Sales Price Addendum After Appraisal Submitted

[J Grant]

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.

The same house with different buyers can get different prices. But we are not guessing a price, we are giving OUR market value opinion developed from the SOW of the appraisal...so surely we have an idea of what OUR appraisal led us as far as supporting the value $ amount we chose? If not, we are a blithering idiot and should not be appraising.

Most probable price is not a random phrase in appraising, with "probability" a disconnected phenomena of numerical possibilities. Most probable price is part of the MV definition linked to the MV opinion . If an appraiser has no idea why they are providing their opinion at one value over another, in where is their competence?

 

[J Grant]

Tmd, here right on this thread Res Guy is supporting doing this very same thing ( changing a market value opinion simply because of a SC price change.

 

[J Grant]

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?

Its a pending sale price indicator and can be a good indicator of value... but it did not close yet, and your very own prior post shows this pending sale changing price. Which is one of the reasons why CLOSED SALES are the gold standard in appraising , not pending contract sales, and that includes the pending subject contract.

 

[Meandering]

The same house with different buyers can get different prices.

EXCELLENT point!

Those with the highest credit ratings and cash on hand, get the most favoriable loan rates, and can therefore spend some extra money to make sure they don't "lose" their dream home. All cash buyers might demand a discount. Yes, different buyers might be able and willing, or demand to pay different prices, even though, they may all be knowledgeable and typically motivated.

 

[J Grant]

Different buyers with same seller and same house on the same day can arrive at different prices. WE GET IT Res Guy! Some of us sold RE and got it first hand!

Different prices are possible, so? In an appraisal the most probable price is a PRESUMED SALE in the APPRAISAL that THE APPRAISER uses as the model to arrive at their point value...regardless of the fact that out in the market, an array of prices is possible and some more probable .

One might expect that if appraiser did a good job and market conditions allow, an actual price paid for a property would be within a close range to the appraiser's market value opinion.

It's maddening that appraisers think the fact that different prices are possible or probable less them become a blithering idiot in the reconciliation phrase , unable to fathom why any "point" is more supportable than another.

They are not "points", they are $ amounts for a value opinion, PICK ONE FOR A REASON !! How freaking hard is it when you did the darn appraisal.-didn't your own appraisal lead you to conclude some reason why a value within the adjusted range is better/more credibly supported as your opinion?

 

[residentialguy]

Different buyers with same seller and same house on the same day can arrive at different prices. WE GET IT Res Guy!

Glad you got it. RE market is not a most probable precise single point, like a super market. It's a range...even though you may opine just one of those points...reality is...it's one in a range that is just as probable.

 

[residentialguy]

But we are not guessing a price, we are giving OUR market value opinion developed from the SOW of the appraisal..

From the very onset, I said the closed sales supported this. And the most compelling property sale (identical comp and know it inside and out...far better than all the other comps) that you helped lead you to your final opinion has changed price...still supported by the closed sales...so, actually one could charge you with targeting a value, unless you change your value in sync with the sales contract, whether it be up or down. (unless it was offset, ie raised price to add concessions or special financing, etc)

 

[jay trotta]

Help please! I just received a revision request because the sales price changed (reduced) after I completed and submitted the appraisal. I think it is just wrong to ask me to change/amend my work with new facts, and it might or might not have changed my value conclusion. How do I protect myself, without simply refusing to make the change, as I like the client. Any experience or input on this much appreciated. Thank you

It would appear after 8 pages of dialogue, there is an ample amount of input, some good and some not so good; The Price Change was driven by the appraisal result (reduced price, u noted) Market Value indicator...opinion.
IMO, there is no Decline in Value (you set the value via the appraisal), the addendum reflects the new adjusted Sale Price via the market analysis, you did your job. It would appear you need to include the adjusted Contract Sale Price and update the report (date) to reflect that change, as supported by the market analysis you rendered. You also need to review & include the addendum, as it reflects the adjusted Contract Price, based on Your market analysis and if you choose to set a Fee for that work, it is a business decision.

Q) If your analysis (original) was based on the Market Sales you provided, why would You be researching new sale data ?? (assuming the adjusted SP happened within a short time line)
2) How do I protect myself, ? From what ??

 

[J Grant]

[

Glad you got it. RE market is not a most probable precise single point, like a super market. It's a range...even though you may opine just one of those points...reality is...it's one in a range that is just as probable.

I got it a long time ago ( sold RE for over 5 years) the reality a singe price can be just as probable in a range. THAT IS WHY WE ARE HIRED TO DO AN APPRAISAL. In the appraisal, the point value opinion is an opinion of most probable not just in terms of price, but in value relative to price..

Didn't your own appraisal led you to the opinion of point value ? Sure, 180k or 181k, either one could be probable- then pick one as better supported per market trends . Market going up? 181k . Market going down or stable? 180k. Now you have a reason for your choice.

Your client paid for, and the purpose of appraisal is, to get your opinion of market value- not a guess at a price among probabilities..

 

[residentialguy]

Didn't your own appraisal led you to the opinion of point value ? Sure

Back on the topic we were discussing: Didn't your own appraisal lead you to the opinion of point value ? Sure...there was a reasonable range of value that the market supported and pending sale of the subject was found to be a very good indicator of value; therefore the agreement of price between those typically motivated market participants led to the point value, since that sale was supported by the rest of the market, it was the actual home (not a different home in a different location) and I knew both the parties of the transaction better and the property better, plus the conditions of the sale and property (inside and out) were verified first hand by me. What price they settled on would end up being my point value. And, as shown...for very good reason.