Using comps after appraisal effective date

[Nevermind 3]

I think the next edition of USPAP should include "The COMMON SENSE Rule."

I agree. It seems clear by this thread, that some of us are missing that rule.
m2:

 

[Nevermind 3]

Lord, please deliver us from these appraisal board members personal opinions, unsupported and lacking common sense.

AMEN!!!!
:new_all_coholic:

 

[Delta85]

I'm hearing decent reasons to use and not use a sale that closed after the effective date. But for me I say why create a headache? You open yourself up to a big can of worms and possible negativity from a reviewer or state board that might feel differently.

I'd put the comp in the report as a pending sale and offer some commentary about when it closed and for how much.

 

[TJSum]

I'm hearing decent reasons to use and not use a sale that closed after the effective date. But for me I say why create a headache? You open yourself up to a big can of worms and possible negativity from a reviewer or state board that might feel differently.

I'd put the comp in the report as a pending sale and offer some commentary about when it closed and for how much.

I agree. However, based on this statement and many others I have read, why wouldn't one put the actual contract price / sales price on the grid itself. It was under contract as of the effective date, at that price, so why not use it instead of the list price.

I would use the actual sales price, write it up as a contract and then explain below that it settled after the effective date (and prior to signature date) and the price shown is the actual contract / sales price. You could also adjust out the concessions on the grid as well, just explain it all below the grid. You could even put most weight on it if you wish, but present it as it was as of the effective date.

 

[Delta85]

I agree. However, based on this statement and many others I have read, why wouldn't one put the actual contract price / sales price on the grid itself. It was under contract as of the effective date, at that price, so why not use it instead of the list price.

I would use the actual sales price, write it up as a contract and then explain below that it settled after the effective date (and prior to signature date) and the price shown is the actual contract / sales price. You could also adjust out the concessions on the grid as well, just explain it all below the grid. You could even put most weight on it if you wish, but present it as it was as of the effective date.

You could do it that way too but at that point you might as well call it a closed sale. As of the effective date there was no settled price. I prefer to capture the comp as it was as of the effective date and then add commentary as kind of an epilogue indicating that it closed and what the settled price was and to make clear that this occurred after the effective date of the report. I feel like I am covering myself while at the same time giving the reader all the details of the transaction.

 

[Lee Lansford]

I'm hearing decent reasons to use and not use a sale that closed after the effective date.
...
I'd put the comp in the report as a pending sale and offer some commentary about when it closed and for how much.

Given what is in place as of the effective date of the appraisal, yours is an appropriate way in which to report and analyze.

 

[AnonApprsr]

Where did you learn that? That statement is unequivocally false. An appraisal is as of a particular effective date - not before and not after. Whether the sales were consummated before or after that one date is irrelevant. If I view a property on a Monday, and a physically similar and proximate sale is consummated on Wednesday, and I write the report on Friday - it's all good, unless the market changed materially between my effective date of Monday and the comparable's sale date of Wednesday. If the market changed either prior to or subsequent to the effective date of the appraisal, I must compensate for that change. If the market has remained materially static, then I do not need to compensate for anything.

This is appraisal 101 stuff folks - not rocket science.

You're wrong.


If you were right than what the hell is the point of an effective date? Might as well just keep updating the appraisal for free every 2 weeks for the life of the loan. No point of an effective date if you don't use it as an...*drum roll* EFFECTIVE DATE.

 

[Couch Potato]

You're wrong.


If you were right than what the hell is the point of an effective date? Might as well just keep updating the appraisal for free every 2 weeks for the life of the loan. No point of an effective date if you don't use it as an...*drum roll* EFFECTIVE DATE.

You obviously have no concept of what the effective date represents.

 

[AnonApprsr]

"The effective date of the appraisal.... reflect(s) the time period relevant to the assignment results...." (107, Page F-51, USPAP 10-11)

Perhaps you have no clue what's going on at all? Maybe not just appraising either....

 

[Delta85]

Adding comp data after the effective date also opens the doors to all kinds of crazy challenges to value. Where do you draw the line? A day later? A week later? I can just see a realtor or LO coming up with a perfect sale that closed a few days after the effective date and then the pressure begins to mount for the appraiser to change his opinon or address why he won't. If this trend of using data from after the effective date catches on and enough appraisers jump on board then believe you me you'll be getting challenges right and left with sales days, weeks, and even months after the effective date and opinions of value will become a living, breathing number that can change over and over again.