Straight from USPAP value, price, opinons

[glenn walker]

A price by itself if not biased. A price is a fact, monies paid or offered.

However, an appraisal done to develop a price opinion can be biased - since price is a fact, a specific $ X. it can result in appraiser shaping the appraisal around achieving X $ as the result.

Can an appraisal done to develop a value opinion be biased?

My complaint, these page on page regurgitations of you trying to grasp concepts as 'teachings' is not helpful to beginners and potentially more harmful as you wiggle around in the arguments to fit your theme.

Actually beginners sometimes have a better grip than us oldsters in they have not yet formed bad habits or belief systems that something is written in stone. What Grant misses is that a definition is just a road map written hopefully in a way the reader and user can comprehend and apply to their work. Where the brain lock comes into play is semantics. All of our sales comparables are based on sales prices not values and many are cash or waivers and never even had appraisals completed. Therefore we base our final opinion of market value on sales prices and we convert those sales prices into a final opinion of market value. The two are working together as a package.

 

[alebrewer]

BTW - you're falling behind, J... you need to pick up the pace...

 

[J Grant]

Can an appraisal done to develop a value opinion be biased?

Putting aside a racial bias ( which belongs in another thread ). Bias is usually around achieving a PRICE or value direction - so the cause of bias in developing a value opinion often circles back to price

 

[alebrewer]

Putting aside a racial bias ( which belongs in another thread ). Bias is usually around achieving a PRICE or value direction - so the cause of bias in developing a value opinion often circles back to price

There is no bias in price - price is a fact. There may be undue influence (me holding a gun to your head), but there cannot be bias in price. It is a statement of fact. I may WANT to pay less based on your gender or your race, but you have to accept my offer. If you accept the offer, you are implicitly confirming that there is no bias.

The reason you're so confused is that you still haven't grasped that value is an opinion of what price should be. Keep at it, though - I'm absolutely sure you'll work though it eventually.

 

[glenn walker]

Yes it can.

However, the fact that an appraisal can be reviewed, and also compared to data and appraisal methodology means a

There is no bias in price - price is a fact. There may be undue influence (me holding a gun to your head), but there cannot be bias in price. It is a statement of fact. I may WANT to pay less based on your gender or your race, but you have to accept my offer. If you accept the offer, you are implicitly confirming that there is no bias.

The reason you're so confused is that you still haven't grasped that value is an opinion of what price should be. Keep at it, though - I'm absolutely sure you'll work though it eventually.

Kudos-- Quote: Value is an opinion of what price should be. That one sentience should have shut down this entire thread days ago. Now I can now put the bottle of jack back into the drawer : ) LMAO

 

[J Grant]

There is no bias in price - price is a fact. There may be undue influence (me holding a gun to your head), but there cannot be bias in price. It is a statement of fact. I may WANT to pay less based on your gender or your race, but you have to accept my offer. If you accept the offer, you are implicitly confirming that there is no bias.

The reason you're so confused is that you still haven't grasped that value is an opinion of what price should be. Keep at it, though - I'm absolutely sure you'll work though it eventually.

Do I communicate poorly, or do people not understand my posts? I am not the one confused ! How can I be confused, since whatever I post is right there in the USPAP definitions? (

Price is a fact. We've agreed on that. Price itself has no bias, we've agreed on that. However an appraiser developed to ACHIEVE A PRICE can be biased ( in favor of reaching that price. )

Is that clear? That the development of appraisal to reach a price (or value direction ) is the bias.

A value opinion is expressed as X $ amount ( as defined ). As defined is the MV definition price and terms for the most probable price. Yes , values and value opinions have relations to prices. But the definitions of USPAP are what they are wrt what an appraisal is and what an opinion of value is

Your - Grasped that value is an opinion of what price should be - do you mean an opinion of what an actual, fact price should be? Please read the USPAP definitions again at start of this post. And tell me what it says an opinion of value is !

 

[J Grant]

Kudos-- Quote: Value is an opinion of what price should be. That one sentience should have shut down this entire thread days ago. Now I can now put the bottle of jack back into the drawer : ) LMAO

Too bad the problem with that sentence is not how USPAP defines a value opinion.

USPAP says what it says. Read the definitions again at top of thread, they are what they are and are not the same with sticking the word price in -

 

[alebrewer]

Your - Grasped that value is an opinion of what price should be - do you mean an opinion of what an actual, fact price should be?

Maybe this will help - when you're at a garage sale, you see something that attracts your attention. You're interested in reselling the 'thing' to a typically motivated buyer - one who is well informed or advised and acting in their own best interest. Inherent in your sale is the fact that a reasonable time is allowed for exposure to the market, payment is made in terms of cash, and the price represents the normal consideration for the 'thing' unaffected by special or creative financing. As such, you develop an opinion about what the 'thing' will resell for - i.e. you develop an opinion about the market value of the thing. Now, if you're still with me - your opinion about what the 'thing' will resell for is the same as your opinion about how many dollars the 'thing' should fetch - which is the same as what the price of the thing should be. Make sense?

 

[J Grant]

MARKET VALUE: a type of value, stated as an opinion, that presumes the transfer of a property (i.e., a right of ownership or a bundle of such rights), as of a certain date, under specific conditions set forth in the value definition that is identified by the appraiser as applicable in an appraisal.
9 Comment: Appraisers are cautioned to identify the exact definition of market value, and its authority, applicable in each appraisal completed for the purpose of market value.

PRICE: the amount asked, offered, or paid for a property. Comment: Once stated, price is a fact, whether it is publicly disclosed or retained in private. Because of the financial capabilities, motivations, or special interests of a given buyer or seller, the price paid for a property may or may not have any relation to the value that might be ascribed to that property by others.

Given the above, how can this posted be substituted "..Value is an opinion of what price should be"" We need to stop inventing our own versions and stick with what USPAP says.

The only place the word "price " appears is in the market value definition ( of terms to produce the most probable price ) and a market value definition is not the same thing as an opinion of market value)
I understand prices and value have a relation, the appraisal seeks to find that relation-- the relation is the VALUE OPINION, (expressed as a price ). Which is not the same as an actual price, which is a fact.

 

[J Grant]

Maybe this will help - when you're at a garage sale, you see something that attracts your attention. You're interested in reselling the 'thing' to a typically motivated buyer - one who is well informed or advised and acting in their own best interest. Inherent in your sale is the fact that a reasonable time is allowed for exposure to the market, payment is made in terms of cash, and the price represents the normal consideration for the 'thing' unaffected by special or creative financing. As such, you develop an opinion about what the 'thing' will resell for - i.e. you develop an opinion about the market value of the thing. Now, if you're still with me - your opinion about what the 'thing' will resell for is the same as your opinion about how many dollars the 'thing' should fetch - which is the same as what the price of the thing should be. Make sense?

Good post, I will reply later...help - behind on work!