Supplemental REO Addendum

[Mr Rex]

"Market value" based on a client imposed market exposure time of less than what is typical exposure to meet the pre-printed definition of market value on the 1004 is an oxymoron.

 

[Lee Lansford]

To assist us in our efforts here: It's EXPOSURE TIME, not MARKETING TIME.

"Marketing time" is not a part of the definition of MV.

 

[J Grant]

It's a conondrum (sp?)...because the MV def pre printed on the form states " a reasonable time is allowed for market exposure"...does the way the word exposure is phrased mean exposure time, as we use it rertropsectively to eff date, or can it mean the generic sense, exposure to market? Cryptic definition as usual...because what does "reasonable" mean?

Reasonable, as always, would have to be relative to market trends and similar DOM needed to sell the comps.

To be on the safe side, I looked at market exposure for my comps to determine reasonable...if the time was over 60-90 days, I would discount price a bit to the typical prices for properties sold in 60-90 days, and explained that it is MV but the lower range of market value per exposure time.

I quit taking work from a client that wanted 30 day marketing time because imo it was not reasonable exposure and the value veered to low to be MV and in the territory of LV...LV does not always mean a fire sale price, just low enough to sell in the severely restricted marketing time. I hated other things about the client as well, they started out with 60-90 days and when they changed to 30 days I bailed. Don't miss them and their crap properties at all!

Have not done an REO in months, at one time it was about half of all my work!

 

[residentialguy]

Because they are putting a time limit on it, it is very possible that they want to know the most probable price of a distressed sale. This should be verified so that the appraiser's opinion of value reflects their needs.

 

[J Grant]

Because they are putting a time limit on it, it is very possible that they want to know the most probable price of a distressed sale. This should be verified so that the appraiser's opinion of value reflects their needs.

Res Guy, then how do you reconcile that with not changing the pre printed def of MV?

What would be the value definition of the most probable price as a distressed sale? Do you insert a modidifed value definition for the preprinted MV def...seems problematical imo

 

[residentialguy]

Res Guy, then how do you reconcile that with not changing the pre printed def of MV?

And where is the valud definition of the most probable price as a distressed sale? Do you insert that instead of the MV def?

I don't change the 1004...I give value opinion of the definition. The values asked for on the addendum are not clear like the 1004, therefore I verify with the client exactly what they're asking for, as USPAP instructs us to do.

 

[J Grant]

Sorry Res, the value definitions on the addendum are clear...they state estimate of market value...I agree re askng client but we still are stuck with the values as defined...if we feel an opinion of MV can be developed within the marketing time then we are okay, if not, problem time...

 

[residentialguy]

Since they changed the conditions of MV which means it's not MV, therefore that is not an assumption that you can take. They are asking for time restrictions that more closely fit liquidation value and disposition value.

 

[J Grant]

Oy ve...we can go back and forth on this forever!

 

[Mr Rex]

Sorry Res, the value definitions on the addendum are clear...they state estimate of market value based on a restricted market exposure time...I agree re askng client but we still are stuck with the values as defined...if we feel an opinion of MV can be developed within the marketing time then we are okay, if not, problem time...

I fixed it for you. The definition of market value has been modified to something different than the pre-printed on the 1004, unless typical adequate exposure matches the client imposed restricted market exposure time. It really ain't rocket surgery, at least for the intended users and appraisers with a decent modicum of reading comprehension.