Simple Question. Is "bracketing" Required By USPAP?

[J Grant]

Bracketing is not required, but how did he do his job if his OMV for subject is lower than the most similar comps indicate and there is no supportable reason for it being lower? Maybe his opinion of value is off and that needs to be changed? Who knows if all is not disclosed in posts.

Property price is not a property characteristic, but it is a market characteristic. In that sense then it can be good practice to search by price after the comps are adjusted for physical characteristics in cases where subject OMV is higher than or lower than the prices of the sales comps used.

If it the highest or lowest price of a subject is not supported by bracketing, then something has to support why the value opinion is either the lowest or highest price...was the subject the worst property or the most superior property? If it is an average property, then why is the OMV the highest or lowest? An OMV has to make sense. Is the market rapidly declining or appreciating? Some reason that makes sense has to exist and be reported.

 

[jay trotta]

Bracketing is not required, but how did he do his job if his OMV for subject is lower than the most similar comps indicate and there is no supportable reason for it being lower? Maybe his opinion of value is off and that needs to be changed? Who knows if all is not disclosed in posts.

Property price is not a property characteristic, but it is a market characteristic. In that sense then it can be good practice to search by price after the comps are adjusted for physical characteristics in cases where subject OMV is higher than or lower than the prices of the sales comps used.

If it the highest or lowest price of a subject is not supported by bracketing, then something has to support why the value opinion is either the lowest or highest price...was the subject the worst property or the most superior property? If it is an average property, then why is the OMV the highest or lowest? An OMV has to make sense. Is the market rapidly declining or appreciating? Some reason that makes sense has to exist and be reported.

"J" - 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!
Just providing a little more info reflective of the action that was taken, there really (IMO) was no need for the mention of Bracketing, per the work noted. This just backs up the Mechanical Review and the $10/hr person that has no understanding of the art of appraising or its process.

 

[J Grant]

I don't get it...you were 6k over the CS price but still below every single other sale price of similar comps...and what about prices of listings/pendings? An opinion of market value credibility is not measured by how close it comes to or how far it deviates from a SC price.

The problem in this report is not lack of bracketing per se, it could be that your low OMV is not supported by the comps and market activity. When results of a report are out of wack, the lack of bracketing can be the symptom of a problem.

A subject contract price can influence our opinion of value as it is a pending sale, but how much influence (or no influence) to accord it has to be measured within the context of market activity/comps as well as motivation and terms of the subject contract as MV terms/motivation or not.

 

[Terrel L. Shields]

An opinion of market value credibility is not measured by how close it comes to or how far it deviates from a SC price.

ultimately, it has to be in aggregate otherwise we are valuing something besides "market"...

 

[J Grant]

ultimately, it has to be in aggregate otherwise we are valuing something besides "market"...

It is appraise's judgement what market data to rely on and how much to rely on any of it including the sales contract of a subject.

 

[Michigander]

Just out of curiosity do you mean this?:

 

[J Grant]

not sure who the last post was directed at...the appraiser chooses which sales comps to use, so the appraiser chooses every step of the way which data to rely on. Among the sales comps the appraiser further chooses which to weight or consider more (or if to consider them all equally).

 

[Michigander]

not sure who the last post was directed at...the appraiser chooses which sales comps to use, so the appraiser chooses every step of the way which data to rely on. Among the sales comps the appraiser further chooses which to weight or consider more (or if to consider them all equally).

For the OP - was just curious if the issue was actually the appraised value was outside of the adjusted range.

 

[J Grant]

Okay thanks I was not sure.

 

[Terrel L. Shields]

It is appraise's judgement what market data to rely on and how much to rely on any of it including the sales contract of a subject.

Again, the appraiser can value things at one thing but if the market values it at something else, then regardless the MV definition, it is not "market" value. That is why the IRS uses a different, more universal definition, of market value than does bank regulators. The MV most of us are accustomed to in lending is very contrived and bound by regulation and does not necessarily reflect real "market" value. That is one complaint the Realtors, et al, have and they have a legitimate concern, namely that of under valuing property. I believe the sale prices of property will, on average, exceed the "Market Value" of the average appraiser. The appraiser is under pressure to support prices with fixed data...data that is either difficult to locate, or nebulous in nature, and eschew making the adjustment over trying to get it past underwriting. This means appraisers (and how many on this site have actually made a statement to that effect?) often say they did not "give" value to a pool, upgrades, amenities, an ADU, or a shop/barn, etc. and claim that was because they could not find evidence that it provided value [ and oft then because their comparables did not have a similar amenities - thus the barn becomes invisible, the ADU is invisible, the pool is invisible....]