Recorded sale price vs MLS sale price

[Lost Cause]

It does. A sale is not a "comparable" unless, and until, confirmed. No credible confirmation? - not a usable comparable.

I agree completely Mike. But we know there are many appraisers who do essentially no confirming, as stated by any number of posters right here on the Forum.

 

[ockyappraiser]

I would be taking copies of the deeds to my local MLS and insisting they change the contract prices. Our MLS has an on line system to report things just such as this.

Come at this another way. . .you are hired to do a field review and find an appraiser that has used several sales that are hundreds of dollars higher then what is actually on the deeds. I would be red flagging this. I can guarantee the company that hired the reviewer would be filing complaints with the state board and turning the appraisal over to legal.

 

[Terrel L. Shields]

These sales are done this way for tax purposes usually. The notion of hiding a sales price isn't out of the question. If I use the MLS price, then I would explain that there is a calculated price that is lower.

My take on high end property and why I do not do them, is that there is a very big element of this kind of garbage and in reality, there is a case to be made for a bunch of "Blue Sky" - which is an argument that has been made upon occasion. ALL property will contain a BEV.

There is no way that many of these super priced properties A - COST (plus land value) what they bring. (negative depreciation???) or B - can you really allocate this to the LAND? (A very von Thünen sort of idea.)
http://geography.about.com/od/urbaneconomicgeography/a/vonthunen.htm

Someone is giving a premium for the ambiance or status of a property. That is nearly impossible to quantify. It is like trying to value a Rembrandt that someone just discovered in their attic in Amsterdam last year...as a sort of one-of-a-kind property, the sky is the limit...or rather the pocketbook of someone who just has to have it.

One of the "Koch Brothers" that isn't active in the political "Koch Brothers" is a big buyer of Western Memorabilia. For people like that, if they want it, then price is no object. They will outbid any museum in the world.

So we have this whacky upscale market that is the result of the proliferation of the extreme wealthy class in America and the huge number of new buyers of that sort of property....people with no real concept of "value" because they come from China, Venezuela, or are fleeing high taxes like the French. Otherwise, they are filthy rich Americans who made it on Wall Street or Silicon Valley - the nouveau riche who define the very words "conspicuous consumption".

I really don't think "Value" has any meaning in such a market. It is a very inefficient market where fad and style may dominate the thinking over "value".

 

[J Grant]

Depends what end of upscale one is talking about. I do, or rather did, many high end homes . Like any other market, there are elements of value and buyers have choices. One choice that many appraisers overlook is that for sf homes , wealthy buyers often have the option of buying a dated if livable house for a few mil or whatever they sell for, tearing it down and building new. They often like to remodel almost as a hobby ( and because they want to their taste ). They may buy a perfectly well appointed house or condo, maybe only 12 years old and gut it and remodel. They do what they do...one has to understand the sub market of high end homes and what the value is relative to an area...certain streets or sections sell for a mil or so more, pocket change. ( at that level)

The thing is that I find almost every level of res work has its share of games ( with the least games found in middle of the road mid priced properties)

The low end has property flips and high LTV FHA financing and REO to deal with. The new construction has builder concessions and nutty builder charges for upgrades and lot premiums to deal with. And the high end property sales, some of them, (not all), have their version of games..separating out personal property and not disclosing what it is, buyers paying RE commissions and no disclosure of amount of commission , diff prices on MLS then closed etc.

Some appraisers understand the games played in different segments of market and some don't, or they overlook that the definition of market value references prices unaffected by concessions or special or creative financing/terms. This increased scrutiny is making me more wary of appraising in markets with too many games going on. Which leaves what assignment, exactly? That one middle class middle price home in contract at MV with conventional financing. That one assignment a month I can work on with no worries.