Reconsideration of Value

[J Grant]

There is NO guidance , advisory opinion, or USPAP statement referencing an appraiser can't be precise enough to be a small % off a SC price. If such a link or source or advisory FAW exists that says that, please provide it. I have not seen that anywhere except here on the board. Luckily I trained with two very good SRA's who never mentioned such a ridiculous thing.

It is circular logic meant to serve itself.. An appraiser is not good enough to be "that precise" to be 2.5 % off a SC price, because a SC price at AL terms is a good indicator of MV, and it is a good indicator of MV because an appraiser is not good to be that precise to be off it by a small percent. Okay, send in the clowns!

An appraiser's opinion of MV is just as precise at 350k as it is at 341k. Either one is a finite specific dollar amount. Either one has to be well supported and credible, apart from what the SC price is.

I can see the argument that if appraiser opined 349k, or even 348k, that with an AL contract, make the SC price of 350k the reconciliation point. But when a relatively substantial $ comes into play, and to market participants at this price range,, especially in FHA when buyers are cash poor, anything over 2k is substantial (to them).

I am all for coming in at SC price when the preponderance of market evidence leads to that. Or even in a close tie, when enough market credible support leads to the SC price as reconciliation point. But there are times when the OMV most credible $ amount is best supported as a $ amount below the sC price , and that can be a relatively low percent off.

Since the SC price is not an official MV benchmark, and even you guys admit it can't be a target, by what logical rational is a OMV being 2.5 % off a SC price "wrong"?

 

[residentialguy]

There is NO guidance , advisory opinion, or USPAP statement referencing an appraiser can't be precise enough to be a small % off a SC price.

There's no guidance, advisory opinion, or USPAP statement referencing an appraiser can't be drunk on the witness stand, either...but if you want anyone to take you seriously, I suggest you don't.

 

[residentialguy]

Since the SC price is not an official MV benchmark, and even you guys admit it can't be a target, by what logical rational is a OMV being 2.5 % off a SC price "wrong"?

No one ever said that, JG. That's just your tongue flappin in response to your poor reading comprehension.

Here's what was said. The contract better be out of the reasonable range of value where all points are just as probable.

 

[J Grant]

There's no guidance, advisory opinion, or USPAP statement referencing an appraiser can't be drunk on the witness stand, either...but if you want anyone to take you seriously, I suggest you don't.

Seriously, where did this challenge to an appraiser being off by a small % off a SC originate from...the fact is, there is no official source, FAQ USPAP to support it. Seems like vodoo some mentors spread around. And yes, appraisers should consider/must consider a pending SC, please take that off the table as a straw argument. We are all on board with that.

 

[residentialguy]

Seriously, where did this challenge to an appraiser being off by a small % off a SC originate from...the fact is, there is no official source, FAQ USPAP to support it. Seems like vodoo some mentors spread around. And yes, appraisers should consider/must consider a pending SC, please take that off the table as a straw argument. We are all on board with that.

Common sense, JG....common sense.

 

[J Grant]

No one ever said that, JG. That's just your tongue flappin in response to your poor reading comprehension.

Here's what was said. The contract better be out of the reasonable range of value where all points are just as probable.

You keep tap dancing around words and the way sentences are written to avoid the truth of the issue. No matter how I, or anyone who disagrees with you words something, you attack the wording instead of dealing with the issue.

Challenges are made to appraisers opining a few % below A SC price based on certain points about precision, being that good to come close to a SC price, a SC being good indicator of MV etc. Which might apply in certain cases but certainly not in all. These challenges never ask in any serious manor why the appraiser opined where they did, what the comps were and issues were that led to their OMV X% off the SC price. They go right for the attack of of how can an appraiser come so close to a SC price, without any genuine attempt to dialogue with the appraiser of what credible support they found in the market to opine where they did.

 

[residentialguy]

You keep tap dancing around words and the way sentences are written to avoid the truth of the issue. No matter how I, or anyone who disagrees with you words something, you attack the wording instead of dealing with the issue.

Challenges are made to appraisers opining a few % below A SC price based on certain points about precision, being that good to come close to a SC price, a SC being good indicator of MV etc. Which might apply in certain cases but certainly not in all. These challenges never ask in any serious manor why the appraiser opined where they did, what the comps were and issues were that led to their OMV X% off the SC price. They go right for the attack of of how can an appraiser come so close to a SC price, without any genuine attempt to dialogue with the appraiser of what credible support they found in the market to opine where they did.

It is a legitimate response. If I were in court against an appraiser, I'd blow his credibility away by such arrogant precision.

 

[J Grant]

Well. If that appraiser came to court with USPAP and all supportive other sources about not targeting value directions you'd have a hard time ...

 

[J Grant]

$341,000 really suggests a precision that no appraiser can possibly have.

You are not the only one with this nonsense message. The directive is an accurate opinion of value, not a blurry rounded one. That said, yes common sense is in play, and rounding off a trailing number such as $340,841 to a whole number of 341k is very different than adding 9k in value to reach 350k.

341k and 350 k are equally precise. None of us can know if the OP's 341k is the best credibly supported value. I'd presume he thought it was. Making it 350k does not in and of itself mean the OMV is more credibly supported or less precise. It is a different dollar amount.

At the higher price brackets, participant tend to negotiate in larger $ amounts and rounding takes on a different context , let's stay with this price range of the OP post.

 

[J Grant]

None of us can know if either 341 k, or 350k is the most credibly supported OMV for subject. Maybe it is 330k, or maybe it is 360k... we don't know..

The point is if an appraisal and the OMV are challenged or reviewed, the OMV has to be defended on support from market and how it was developed. It is not going to matter if the OMV was a round number or a not round number, nor whether it matched the SC price.