Sales Price Addendum After Appraisal Submitted

[J Grant]

A change in concession would not affect value. It is just an example of a contract change having nothing to do with price ( I should not have had concession in same sentence as a change affecting value)

The USPAP section is confusing...a change that would affect value, as of the date of the change ( after appraisal), or back as of the effective date? For example if seller agrees to replace older section of a roof, which might increase value, the value back on the as of effective date was based on the older roof.

 

[EddieB]

Maybe the OP will return and end this speculation

 

[residentialguy]

A change in concession would not affect value. I

so if you found out that your 2 best comps had 10k in concessions that affected their price by $10k...that would not affect value???

 

[J Grant]

so if you found out that your 2 best comps had 10k in concessions that affected their price by $10k...that would not affect value???

Finding out after the fact a mistake about sale price or concessions of a comp affecting their sale price could have affected our value opinion since we base our value opinion on large part on sold comps.Which means if appraiser did not realize concessions affected price on sold comps when developing the appraisal, the appraiser screwed up.

That is different than parties changing terms of a subject contract after the appraisal, such as adding or taking away concessions, since the subject is supposed to be appraised not affected by concessions (no matter if they are in the contract or not)

 

[hastalavista]

The USPAP section is confusing...a change that would affect value, as of the date of the change ( after appraisal), or back as of the effective date? For example if seller agrees to replace older section of a roof, which might increase value, the value back on the as of effective date was based on the older roof.

I don't think it is confusing. It just isn't specific (as one would expect it to be).
Your example is one reason why a change in the contract could affect assignment results. Here's another: Unbeknownst to the appraiser, after the inspection, the buyers in their due diligence process had the home inspected and there was a $10k foundation repair discovered. This condition was unobservable, and there was no way the appraiser could have identified this as an issue at the time of the inspection... and no expectation that the appraiser would have identified it in the normal inspection routine.
The contract is amended to reflect that condition. It existed as-of the date of the inspection. With that new information, the appraiser would likely revise his/her value opinion.

The key in your and my example isn't the change in the contract price. The key is why was the contract price changed? And that is why the USPAP requires a review of the contract; because it may provide information not readily collected by other means.

 

[J Grant]

Res Guy "So if you found out that your comp prices on your report were incorrect, that wouldn't affect your value?"

Since comp sale prices are done deals, thus if a value opinion was based in part on an incorrect sale price , the appraiser screwed up. Hopefully they can correct that if given the opportunity. .
↑
T-Shouldn't, or you did it wrong

have to disagree with you here, Terrel. The contract is also a market indicator of value that you need to consider, (not to be confused with using it as a target) therefore an appraiser would be violation of USPAP by ignoring a significant market indicator of value. Often my point value is based up on a verified contract of the subject. If, for example, the price were to change...just as if comp 1 price were to change...that may affect my OMV. Why do you think the sale price of the subject pops up in your SCA?

The SC price of subject, is NOT a done deal proven by the market such as a closed sale price. The SC price of subject, when buyer applies for financing, is contingent in fact on going forward by the appraisal ! So when the appraiser bases such a significant reliance of their value opinion on the SC price itself, there was no real vetting of the property for market value based on other indicators, since the MV opinion was based on large part on the SC price- a circular reasoning which is though you don't want to admit it, number hitting.

Reconciling at a SC price with other credible support for the value, is not the same thing as number hitting. Number hitting means not much else supports the MVO except the SC price itself, or shaky not credible support such as a non similar cherry picked high sale comp dragged in

It is such a large degree of reliance on the MVO by the SC price itself that results in your stating you would change your value opinion if the SC price changed (with no other material changes to property, just the SC price change).

 

[Terrel L. Shields]

Any post-appraisal date event is not relevant to your value. If such info, like @Denis DeSaix 's example, then the appraisal needs updated. If the date of appraisal stays the same, then based on the information, no change should be done. Otherwise use a date of appraisal that post-dates the withheld info.

 

[J Grant]

I don't think it is confusing. It just isn't specific (as one would expect it to be).
Your example is one reason why a change in the contract could affect assignment results. Here's another: Unbeknownst to the appraiser, after the inspection, the buyers in their due diligence process had the home inspected and there was a $10k foundation repair discovered. This condition was unobservable, and there was no way the appraiser could have identified this as an issue at the time of the inspection... and no expectation that the appraiser would have identified it in the normal inspection routine.
The contract is amended to reflect that condition. It existed as-of the date of the inspection. With that new information, the appraiser would likely revise his/her value opinion.

The key in your and my example isn't the change in the contract price. The key is why was the contract price changed? And that is why the USPAP requires a review of the contract; because it may provide information not readily collected by other means.

Okay, I agree with your assessment per your example...but if this were to transpire, aka new information comes to light post appraisal that would change the value , would a new assignment take place, if the value is to be changed? Because this foundation issue was unknown to the appraiser as of the effective date, and the appraiser can only base their MV opinion on what was known to them as of the effective date ( even if the condition existed as of effective date, due to limits of appraiser expertise it was not known or discovable to them at the time of inspection.

But if a new assignment is not needed, imo the appraiser would be within their rights to charge additional (though USPAP does not care about that lol), to go back retroactive and change value as of same eff date, due to information that became known about property after the effective inspection date ...because that information was not available to the appraiser as of the inspection date. Might need new comps if a value change, certainly new consideration of condition and impact on value.

 

[residentialguy]

The SC price of subject, is NOT a done deal proven by the market such as a closed sale price.

it doesn't matter. My opinion is swayed greatly by verified contracts and even can be swayed by active listings.

 

[residentialguy]

Any post-appraisal date event is not relevant to your value.

It can be as it is an assumption that is taken in your report. Question is: Is this a new assignment or just an update?