Three days in a row. Different GLA than advertised.

[alebrewer]

It is misleading imo to accommodate for the $ yet believe that your own product is spurious. I suppose it is spurious, if there is no reasoning for why you chose X $- if the claim is that any number is as good as another number in the range, or X$ was the sale price.

Of course, a point value is a model of value that appraises "make up". That is our profession - hypothetical value development as a MODEL. You are not the only appraiser to scorn it for that reason. But it is not like the Easter bunny; it has standards of appraisal development and logic behind it.

No piece of real property interest will ever exhibit a true value of said interest. Nobody claims their appraisal opinion of a point value is a "true value" - whatever the bleep that is.
Your statement is false, relative to appraising, that any point value is no more or less meaningful than any other point value within said range.

Do you disclose that as a reconciliation comment on your appraisals that any point value is no more or less meaningful, so I picked X$?

Curious J - when you reconcile to your value, do you typically round to the nearest dollar, ten dollars, hundred dollars, thousand dollars, ten thousand dollars, or fifty thousand dollars?

 

[J Grant]

Curious J - when you reconcile to your value, do you typically round to the nearest dollar, ten dollars, hundred dollars, thousand dollars, ten thousand dollars, or fifty thousand dollars?

It depends on the value range - but typically I would round to the nearest thousand or ten thousand - 50k is reserved for very high value properties over 5 million - I never have rounded to the nearest dollar or ten dollars. In some low-end properties under 100k on occasion to hundreds of dollars, but not often.

 

[alebrewer]

It depends on the value range - but typically I would round to the nearest thousand or ten thousand - 50k is reserved for very high value properties over 5 million - I never have rounded to the nearest dollar or ten dollars. In some low-end properties under 100k on occasion to hundreds of dollars, but not often.

Sounds reasonable - I do similar. Two things about rounding:

(1) did you know that when you express an opinion of, let's say, $300,000 - you're actually expressing that opinion down to the penny? IOW - $300,000 is different than $299,999.99 and it's different than $300,000.01. In fact, the ONLY number that equals $300,000 is $300,000.00. So when you've rounded to the nearest $10k, $100k, or $1M - you're expressing an opinion of value down to the penny.
Now - no one would raise an eyebrow at someone expressing an opinion of $275,000, but they'd frown at someone willing to express an opinion of $276,105.95. Even though - in effect - you're doing the exact same thing. You're actually saying $275,000.00 (which is expressing the opinion down to the penny). Do you really think you're that good? Or to put it another way - do you really think your data is that good? Or to put it even another way: Why would $275,000 be more supportable than $275,001? Or $274,999? Or $274,999.99?

(2) when you round, you're actually expressing a range of value. If you round to the nearest ten thousand (let's say $280,000 for grins), you're actually saying that your opinion is between $275,000.01 and $284,999.99. So that, by admitting that you round, you're actually admitting that you express your opinion of value as a range.

To ZZG's point, I know this is higher order thinking - and may take a bit to sink in - but 'tis true whether you end up understanding the logic behind it or not.

 

[Fernando]

The highest value does not always benefit the client. Many heirs in an estate prefer a lower value so they can buy it from the estate...as an example. Each situation is different, and I do not want to know which benefits who.

Depends on the heir. The one who wants lower or higher will influence appraisers. The appraisers each heir party understand this.

Only if your client base is bank lenders as they are required by bank law. But some clients understand the purpose of a range value. Never mind that providing a point value and a range (confidence circle) around that point value is a measure of uncertainty. Again, USPAP requires we assess the "quantity and quality" of the available data. The tighter the range, the better quality is the data and the point value. Say you have some small rural county in the high plains and only 3 land properties have sold in the previous 3 years. One is 150 acres, one is 300 acres, and one is 560 acres. Obviously, the quality of the data could be good- you know everything about the sales, but the quantity of data is so limited as to make any estimate far less reliable than if 30 such sales existed.

A range can be calculated from the available data mathematically. But to simply choose one point within a range as "the value" requires the appraiser to make that decision. (The subject was most similar to X, was the most recent sale, was the proximate sale, has the same room count, age or size...etc.)

When few comps available especially if subject has unique features, the range will be wider.

 

[J Grant]

Sounds reasonable - I do similar. Two things about rounding:

(1) did you know that when you express an opinion of, let's say, $300,000 - you're actually expressing that opinion down to the penny? IOW - $300,000 is different than $299,999.99 and it's different than $300,000.01. In fact, the ONLY number that equals $300,000 is $300,000.00. So when you've rounded to the nearest $10k, $100k, or $1M - you're expressing an opinion of value down to the penny.
Now - no one would raise an eyebrow at someone expressing an opinion of $275,000, but they'd frown at someone willing to express an opinion of $276,105.95. Even though - in effect - you're doing the exact same thing. You're actually saying $275,000.00 (which is expressing the opinion down to the penny). Do you really think you're that good? Or to put it another way - do you really think your data is that good? Or to put it even another way: Why would $275,000 be more supportable than $275,001? Or $274,999? Or $274,999.99?

