Short Sale / Market Value

[JSmith43]

Original Poster:

MAI's are best judged as individuals, agreed. The AI has an admirable branding legacy. Designees are subject to the "you are only as good as your last appraisal" truism.

It is a weakness for an MAI to hide behind credentials, years of experience, when asked for an explanation. A distilled, thoughtful reply is the light saber of the appraisal Jedi:icon_lol:

Residential appraisers have an advantage in identifying and converting motivational factors (I.E. undue stimulus) over commercial appraisers, simply because the data is more plentiful. But they still should analyze the nature of the transactions much like they would, the quality of an income stream.

Of course, if there is a way to spin their way around it by selective interpretation of the FIRREA definition of MV, many will be tempted to use the rosy scenario that data is data and if it is most probable, it's all good, without addressing the "quality" of the data as is clearly necessary for a FIRREA MV appraisal. Darned regulations with respect to required MV definition for many assignment types sometimes put appraisers in a box that appraisers ought not be in, but they are. They should deal with it in a straightforward manner, rather than spin their way around it.

JMO, but it comes from 63 years experience thinking too much about such matters, when I should have just been playing tennis

 

[J Grant]

Good post, Mentor.

I think in this case, the OP inclusion of the fact that his contact for work is an MAI was important, for the OP at least, because the regard and esteem for the designation and experience are at war with the advice given about appraising to contract price despite market evidence to the contrary. The OP is thus struggling with this bad advice more than if it came from a different source.

The fact remains that the majority of MAI's are the most highly qualified in our field and deserve the esteem of their peers.

However, the few that are "rogue", or appraising to an agenda, can do more harm than the "average" appraiser, due to the very same esteem in which they are held.

It is interesting that a few of the CG's on the forum, who will jump all over a cert res for making a spelling or word application error in a post, are silent when it comes to an egregious appraisal practice .

 

[George Hatch]

M(R)

Anecdotal, but related.....

You know, it's really too bad you weren't present at the ASB's public meeting in Irvine a couple weeks back when this topic came up for discussion during the break. You weren't mentioned by name but your views were advanced in the form of a question. I was engaged in a different conversation nearby with the representative from the Appraisal Subcomittee, but I would gladly have broken that off to watch you try to run your line and defend your point of view in that discussion. Suffice it to say you would have been able to chalk up yet another loss in your scorebook.

And yes, the question was framed in terms of houses in particular, not real estate in general. I don't think you're ever going to find much traction for the idea that appraisal principles and concepts work differently for SFRs than for non-res properties.

As far as I can tell, NARs point of view on this is striking out across the board. You've picked the wrong horse. I don't think you're going to be able to make it the right horse by riding it into the ground.

IMO.

 

[JSmith43]

George, I choose not to be politically active except for at the grass roots level. Discussing these issues with other appraisers, or in your case, rebutting unfounded charges that I am carrying NAR water, etc. I have no interest in traveling and lobbying special/politically connected interests.
But, I will be a part of a public debate, and admit to the hobby of posting my views, which are not for sale or rent

There is no "my horse being ridden into the ground." What a perposterous presumption! It is a view held by many others that are every bit as competent as you imagine yourself to be, to draw reasonable conclusions.

Readers are not lead around by the ears or intimidated as much as you suppose. You are chiding them for drawing their own sensible conclusions. I'm not sure how many share my views on the appraisal process, economic theory, the FIRREA definition of MV, etc. And, I bet you don't know & perhaps don't care how many share your views.

Politics, regulation & moneyed interests can change the English language. Not long ago, appraisers knew that they were estimating MV by offering their developed opinion of MV. That is, until the artificial distinctiion was made that appraisers opined MV and machines estimated MV. Some here know the genesis of the AVM movement. This definitional manipulation was part of greasing the skids.

My view is that machines perform tasks they were desinged to perform and the mighty wizards of oz, pulling the levers behind the curtain, are doing the estimating via analog & digital mechanisms.

If I'm carring water for NAR, may I ask for whom you are carring water?

Oh my! I've written a post almost as long as one of your infomercials

 

[PL1957]

Residential appraisers have an advantage in identifying and converting motivational factors (I.E. undue stimulus) over commercial appraisers, simply because the data is more plentiful.

That would be true if motivational factors were consistent between commercial and residential property owners. Some residential appraisers seem to believe that the possibility of giving a property back to a lender acts as a major undue stimulus, resulting in the commercial property owner losing all of his judgement and agreeing to sell a property for less than its market value.

I don't agree. Commercial properties go back to lenders on a regular basis, in a wide variety of ways, with little, if any, stigma attached to either the property or the borrowing entity. I would be hard-pressed to name an active developer in my markets that hasn't had a property go bad. It's part of doing business. The motivations are clearly different.

 

[JSmith43]

I would be hard-pressed to name an active developer in my markets that hasn't had a property go bad. It's part of doing business. The motivations are clearly different.

The data is less plentiful & it is likely to be different. Since the '70's I've read of developer/investor behavior being lampooned.

Robert Ringer wrote a few books using his adventures as a commercial loan officer as a metaphor for "winning" in life's journey. The way he put it, so many projects were overbuilt to satisfy the egos of the owners that the places often had to go bust two or three times, before the numbers were realistic enough for the new owner to make a go of it.

Of course, commercial work is a different environment. But, the analysis still has to be made or at least checked from time to time. The OP suggested that there was a clear distinction in his market. I'm not in posession of any facts to indicate his implication is inaccurate.