Simple Question. Is "bracketing" Required By USPAP?

[Rich Heyn]

I'm not sure I correctly understand the issue here. Are we talking about bracketing as in an across-the-board adjustment for a line item? Or is the issue that the opinion of value is outside of the range of adjusted sales prices of the comps?

 

[chad hampton]

I think I must be missing something here - my final opinion of value is always bracketed by the post adjusted sales prices of the comps. In rare cases, the opinion of value may not be bracketed by the pre-adjusted sales prices of the comps.

Now the purchase price can always be lower for many reasons, but my opinion of value is based on what the home would sell for in typical marketing conditions.

 

[Mr Rex]

Required bracketing is described in the book "Appraising for Dummies". Yellow and black, a "Cliffs notes" version of how to.

 

[Mike Garrett RAA]

Classic example of someone who hasn't the knowledge and/or experience to do an appraisal. I find comfort in a couple of statements I learned years and years ago as a student of appraisal.

#1. It is what it is.

#2. You can't make chicken soup out of chicken poop.

Something that twists my shorts....

New home contract....$215, 044.15 My best guess as to the value might be $215,000. So what if it falls outside of the bracket by $44.15? Who really cares?

 

[Tru Red]

I'm not sure I correctly understand the issue here. Are we talking about bracketing as in an across-the-board adjustment for a line item? Or is the issue that the opinion of value is outside of the range of adjusted sales prices of the comps?

The way that I understand it is they want me to supply a sold comparable that would bracket it on the low side. In other words a sold comparable that sold for less. A sold comparable that simply does not exist. The Seller, in my humble opinion, is accepting less than the home is worth in the marketplace. The Seller simply wants the cash ASAP. This will now be the least expensive property sold in (at least) the past 24 months.

 

[Riick]

The Seller, in my humble opinion, is accepting less than the home is worth in the marketplace. The Seller simply wants the cash ASAP. This will now be the least expensive property sold in (at least) the past 24 months.

What.. ??!!
This was a *Sale*, and not the ReFi I assumed it was.
You never know why a Seller sells cheap, when I used to sell property, I'd wander neighborhoods looking for poorly maintained houses.
They frequently wanted out, were tired of maintenance, let alone upgrades.

 

[Howard Klahr]

The Seller, in my humble opinion, is accepting less than the home is worth in the marketplace. The Seller simply wants the cash ASAP. This will now be the least expensive property sold in (at least) the past 24 months.

Didn't you inquire as to why the seller is selling for what appears to be below the range of existing sales? If as you state the seller is not typically motivated, would that not reflect a condition of sale issue and therefore the market value, you the one where there is no undue influence, would be above the contract price that is below market? It is sounding like you are appraising to the contract not to market value.

 

[jay trotta]

Didn't you inquire as to why the seller is selling for what appears to be below the range of existing sales? If as you state the seller is not typically motivated, would that not reflect a condition of sale issue and therefore the market value, you the one where there is no undue influence, would be above the contract price that is below market? It is sounding like you are appraising to the contract not to market value.

I agree, but there is that old saying; "Buyers are Liars and Sellers are worse" - it may be nice to ask why, but in realty I agree with MG. There are numerous reasons Why someone needs to bail and someone gets an equity advantage, UNTIL..........

 

[J Grant]

I am not clear on this...was there a sales contract price on subject for 170k ?

Bracketing should not be a requirement, and especially not bracketing by sales price, however lack of bracketing can reveal a problem with the value or comp selection, the value may be the issue here.
Why did you appraise the subject at a value lower than the other comp prices indicate ?

 

[miktay]

Below is the email they sent me. I would like to add I used (7) sold comparables (as well as (2) active/pending) which was ALL the sales in the past 24 months in the the defined PUD. And lastly....the contract price was $164,000. I was $6,000 over the contract price!

No, it's not required. You've gone above and beyond. If you have included good narrative, you have done your job. Point out the errors of their ways, and sleep well tonight.
PS: I appraised in CA for 16 years and don't remember any real estate under $500,000 (or so...) !!!