J Grant
Elite Member
- Joined
- Dec 9, 2003
- Professional Status
- Certified Residential Appraiser
- State
- Florida
Quote:
It confuses me to think I could come in at $170k and then go back a week after they move in and come in at $190k. Was I not suppose to be appraising "market value" in both instances?
Well, appears you did not understand the purpose of appraisal...A MV purpose of appraisal is the same purpose appraisal whether the subject is owned by a lender, or a private party. The MV definition does not discrminate or instructor to discriminate or change the methodlolgy of developing value according to who owns the subject.
That would mean you under-appraised it the first time....
It is unkown if the OP under appraised it the first time, but they misunderstood the assignment the first time.
This notion of Market Value varies within the eyes of the beholder and that the METHOD or terms of sale changes the definitoin of MV like George suggests is nonsense...
I don't think that is what George suggested. He stated the market changes, and market conditions change, not that the definition of MV changes.
The price of Oranges has a retail price and a wholesale price that is based on local market condition.
There is no correlation in comparing oranges, or any retail consumer goods to houses / property and the way people buy and sell property.
A bank is never a "typical" seller.
The MV def does not exclude banks as a seller. When a bank become a seller, and their actions are representative of enough sellers in a market area, their actions become "typical" for that segment of the market. Banks are pretty predictable and easy to read as sellers, and their patterns are more uniform and "typical", then the actions of private party owners.
Private parties , who may seem "typical", are actually a diverse group whose motivations are all over the place, from desperate/distress to holding out 5 years to get the highest price .
A bank may or may not get a price that is proxy
of MV, but it still does not nor ever will meet the definition used by Fannie Mae.
The Appraisal foundation says otherwise, ...as well as Fannie in their own adivosry letter on use of REO sales (which are acceptable to them)
Graaskamp saw the problem decades ago and suggested that appraisers should be responsible for reporting the "Most Probable Price" which would allow the appraiser to basically ignore the motivations of buyers and sellers and try to determine what the most likely price would be in the circumstance of the sale.
I agree with above, the MV def could be improved on and the motivations broadened to allow for any motivations that is represented by enough particpants in a market area to form a credible trend.
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It confuses me to think I could come in at $170k and then go back a week after they move in and come in at $190k. Was I not suppose to be appraising "market value" in both instances?
Well, appears you did not understand the purpose of appraisal...A MV purpose of appraisal is the same purpose appraisal whether the subject is owned by a lender, or a private party. The MV definition does not discrminate or instructor to discriminate or change the methodlolgy of developing value according to who owns the subject.
That would mean you under-appraised it the first time....
It is unkown if the OP under appraised it the first time, but they misunderstood the assignment the first time.
This notion of Market Value varies within the eyes of the beholder and that the METHOD or terms of sale changes the definitoin of MV like George suggests is nonsense...
I don't think that is what George suggested. He stated the market changes, and market conditions change, not that the definition of MV changes.
The price of Oranges has a retail price and a wholesale price that is based on local market condition.
There is no correlation in comparing oranges, or any retail consumer goods to houses / property and the way people buy and sell property.
A bank is never a "typical" seller.
The MV def does not exclude banks as a seller. When a bank become a seller, and their actions are representative of enough sellers in a market area, their actions become "typical" for that segment of the market. Banks are pretty predictable and easy to read as sellers, and their patterns are more uniform and "typical", then the actions of private party owners.
Private parties , who may seem "typical", are actually a diverse group whose motivations are all over the place, from desperate/distress to holding out 5 years to get the highest price .
A bank may or may not get a price that is proxy
of MV, but it still does not nor ever will meet the definition used by Fannie Mae.
The Appraisal foundation says otherwise, ...as well as Fannie in their own adivosry letter on use of REO sales (which are acceptable to them)
Graaskamp saw the problem decades ago and suggested that appraisers should be responsible for reporting the "Most Probable Price" which would allow the appraiser to basically ignore the motivations of buyers and sellers and try to determine what the most likely price would be in the circumstance of the sale.
I agree with above, the MV def could be improved on and the motivations broadened to allow for any motivations that is represented by enough particpants in a market area to form a credible trend.
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