Sales Price Addendum After Appraisal Submitted

[J Grant]

If you verified the conditions of sale and it was a good indicator of value, you may have placed weight on that contract in you OMV. If the price changes, your opinion of value, if not changed, does not reflect that sale consideration.

I would argue at that point you put untoward "weight" on the SC price....

 

[residentialguy]

For the discussion at hand, I'd be comfortable revising the report to incorporate the new information.

Would you still be comfortable with that if it changed your opinion of market value?

 

[residentialguy]

I would argue at that point you put untoward "weight" on the SC price....

I don't think so. I will use a good indicator of market value as a point value if it falls comfortably in the reasonable and supported range of most probable prices.

 

[hastalavista]

Would you still be comfortable with that if it changed your opinion of market value?

It depends. But in some scenarios, I'd be very comfortable.

As I said, in the real world of non-GSE lending, reports get revised due to new information all the time. The issue isn't if the new information results in a change of value, the issue is if the new information is so significant that the original analysis is rendered useless. That new information could be a discovery of some factor affecting the property which changes its entire H&BU; if you run into this problem, you are starting almost from scratch.
But a change due to a $10k foundation issue (as I used in my example) that was present but unknown on-the effective date of the value? That wouldn't trigger a need for a new assignment in my book. It would trigger a need for a re-analysis of the data. Once that re-analysis is done and the new information is considered in the appraisal, that can (and is) handled as a revision most of the time (Fees are not part of the equation here. I don't need to do a new appraisal to charge an additional fee if I believe an additional fee is warranted).

 

[residentialguy]

It depends. But in some scenarios, I'd be very comfortable.

I agree. I'm not talking about your scenario of foundation, to which I also agree. But if they add 9k in concessions, that means that the price was affected and the seller would sell at a lower price. Kind of hard to argue against an appraisal value changed to show what a seller would sell that exact house for. "You're angry because I opined the same value of what you sold the house for? Or are you angry because you can't get the deal done?" If I were appraising the identical house across the street, that lower price sure is an indicator of value.

That said, I have not done this, as the original value was still supported by other market value indicators. But I'm sure there are unique situations out there where the market evidence is lacking and there weight on a particular sale is critical to show what that property would sell for in the market under the conditions set in the definition of Market Value.

 

[timd354]

Would I have selected a different set of comparables, or valued the subject differently in relation to the comparables, if it had been purchased at a materially different price? If not, then why not?

No offense, but if you would have selected different comparable sales or changed your comparable search parameters due to a different contract price, then please just turn in your appraisal certification and quit this business immediately as you are not fit to do appraisals. If you have to ask why not in regards to your first question, then you have no business being an appraiser....sorry to sound so harsh, but that is the simple truth.

 

[Lee Lansford]

I come to the party late so I apologize if I have missed something of great importance, BUT, if an appraiser changes an opinion of Market Value due solely to a change in the contract price of the subject, that appraiser does NOT value his/her license. The last time I was presented with that situation--in my former life as a member of my state's 'Appraisal Board'--I believe the appraiser walked away with a $2000 fine and publication of the discipline.

 

[residentialguy]

I come to the party late so I apologize if I have missed something of great importance, BUT, if an appraiser changes an opinion of Market Value due solely to a change in the contract price of the subject, that appraiser does NOT value his/her license. The last time I was presented with that situation--in my former life as a member of my state's 'Appraisal Board'--I believe the appraiser walked away with a $2000 fine and publication of the discipline.

That's the thing about boards. They can do thing wrong and get away with it. They can be like the Spanish Inquisition of Appraisers. If the market support is there, then truly they were wrong.

 

[Lee Lansford]

That's the thing about boards. They can do thing wrong and get away with it. They can be like the Spanish Inquisition of Appraisers. If the market support is there, then truly they were wrong.

The appraiser's opinion of MV was $180k and the contract and price presented to the appraiser was $180k. Good so far. Following, the appraiser is presented with the amended contract with a price of $200k. The appraiser then dutifully "amends" the opinion of MV to $200k. Credible? Nonsense. If you want to defend the incredible, it is your right to do so. I suppose that the appraiser just could not offer an opinion lacking a target.

 

[Lee Lansford]

That's the thing about boards. They can do thing wrong and get away with it. They can be like the Spanish Inquisition of Appraisers. If the market support is there, then truly they were wrong.

Why then did not the appraiser offer an opinion the first time at the "right" price?