Short sale comparables?

[Vivian Bachner]

Richard: Congrats on your achievement

How can you ignore the 14 sales in Kevin's hypothetical??? The bottom line is, if you don't consider that they are the "market" it is misleading or worse.

To further my point, lets add to the hypothetical. Lets assume there are 50 active listings, 35 of which are REO and offered at prices similar to the 14 REO sales. Ask yourself this, if you were out to buy a house in that development, assuming that the properties are in similar condition, which would you buy? Lets be honest here, you would, like the rest of the "typical" buyers in the market, make a beeline for the lowest priced property. Take a wild guess which one that would be?

If you say anything other than one of the REO properties the odds are you are making a big mistake. To continue this hypothetical situation, the purpose of this hypothetical appraisal is a consultation to help market the property. If your appraisal is in line with the only non-REO sale in the development, the odds are that your client will overprice the property and it will not sell. Do me a favor and reread the definition of market value. What meaning does your opinion of value have if the "typical buyer" won't pay that :Eyecrazy:

I'm not trying to be adversarial here, I would just rather see more appraisers not contribute to the mess that we have.

Donna: Right! My guess is that many believe that a "typical buyer" is only defined as one in a position of weakness in a seller's market.

 

[ZZGAMAZZ]

Is there any accountability on the part of those who are responsible to oversee the defintion of market value, which includes contradictory operational statements?

These conversations are intriguing but, gees, even the constitution gets its day in court, every day, but appraisal standards are "enduring" despite shortcomings?

 

[Hamlet]

What is the market doing? That is the key to determining the motivation of the buyers/sellers. Their motivation is going to be reflected in the market.

 

[Richard Carlsen]

Richard: Congrats on your achievement

Thanks Vivian. I simply stopped saying that I needed to loose some weight and made the decision to drop 40 lbs (without cutting my head off). About 14 lbs to go and I'll be back down to my triathlon weight from 20 years ago.

Actually, if you reread my post, you will see that I don't ignore these sales. I take them into account as part of the market condition. I just do not use them in the grid as comps.

Is there any accountability on the part of those who are responsible to oversee the definition of market value, which includes contradictory operational statements?

Z..... There is no right or wrong definition of value. The definition of value reflects the needs of the client and the Intended Use of the appraisal. One client can need one thing while another has an entirely different need. They each can have their own definition of value. The appraiser gets into trouble when he thinks that there is one and only one definition and that all appraisals must be written to that value. This is one of the reasons that we need to understand the assignment conditions as well as the Intended Use and the Intended User of an appraisal report. We need to make sure that the definition of value is applicable.

What is the market doing? That is the key to determining the motivation of the buyers/sellers. Their motivation is going to be reflected in the market.

You have it backward Donna. What buyers and sellers are doing is the marketplace. Their actions tell us what the market is like. One must always remember that buyers and sellers have completely different motivations, wants, needs and desires. The only place those are in agreement is in the agreed upon price and terms of a sale. Otherwise, buyers and sellers are as different as night and day but both are essential to make a market.

 

[ZZGAMAZZ]

Isn't the definition of "MV" the same for all residential lending assignments?

Also I'd headed for the gym because I've got 50 (FIFTY) to lose, and you are my new role model, especially now that Larry the Cable Guy is punking Dan Marino in the TV commercial I saw this morning (lol)...

 

[Richard Carlsen]

Isn't the definition of "MV" the same for all residential lending assignments?

Nope. If you use the FNMA reporting forms they because the definition of MV is preprinted on the form but otherwise, there are several other MV that are slightly different and used for lending.

BTW, don't knock the Dan Marino & Mike Golic commercials. That system is how I lost my 26 lbs in 7 weeks. It was really easy. Making the decision was the hard part.

 

[sosappraisal]

Definition of Market Value

This has been a great thread to read. Very interesting
educational and entertaining. What definition of market
value would be used for a short sale or R.E.O. appraisal
and on what form would you put it on. I have not done
one nor do I want to and am just interested.

Thanks.