(2) when you round, you're actually expressing a range of value. If you round to the nearest ten thousand (let's say $280,000 for grins), you're actually saying that your opinion is between $275,000.01 and $284,999.99. So that, by admitting that you round, you're actually admitting that you express your opinion of value as a range.

To ZZG's point, I know this is higher order thinking - and may take a bit to sink in - but 'tis true whether you end up understanding the logic behind it or not.

Sorry, but imo your reasoning is very off for an appraiser. It sounds like you well well-suited to be a statistician or accountant or on the management side.

Rounding has nothing to do with a range. Rounding is accepted peer practice as well as reflecting the reality that, a majority of the time prices for properties are whole numbers/rounded. ( an exception being builder sales ) Appraisers are opining a value, not a price rung up cash register style to the penny or dollar.

You're saying 280k or 279.999 why is one better than the other? ( to prove a point ) is inane. Appraisers are not making those kinds of decisions. Appraisers might be trying to decide is 283k or 290k a better OMV and should have a reason for one over the other.

 

[Fernando]

Sounds reasonable - I do similar. Two things about rounding:

(1) did you know that when you express an opinion of, let's say, $300,000 - you're actually expressing that opinion down to the penny? IOW - $300,000 is different than $299,999.99 and it's different than $300,000.01. In fact, the ONLY number that equals $300,000 is $300,000.00. So when you've rounded to the nearest $10k, $100k, or $1M - you're expressing an opinion of value down to the penny.
Now - no one would raise an eyebrow at someone expressing an opinion of $275,000, but they'd frown at someone willing to express an opinion of $276,105.95. Even though - in effect - you're doing the exact same thing. You're actually saying $275,000.00 (which is expressing the opinion down to the penny). Do you really think you're that good? Or to put it another way - do you really think your data is that good? Or to put it even another way: Why would $275,000 be more supportable than $275,001? Or $274,999? Or $274,999.99?

(2) when you round, you're actually expressing a range of value. If you round to the nearest ten thousand (let's say $280,000 for grins), you're actually saying that your opinion is between $275,000.01 and $284,999.99. So that, by admitting that you round, you're actually admitting that you express your opinion of value as a range.

To ZZG's point, I know this is higher order thinking - and may take a bit to sink in - but 'tis true whether you end up understanding the logic behind it or not.

I round off to nearest half/$5K like I use to do with measurements until Fannie forced me top use ANSI. Ugh.
When a purchase price is $2,022,000, my appraised value would be either $2,020,000 or $2,025,000 since at $2,022,000 would be obvious I'm a target hitter.
Also a bit higher or lower is a subtle hint to borrower whether I think they got a good or bad deal.
Unfortunately, many readers don't get my subtle meaning.

 

[J Grant]

I round off to nearest half/$5K like I use to do with measurements until Fannie forced me top use ANSI. Ugh.
When a purchase price is $2,022,000, my appraised value would be either $2,020,000 or $2,025,000 since at $2,022,000 would be obvious I'm a target hitter.
Also a bit higher or lower is a subtle hint to borrower whether I think they got a good or bad deal.
Unfortunately, many readers don't get my subtle meaning.

It's rare to see a purchase contract at $2,022,000 unless it is a builder sale. Though I have seen some odd prices....$ 528,400. a recent one.

In your above example, I would not opine $2,020,000, imo it is stupid to come in below a SC price for $20 on a 2 million deal. I might opine $2,021,000 or $2,023,000--- or round up to $2,025,000 if appropriate - .

 

[Fernando]

It's rare to see a purchase contract at $2,022,000 unless it is a builder sale. Though I have seen some odd prices....$ 528,400. a recent one.

In your above example, I would not opine $2,020,000, imo it is stupid to come in below a SC price for $20 on a 2 million deal. I might opine $2,021,000 or $2,023,000--- or round up to $2,025,000 if appropriate - .

What's the difference between $2,020,000 and $2,021,000 and $2,023,000.
When a buyer complains on such small difference, buyer should not be buying such a high priced property.

 

[J Grant]

What's the difference between $2,020,000 and $2,021,000 and $2,023,000.
When a buyer complains on such small difference, buyer should not be buying such a high priced property.

It is about the fact that opinion at $2022,000 is $2 below the SC price, which can blow the deal up for no reason and see the buyer walk. I have no problem providing a MVO below a SC price, but I would have a reason for it. I can not imagine a $2 reason for a two-million-dollar property.

 

[Fernando]

It is about the fact that opinion at $2022,000 is $2 below the SC price, which can blow the deal up for no reason and see the buyer walk. I have no problem providing a MVO below a SC price, but I would have a reason for it. I can not imagine a $2 reason for a two-million-dollar property.

Yes, if I get a complaint about the $2,000, I will change it. No problem.
And I come out as a hero as the one who saved the deal.