Solution to contract dilema

[sputnam]

You know...trying to impose solutions is what the government does. It doesn't work. Instead of making the 'bad guys' into 'good guys', it punishes the people who try to do things in the right way. The 'bad guys' find ways to get around the rules they don't want to adhere to. The solution is better training and mentoring, better appraiser selection on the part of clients, revocation of licenses, and for the worst of the worst...jail time.

 

[Mike Kennedy]

Appraisal licensure, training, and experience qualifies an Appraiser to (drumroll)........Appraise.

An Appraiser is not a qualified, trained Mortgage Underwriter.

Let the Appraiser "independently and objectively" appraise the market and a subject v the market and opine a supported MARKET-DERIVED value opinion.

Let the Underwriter - Underwrite.

No illegal (Dodd-Frank/TILA/Regulation Z et al) "instruction, inducement, coercion", or post-report delivery extortion.

Simple.

 

[sputnam]

An Appraiser is not an Underwriter.

Let the Appraiser "independently and objectively" appraise the market and a subject v the market and opine a supported MARKET-DERIVED value opinion.

Let the Underwriter - Underwrite.

No illegal (Dodd-Frank "instruction, inducement, coercion", or post-report delivery extortion.

Simple.

Agree. I've been telling appraisers to stick to their own job for 20+ years and some of them just can't resist trying to do the lender's or realtor's or lawyer's job too.

 

[KenAZ]

I just have a simple question. Lets say I am appraising a property under contract for $200,000, but my comps support a value of $175,000.

What could possibly be in that contract that could convince me to change my opinion of value?


Even if I turn the tables and the contract is $175,000 and the comps support $200,000. Is there anything that can possibly be in that contract to convince me the home is only worth $175,000.

 

[J Grant]

I just have a simple question. Lets say I am appraising a property under contract for $200,000, but my comps support a value of $175,000.

What could possibly be in that contract that could convince me to change my opinion of value?

Imo, in above case, there is likely not anything in the contract itself to justify 25k over the comps. Without support from the comps, when this happens, it regards the appraiser's personal agenda. Some (not all, but some), think it is their mission to appraise to SC price. Thus, they find a high out of area sale and bring it in to bracket, creating a new, artificial high end of the value range. Then, all they have to do is state that the subject sales contract price is a MV indicator, because it falls within the adjusted range. Or, they ignore a defect another appraiser would have addressed. That is pretty much the way it happens...

Unless there is such a steep market rise with all the pending's and listings suddenly selling for 25k-30k more than the last sale?)


Even if I turn the tables and the contract is $175,000 and the comps support $200,000. Is there anything that can possibly be in that contract to convince me the home is only worth $175,000.

I can't think of anything in the contract to convince me house is worth 175k. I would likely appraise it at 200k and assume the buyers got a great deal (unless I can find out why seller sold it for a low price.)

Again, my final checkpoint would be market conditions and listings...has there been a sudden market decline, where the listings and pending's are now 25k below the last sale?
Ar

 

[residentialguy]

I just have a simple question. Lets say I am appraising a property under contract for $200,000, but my comps support a value of $175,000.

What could possibly be in that contract that could convince me to change my opinion of value?


Even if I turn the tables and the contract is $175,000 and the comps support $200,000. Is there anything that can possibly be in that contract to convince me the home is only worth $175,000.

It make me take a closer look at the comps and subject. It very well could be overpriced. It also could be something I missed - quality, motives, conditions of sale, different school system, market trends, builder problems, highway going in...you name it. And when you add the market flux on top of your margin of error on adjustments, 14% variance is quite possible.

I have no problem coming in below contract, but that appraisal will be WWIII proof.