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

[J Grant]

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

Leave the attorney advice for another thread topic... (imo )
I have problems with this line of writing though am sure your clients are okay with it as most clients are not into USPAP and just want to know in a sale, it did or did not appraise at the SC price. But your statement is problematical and leads to a slippery slope about what we are doing.

We are appraising a property, we are not appraising a sale contract. So to say the SC price falls within your adjusted range is wrong... your point value falls within your adjusted range.
( If you also want to address in the reconciliation SC price ...below. example .

" The adjusted range of value was between $680,000 and $700,000. The subject is most similar to comps 1 and 2 , which adjusted to $688,000 and $693.000. They are the most equivalent to the subject in upgrades and are very recent sales, therefore more consideration is given comps 1 and 2 for a market value opinion of $690,000 with comps 3 and 4 adding support . The sales contract price of subject as an arms length transaction with adequate market exposure is an additional indicator for the reconciliation of the opinion of market value" "

Most times I don't bring up the subject SC price when it is the same $ amount as my OMV but sometimes I do...I suppose if we talk about it when we opine above or below then makes sense to mention it when same $ amount .

 

[Sadie]

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.

When I come in below the contract price, I say It appears the buyer had a greater than typical interest in the property.

 

[alebrewer]

Are you sure the request was to 'add comments why you didn't hit the sales price'? Not saying that wasn't the request - I'd just be very surprised if it was worded that way... USPAP requires the appraiser to analyze all listings and agreements for sale of the subject property (within given timeframes). I would think that part of that analysis would involve discussing why the contract price doesn't match up with your EMV. So, to rephrase the request, "Please add commentary explaining your analysis of the purchase contract which, in this case, is not supported by your EMV.' Same question - just worded in a compliant manner and, as worded, a completely legitimate request (assuming you hadn't already discussed that in the report)...

 

[TMG]

The stage is set. Sales prices are soaring, and that gives those who are staying LOTS of equity!! The economy is ready to tank, so Joe Homeowner will have to start using his house like an ATM.

Give me Plummet for $500 please.

 

[Deleted member 152047]

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.

I just worked on a retail center and when the buyer is providing the DD items he tells me that the seller didnt provide some info prior to it going under contract. He actually provided an excel and support for why the price should be lower. Well....I agreed that he was overpaying by double-digit percentage. The lender comes back to me to push values. What a frustrating market. Now I will need to waste a day further supporting my values for folks that didnt read the damn appraisal.

 

[glenn walker]

Leave the attorney advice for another thread topic... (imo )
I have problems with this line of writing though am sure your clients are okay with it as most clients are not into USPAP and just want to know in a sale, it did or did not appraise at the SC price. But your statement is problematical and leads to a slippery slope about what we are doing.

We are appraising a property, we are not appraising a sale contract. So to say the SC price falls within your adjusted range is wrong... your point value falls within your adjusted range.
( If you also want to address in the reconciliation SC price ...below. example .

" The adjusted range of value was between $680,000 and $700,000. The subject is most similar to comps 1 and 2 , which adjusted to $688,000 and $693.000. They are the most equivalent to the subject in upgrades and are very recent sales, therefore more consideration is given comps 1 and 2 for a market value opinion of $690,000 with comps 3 and 4 adding support . The sales contract price of subject as an arms length transaction with adequate market exposure is an additional indicator for the reconciliation of the opinion of market value" "

Most times I don't bring up the subject SC price when it is the same $ amount as my OMV but sometimes I do...I suppose if we talk about it when we opine above or below then makes sense to mention it when same $ amount .

No I do not want to be precise or hit a Point of Value - I want a value that is adequately supported by the adjusted Sales comparables ! We are not dealing with $5,000 to $30,000 variances-We are dealing with $50,000 plus varinaces and in some cases $100,000 or more.

