Sales Price Addendum After Appraisal Submitted

[Lee Lansford]

RE: my post #57 above...

I need to add that what the appraiser did in changing the opinion of MV to meet the new contract price included a new comp or two and certainly a "new analysis".

 

[timd354]

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.

If that's what he did, then a $2k fine is very light....a significant suspension or a revocation would have been appropriate

 

[Lee Lansford]

If that's what he did, then a $2k fine is very light....a significant suspension or a revocation would have been appropriate

Perhaps so. Each situation brings with it a whole set of facts, circumstances and appraiser history that need to be considered. A published discipline is not a small matter. Recalling as best I can I believe that the appraiser was also precluded from acting as a supervisor appraiser.

 

[residentialguy]

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.

The first question I would ask is "why did they raise the price??? Buyers don't just agree to shell out $20k more after they agreed to pay $20k less. If they put in a swimming pool, sounds credible to me. If they had the seller pay $20k in concessions, then it definitely is not credible.

 

[residentialguy]

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

Ok..let's get all bias off the table. Let's talk market indicators here. Here's a hypothetical situation.
Market analysis, (SCA, etc) was done and fond that there was a reasonable range of value of $390,000 to $410,000, in which all points within that range were equally just as supported and probable. There was one property that was a pending sale which was identical in every way. The agents let him to measure it, do an interior inspection, and even allowed him to analysis the contract and all financing. The conditions of sale were completely in line with the conditions set in market value. Both agents were interviewed, including the seller. All typical buyer seller motivations, etc. The sale price was $405,000 with no concessions and typical financing, thus nothing affected the price. What a great indicator of value, wouldn't you agree??? The point value was narrowed to this great indicator @ $405,000. This price of this property is a good representation of a point value. A few days later, you found out that the contract changed to to $395,000. Since you based your point value on this property, why wouldn't you change your point value to $395,000???

 

[J Grant]

Ok..let's get all bias off the table. Let's talk market indicators here. Here's a hypothetical situation.
Market analysis, (SCA, etc) was done and fond that there was a reasonable range of value of $390,000 to $410,000, in which all points within that range were equally just as supported and probable. There was one property that was a pending sale which was identical in every way. The agents let him to measure it, do an interior inspection, and even allowed him to analysis the contract and all financing. The conditions of sale were completely in line with the conditions set in market value. Both agents were interviewed, including the seller. All typical buyer seller motivations, etc. The sale price was $405,000 with no concessions and typical financing, thus nothing affected the price. What a great indicator of value, wouldn't you agree??? The point value was narrowed to this great indicator @ $405,000. This price of this property is a good representation of a point value. A few days later, you found out that the contract changed to to $395,000. Since you based your point value on this property, why wouldn't you change your point value to $395,000???

The first weakness is the fallacy that all "points" with that range of 390-410k were equally just as supported and probable. This is BS in most cases. The range of value represents the sold comps and surely the subject is more similar to one of the comps, or 2 of the comps which make them better indicators. Market trends and intrinsic characteristics of the subject also would also guide appraiser to conclude the the better supported $ amount for subject in the range.

The second weakness is putting so much weight for the point value on a pending sale. There is a reason CLOSED sale comps are supposed to be the reliable indicators, with pending contracts and listings as additional support, not main support. The fact that the price of a pending contract can change price an example of that.

 

[residentialguy]

The first weakness is the fallacy that all "points" with that range of 390-410k were equally just as supported and probable. This is BS in most cases.

No, it's not. That is conservative. You just don't get it. The same house with different buyers will produce a 20% range with 5% range being points just as supportable and probable to occur. Now add on top of that the variances of different houses and comparing it to the subject...and that's not even considering YOUR margin of error.

 

[residentialguy]

The range of value represents the sold comps and surely the subject is more similar to one of the comps, or 2 of the comps which make them better indicators.

Ok...you're catching on. Lets say that comp 1, supported by all the other comps was an identical comp and the agents let you measure it, do an interior inspection, and even allowed him to analysis the contract and all financing. The conditions of sale were completely in line with the conditions set in market value. Both agents were interviewed, including the seller. All typical buyer seller motivations, etc. The sale price was $405,000 with no concessions and typical financing, thus nothing affected the price.

Great comp to base your point value on. Right?

 

[residentialguy]

The second weakness is putting so much weight for the point value on a pending sale. There is a reason CLOSED sale comps are supposed to be the reliable indicators, with pending contracts and listings as additional support, not main support. The fact that the price of a pending contract can change price an example of that.

And you don't think a pending comp supported by all the other comps, that was an identical comp and the agents let you measure it, do an interior inspection, and even allowed him to analysis the contract and all financing. The conditions of sale were completely in line with the conditions set in market value. Both agents were interviewed, including the seller. All typical buyer seller motivations, etc.
That wouldn't be a good indicator of value. What are you smoking?

 

[timd354]

Perhaps so. Each situation brings with it a whole set of facts, circumstances and appraiser history that need to be considered. A published discipline is not a small matter. Recalling as best I can I believe that the appraiser was also precluded from acting as a supervisor appraiser.

I hear what you are saying Lee, but when an appraiser does something that dishonest and egregious that calls for more than public discipline in my view even if he had no prior history of discipline. I personally think a 1 year suspension would have been appropriate if he had no prior discipline history and a revocation would have been in order if he had any history of prior discipline. This is not a case of incompetence (which perhaps can be fixed by discipline and additional education), rather this is a case of out and out dishonesty and the inability to remain independent, which is at the heart of our profession.....there is little chance of fixing someone like this who is dishonest and they need to be removed from the profession