", if the assignment is a market value opinion purpose. MV is what we are developing for for the subject, whether the subject is REO owned, or not.

The second value opinion in a limited days marketing time on the REO addendum still does not mean "REO market value," , they are asking for an opinion of most probable price with a marketing time of X days . .Sometimes the price may not be lower if X days are the same as prevailing and reasonable, estimate best you can, find other sales that sold in X days, whether REO owned or not.

If you want to adjust comps down for subject being vacant lacking curb appeal that could be done but you would not adjust comps down for sale conditions, The subject is selling under the MV definition sale conditions in a MV purpose appraisal.

 

[Meandering]

A shorter marketing time means a lower price. .

Your marketing time, is driving your value, not your value is driving your marketing time.

Add a bigger discount to the REO to get it to or under the 90 day requires limit. .

Discounting? Does that mean the price is an incentive, and therefore, Fannie's market value definition is now in question?

This is needed because the normal market time for an REO as you stated was 90 to 180, (the average REO market value). To get it lower larger discount. For example, if may area non-REO small ranch properties say sell for 100,000 in 180 days, REO properties sell for $60,000 in 90days. The condition of buyers perception of value is a 40% discount. .

Is it the condition of buyer's perception? or is it buyers motivated by lower list prices?

Track several sales of REO's compared to simiar sized non-REO's and look for those with more problems and see the extra discount. The long spreadsheet method.

Aren't discounts incentives? After all you're discounting from something, discounting from the market indicated value to get too a faster than market typical selling time, therefore, the shortened market exposure is driving your value, which is not covered by USPAP, when actually USPAP says your time frame is opined after your value has been opined. And Fannie's MV definition on the URAR is that the time frame is reasonable to achieve market value of those 'TYPICALLY MOTIVATED" buyers, at a PRICE that is NOT affected by undue stimulus, such as maybe.................DISCOUNTING.

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[Meandering]

It' can't be just generic REO vs non REO properties have to be alike in condition for a comparison. A house with condition problems and a good condition house are not comps for each other, REO owned or not.

Which has as much to do with the house with the pink front door as the barn with a rollaway door.

Nothing to do with anything here.

But if you want to attack every problem with what the comps are first, then first ascertain the property rights that are going to be conveyed with that REO before you decide on condition.

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[DWiley]

Why is it so very important that the REO addenda form says market value, for the second set of values?

Is that what you are saying is okay?

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No, that is NOT what I am saying.

What the form says is meaningless without context. That is why USPAP requires the valeu definition to be in the report.

So, what i am saying is that in most REO assignmenst one must report multiple values, bit the standard 1004 contains only one value definition. If other types of value are developed, the the applicable definition(s), and source citation(s), should be added to the definition already in the form.

If one reports a "60-day market value" then one cannot rely on the pre-printed definition to meet the USPAP requirement to provide the value definition in the report. The rpeort has no pre-printed definition for "60-day market value." The only definition on the form is one that allows for "reasonable exposure." So, the rpeort must be supplemented to include the applicable definition(s) needed.

The main point is that there is no prohibition against adding and using any definition of value tha the client needs. As taught in the USPAP courses, the proper value definition to be used in an assignment is driven by the intended use and intended user.

 

[Mr Rex]

No, that is NOT what I am saying.

What the form says is meaningless without context. That is why USPAP requires the valeu definition to be in the report.

So, what i am saying is that in most REO assignmenst one must report multiple values, bit the standard 1004 contains only one value definition. If other types of value are developed, the the applicable definition(s), and source citation(s), should be added to the definition already in the form.

If one reports a "60-day market value" then one cannot rely on the pre-printed definition to meet the USPAP requirement to provide the value definition in the report. The rpeort has no pre-printed definition for "60-day market value." The only definition on the form is one that allows for "reasonable exposure." So, the rpeort must be supplemented to include the applicable definition(s) needed.

The main point is that there is no prohibition against adding and using any definition of value tha the client needs. As taught in the USPAP courses, the proper value definition to be used in an assignment is driven by the intended use and intended user.

 

[Meandering]

......

 

[Meandering]

No, that is NOT what I am saying.

What the form says is meaningless without context. That is why USPAP requires the valeu definition to be in the report.

So, what i am saying is that in most REO assignmenst one must report multiple values, bit the standard 1004 contains only one value definition. If other types of value are developed, the the applicable definition(s), and source citation(s), should be added to the definition already in the form.

If one reports a "60-day market value" then one cannot rely on the pre-printed definition to meet the USPAP requirement to provide the value definition in the report. The rpeort has no pre-printed definition for "60-day market value." The only definition on the form is one that allows for "reasonable exposure." So, the rpeort must be supplemented to include the applicable definition(s) needed.

The main point is that there is no prohibition against adding and using any definition of value tha the client needs. As taught in the USPAP courses, the proper value definition to be used in an assignment is driven by the intended use and intended user.

Shall we start again?
The REO addenda is the addenda to the URAR.
The URAR has Fannie's Definition of Market Value.
The REO addenda asks for Market value (which is defined in the report on the URAR) along with a reasonable exposure time. No problem.

But then the REO addenda asks for the Market Value with a client defined exposure time.

No can do.

The 1004 contains the market value. You want other values? Fine, not a problem, but not on a form that says they are market values, the client is dictating the exposure time, and we are signing a certification that we complied with USPAP.

Fix the REO addenda, or ask for a narrative. We can do the 1004 for market value, and narrate any other value you would like, with any other verbiage that is not already defined in USPAP. You want us to say, that the opinion is a 30 day value developed under the HC that the subject property would have had 30 days or less on the market prior to the effective date, NO PROBLEM.

But you want us to fill in two different values and call both of them market, while saying the client can dictate market exposure, while USPAP says otherwise, and want us to certify we followed USPAP, well, NO!

.

 

[Mr Rex]

See #66
I think that's what I said earlier. There are typically more than one type of "market value" to be addressed in any REO assignement, and per USPAP these different versions of "market value" must be addressed and defined. If exposure time is a component of the definition of "market value" used, then "the appraiser must also develop an opinion of reasonable marketing time linked to that value opinion" (or vice versa). It is in USPAP, but for some reason Marion has taken the road less traveled here and IMHO is wrong. Remembering 7th grade algebra or simple excel nomenclature for what goes into the parantheses and in what order etc is helpful in these situations. REO liquidation and disposition values are subsets of the large definition of market value.

 

[Pittsburgh Pete]

trying to reason with Marion = pounding one's head against the wall! Alternate theory is that she's just trying to churn her post count.

 

[Mr Rex]

trying to reason with Marion = pounding one's head against the wall! Alternate theory is that she's just trying to churn her post count.

Pete, for once we agree. I was about to say she was channeling her inner JGrant in an effort to win the monthly merit badge for most posts. Must be a girly thing.