 

[Sandra Koutsopoulos]

CDPE and other Short Sale real estate training sites are back now. SOME folks know which way the wind is blowing. Soon all these deferred mortgage payments will be chomping on the heels of folks now used to not paying their house payments, and who likely don't have increased income to catch up payments. At the pinnacle of air-supported 'market values', and with the looming shadow of interest rate increases, the F/C's will likely under price retail, and level off or push prices down as buyers will then have more affordable choices. So, let the chips fall where they may, support market value without unduly reaching into the air to give stamp of approval to unsupported sale prices. People are in a frenzy to buy, usually feeling they won't see these low interest rates again, but real estate is more than interest rates. In 2004, buyers were overpaying too, afraid that rising prices would price them out of home ownership forever. That wasn't true either, as prices all across the country plummeted and settled lower, taking a decade or more to reach pre-recession levels.

 

[Overimprovement]

Asking an appraiser to jump through hoops to explain why their market value does not equal contract price is the ultimate example of stupid irony. Isn't that exactly the reason appraisals are ordered? Note--that is a rhetorical question.

SMH

 

[jay trotta]

So why is there a Question on an "Opinion of Value" as supported ??

What does the AVM show ??

What Does Big Data say ??

What does Zillow say ??

Overbidding on a property, Ooops


IF this isn't' numbers manipulation..........hope ya'll are keeping all those requests in your file

 

[glenn walker]

Are you sure the request was to 'add comments why you didn't hit the sales price'? Not saying that wasn't the request - I'd just be very surprised if it was worded that way... USPAP requires the appraiser to analyze all listings and agreements for sale of the subject property (within given timeframes). I would think that part of that analysis would involve discussing why the contract price doesn't match up with your EMV. So, to rephrase the request, "Please add commentary explaining your analysis of the purchase contract which, in this case, is not supported by your EMV.' Same question - just worded in a compliant manner and, as worded, a completely legitimate request (assuming you hadn't already discussed that in the report)...

I have never had a Clients engagement letter ask for any explanation as to whether a Purchase Price is supported or not supported. That would be deemed as a directive and a "wink-wink" to the appraiser to hit the Bulls-Eye and nobody wants a regulator seeing that. No I digress : J.G. likes to conflate and play word games and she is hyper sensitive to the word market value and how its defined and gets upset if someone calls a Purchase Contract a Sales Price . I don't get twisted up about terms which are used interchangeably in the Real Estate Industry As for USPAP it's silent on final opinions of value and all they say is the Appraiser has to Develop A Scope of Work that produces a creditable value. There is no USPAP road map on many of these other issues. Also in USPAP the word credible is also a word that can be loosely defined. What may be Credible to me-may not be credible to the Client or user and that's where all these crazy ROVs Tidewaters and complaints come from . The borrower says the appraiser has no clue as to what he/she is doing and in some cases they are right but in most the are wrong-but credibility is all in the eyes of the beholder and whether it's credible or not will be determined hopefully by someone or some group who can stay within the white lines and this is when its critical to have a simple but clear final reconciliation so the client-User-reader-reviewer can understand why you arrived at that number.

I have seen appraisers use terms like A reasonable Range of Value was $350K to $365K or a Point of Value being $360K and I have seen the word-Adequate-and also Well Supported.

In reviews we had many appraisers that never presented any reconciliation or explanation on how they ended up with a Final Value and the-dirty little truth that we all know is many have no idea themselves and thats why Lenders Give Appraisers Purchase Contracts and MLS gives them Sales Prices. Finally most appraisers are not telling the truth when they say they pay no attention to a Contract or Sales price -If that was true 85% or more residential purchase agreements would not be coming in on the Bulls-Eye. The important thing is the appraiser wants His/her Final OMV to be Adequately- Supported-Reasonably-Supported-Well Supported- or Simply Supported but in the final end of the day the appraiser has to be able to be defend his/her Value and in a Post Closing Review- A buy Back or a State Board action nobody is going to be playing silly word games and when the final bell rings it better just be Supported : ) LMAO