What Do You Consider To Be Data Sources And Verification Sources?

[Terrel L. Shields]

their motivations for wanting to sell

Agent usually knows, you are correct that outliers are generally not worth pursuing. But sometimes you need to find out why because reviewers ask why you didn't use that comp.

 

[residentialguy]

7 sales, each considered similar to the subject in physical characteristics.....
$80K, $100K, $101K, $102K, $103K, $103K, $125K...

$80K and $125K odd ball sales....
Why even bother to call the seller and buyer....
Because you're not going to even consider them...

The other 5 sales.....
Are you really going to tell me that you are going to track down both the seller and buyer of each of the 5 sales to ask them to provide you, a complete stranger, their motivations for wanting to sell and wanting to purchase the properties?????


I have to declare shenanigans!!!!!

Yes, I would. How would I know if it was an arm's length transaction or if the concessions affected the price, etc???? Closing your eyes and ears don't make things disappear.

 

[djd09]

"Looks like you sold this house two months ago for $200k is that right?

I have never called a realtor about a sales price. The county is the official source for prices.

 

[ucbruin]

Yes, I would. How would I know if it was an arm's length transaction or if the concessions affected the price, etc???? Closing your eyes and ears don't make things disappear.

"How would I know if it was an arm's length transaction or if the concessions affected the price, etc????"


Shenanigans!!!!!!

Looks as if the information in your MLS sucks....
So sad for you.....

 

[djd09]

If there were concessions and they didn't list it , are you foolish enough to believe what they say now. They think it is 1999 still.

 

[Michigan CG]

If there were concessions and they didn't list it , are you foolish enough to believe what they say now. They think it is 1999 still.

Attorney for our MLS told the Realtors not to list concessions. The only way to get concessions is to call the Realtor.

 

[djd09]

Not in ohio.

Edit. NE ohio.

Do they send the purchase ageeement to you. Some of these dopey realtors can barely tie their shoes. But go ahead and call them. hearsay

 

[Mr Rex]

What difference does it make if it was an arms length transaction if it was consistent with the rest of the market data? Concessions effect the price. Ask someone. Verify that fact. I have never, ever, ever had a seller that I did verify the conditions with to say that the concessions were a consideration that effected the sales price. The definition of concession is that someone gave something up.

 

[residentialguy]

"How would I know if it was an arm's length transaction or if the concessions affected the price, etc????"


Shenanigans!!!!!!

Looks as if the information in your MLS sucks....
So sad for you.....

C&P a copy of your MLS that shows whether or not there was a close relationship between the buyer and seller. While you're at it, show me the where they discuss whether or not the concessions affected the price. And show me the selling agents notes on his view off the property's condition and quality, etc.

Then show me where USPAP and FNMA say that you have a pass to not doing the required verification as long as they're not oddballs.

 

[Deleted member 130081]

485 In developing a real property appraisal, an appraiser must:


486 (a) be aware of, understand, and correctly employ those recognized methods and techniques that are


487 necessary to produce a credible appraisal;


488 Comment: This Standards Rule recognizes that the principle of change continues to affect the

489 manner in which appraisers perform appraisal services. Changes and developments in the real

490 estate field have a substantial impact on the appraisal profession. Important changes in the

491 cost and manner of constructing and marketing commercial, industrial, and residential real

492 estate as well as changes in the legal framework in which real property rights and interests are

493 created, conveyed, and mortgaged have resulted in corresponding changes in appraisal theory

494 and practice. Social change has also had an effect on appraisal theory and practice. To keep

495 abreast of these changes and developments, the appraisal profession is constantly reviewing

496 and revising appraisal methods and techniques and devising new methods and techniques to

497 meet new circumstances. For this reason, it is not sufficient for appraisers to simply maintain

498 the skills and the knowledge they possess when they become appraisers. Each appraiser must

499 continuously improve his or her skills to remain proficient in real property appraisal.

In 1990 (before my time) I suspect an appraiser would feel pretty darn good about finding as many as 3 comparable sales they felt good about. Today, if I only have 3 comparable sales I feel good about, I start to question the quantity of the data in terms of being able to produce a credible result. If all I have are 3, then I would likely find it necessary to dig into those 3 very deeply and turn every stone possible. If I have 10 or more, the quantity of the data begins to trump certain things. In 1990, an appraiser did not have the internet and would likely not be able to easily produce a photo of a comp without going out to the property. Further, there were a few cases where an appraiser created a sale that did not exist. That scenario prompted the requirement to drive out the comp and take a photo. Today, we have access to property data coming from multiple sources, including satellite imagery. In 1990, a sales grid with dollar adjustments was at-best a loose theory/method employed. There was no way to cross-check an appraisers conclusions in the normal course of business. Today, we have the internet and the MLS that provides the data that could prove/support the adjustments made. However, what the availability of todays data actually proves, is that determining dollar adjustments in the specific/precise manner in which we do is in fact a judgement so often, that one could use the word always. Mind you, that does not mean adjustments are necessarily or absolutely not credible or market based (I happen to think they are likely credible most of the time, at least from a veteran appraiser), it just means it is impossible to extract them in the manner our lending clients probably think we are or are expecting us to, and that is another problematic issue altogether (lack of established expectations at the time of engagement).

These are 3 examples of how change has affected the appraisal industry, but the methods and techniques we employ have not adjusted to the times. Note the word necessary in line 487 of USPAP. The word itself requires an opinion. I think people become set in their ways. USPAP says we should not become set in our ways. USPAP also says we must do as our peers do. The whole thing is bit of a catch 22 or shoot-yourself-in-the-foot sort of scenario. If appraisers continue to assert that verifying a sale through the family dog is necessary, then it is. If appraisers continue to assert driving out comps is necessary than it is. If appraisers continue to assert specific dollar adjustments are supportable with direct market evidence (note the word direct), then that is incompetent or worse, fraud. On the last point and because the latter is worse, most (on both sides) plead ignorance. I do neither and think everyone else should too. We ought to be the ones telling the world how it is, not the other way around. If the client wants us to call the family dog every time, fine we'll do it. That doesn't mean we should then proclaim the task was also necessary for credible results by virtue of the assignment condition. If the client wants us to drive out comps and personally take a photo, fine we'll do it. That doesn't mean we should then proclaim the task was also necessary for credible results by virtue of the assignment condition. If the client want us to take a stab at providing specific dollar adjustments, fine we'll do it, but that doesn't mean we should also proclaim the method is possible or credible, again by virtue of the assignment condition.

This thread is about data and verification. USPAP says we must verify to the extent necessary for credible results AND says we must adhere to client imposed assignment conditions, until the point when the conditions adversely affect the credibility of the results. I think too many too often confuse a necessary task by virtue of assignment condition to be a necessary task by virtue of credible results. How often does a client require the cost approach, we go ahead and develop one, and then turn around and discredit the entire approach? I don't understand why that sort of thing is not consistent throughout the process and report.

The mortgage world, which is the bread and butter of our industry, wants a better, faster and cheaper appraisal. I happen to think it's possible. I don't see why we wouldn't all work together to make that happen for the benefit of all. The fist step is to admit the problem, and that goes for both lenders and appraisers.

Anyone like to watch the Antiques Road Show? Ever wonder how they "get away" with opining values such as $10,000 - $25,000? Its because of the client expectation of results. How do you suppose any of those appraisers would respond to a client telling them how to appraise the property? Not all appraisal problems can be solved in the manner in which the client would prefer. It is our professional obligation to point that out to them.