ROV - "add comments why you didn't hit the sales price".

[TMG]

Well...it was listed for $750k, 30 buyers bid it up to $850k. The highest sale in the tract is $810k. And...the listing says it's 1,763 sf, but when you take out the non permitted garage conversion its actually 1,475sf. Came in at $835k

I'm very close to declining all overbid purchases for awhile.

 

[Dublin ohio]

Well...it was listed for $750k, 30 buyers bid it up to $850k. The highest sale in the tract is $810k. And...the listing says it's 1,763 sf, but when you take out the non permitted garage conversion its actually 1,475sf. Came in at $835k

I'm very close to declining all overbid purchases for awhile.

If I did that. I would not have done a purchase for the past 3 months.

 

[Terrel L. Shields]

A 1500 SF house with a garage conversion... I have a contract for $170,000. It came in at $70,000...go figure

 

[sputnam]

It's akin to the times when the Buyer overpaid and the Lender wanted me to comment on why the Buyer overpaid. Pretty hard to do that since I never met the Buyer. One time I recall, the Buyer had invented something, had a lot of money, and his wife wanted THAT house. I usually refuse to comment on this kind of thing and remind them that my opinion is of MARKET value and is based on the best information available at the time of the appraisal.

In your case, it sounds like you have a hot market and need to find some way to assess and support those changes.

 

[J Grant]

Unless there is a specific reason for that deal, I have a standard drop in comment "The SC price is above the MV opinion, which could be due to individual negotiation, other possible offers, inventory shortage and low interest rates. "
"The appraisal market value opinion uses the most similar and recent sales as adjusted to derive the market value opinion. The appraiser also has considered additional sales and market conditions . "

The RE agent "comps" they give me are typically superior properties that sold for more high $- supposed to justify the high sale price for an inferior subject. The last one -the RE agent gave me 5 sales , - the subject was a 15 year old avg upgraded house,...4 of the 5 sales she gave me were C 1 , brand new, very upgraded brand new houses.

 

[glenn walker]

Unless there is a specific reason for that deal, I have a standard drop in comment "The SC price is above the MV opinion, which could be due to individual negotiation, other possible offers, inventory shortage and low interest rates. "
"The appraisal market value opinion uses the most similar and recent sales as adjusted to derive the market value opinion. The appraiser also has considered additional sales and market conditions . "

The RE agent "comps" they give me are typically superior properties that sold for more high $- supposed to justify the high sale price for an inferior subject. The last one -the RE agent gave me 5 sales , - the subject was a 15 year old avg upgraded house,...4 of the 5 sales she gave me were C 1 , brand new, very upgraded brand new houses.

I deal with it upfront in my reconciliation .

Example: The appraiser selected four closed sales comparables and two pending sales under contract. After they were adjusted the indicated range was between $645,000 to $675,000 which did not ( adequately) support the Subjects contract price of $690,000 , The appraiser after considering the current strong market trends and which comparables were most similar has arrived at a final OMV of $675,000 which is at the higher end of the range and well supported by the data and analysis presented in the report

 

[J Grant]

I deal with it upfront in my reconciliation .

Example: The appraiser selected four closed sales comparables and two pending sales under contract. After they were adjusted the indicated range was between $645,000 to $675,000 which did not ( adequately) support the Subjects contract price of $690,000 , The appraiser after considering the current strong market trends and which comparables were most similar has arrived at a final OMV of $675,000 which is at the higher end of the range and well supported by the data and analysis presented in the report

I like the statement except I would not use terminology adequately support SC price....because it makes it sound like the appraisal was about supporting a SC price and somehow "failed" at doing so...the appraisal supports our market value opinion. When the OMV is same as SC price, the contract was additional support for our OMV (not the other way around )

 

[Terrel L. Shields]

The SP is here
the MV is there
Never the twain shall meet
This is what I shall tweet

 

[glenn walker]

I like the statement except I would not use terminology adequately support SC price....because it makes it sound like the appraisal was about supporting a SC price and somehow "failed" at doing so...the appraisal supports our market value opinion. When the OMV is same as SC price, the contract was additional support for our OMV (not the other way around )

Actually I want to support the SC Price if it's adequately supported and at the same time I want the reader and user to know that the data and analysis did or did not support it. In the "reverse" lets flip it over and pretend the SC Price was $690,000 and my adjusted range of comparables ranged between a low of $680,000 and a high of $700,000. My reconciliation probably would have read something like **** The SC Price falls within the range of value "hence" the SC Price is considered market value. I want the reader and user to stay in the same lanes as me and they think in terms of what we call the contract price and what they call the sales price.

In A ROV my best line of defense if the ROV is not warranted is to ask for comparables that support their Sales Price. If they give me some comps that maybe I had missed or over-looked then I am going to adjust them and see if they help my value fall within the range of value. If so I am open to a higher value BUT usually they are using Gross Sales Prices and not ones that had been adjusted and sometimes ones that actually lower the value after adjusted.

The word adequately supports- removes preciseness or the implication the appraisers final opinion of value is the only one that could be correct and it's good enough. This is also used in in defense of values in reviews or in litigation. The appraiser wants to appear to be not overly heavy-handed or believing his value is the only possible value. That was advice years ago in a lawsuit where I was defending a value. The attorney told me to never get myself into a corner-defending a single point of value --Especially if that Point of Value was the ones the buyer-seller and lender all liked : ) LMAO

 

[Tim Hicks (Texas)]

$835,000 for a 1475 sf house. Just another fine reason everybody is leaving CA.