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Fran

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Reply with quote  #1 
Can someone tell me what is going on?
I have not had an appraisal to meet contract price in 2 weeks . I know it is not my job to make contract price however, it is frustrating to have to deal with the reconsideration requests, and negative remarks . Two different realtors  sent comps 3 miles away totally ignoring the closed sales subject subdivision. 

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Meatloaf

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Reply with quote  #2 
You are doing it wrong.

Do more research and grow fuzz on the peaches.

Look at the market we are in and THINK.  How could it be worth less than the contract price right now?

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RubberStamp

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Reply with quote  #3 
We just went through all of this on another thread Fran.  Meatloaf and BillDing feel every contract is market value.

The rest of us say to do your due diligence and make your best effort to take into account the current inventory of competing active and pending listings.  It is the agents job to sell..  yours to appraise.  But if no one can send you support you can't just make it up.
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Meatloaf

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Reply with quote  #4 
Do the listings and pendings support your contract?  If so, then you need to THINK.

If not, then its deal killing time.

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RubberStamp

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Reply with quote  #5 
Meatloaf.  Scenario:  You have two active listings on the street at the same price as the subject.  All other sales in subdiv (10+) are similar but $25k less.  Even if you use the 1004MC for a positive time adjustment you are only gaining 1-2% over 6 months.  Then like Fran says..  your only support is 3 miles away - passing over about 100 other similar sales below your pending sale.

The active listings support the contract price. What do you do?
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Meatloaf

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Reply with quote  #6 
What would YOU do?
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BillDing

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Reply with quote  #7 

Quote:
Originally Posted by RubberStamp
 Meatloaf and BillDing feel every contract is market value and you should cherry pick to never blow up a deal.

Does it make you feel better to lie like that?


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BillDing

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Reply with quote  #8 
Let me ask you something, rubber.  If you had no sales in the subject's immediate area, would the subject have value?
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RubberStamp

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Reply with quote  #9 
Quote:
Originally Posted by BillDing

 

Does it make you feel better to lie like that?


I didn't mean to lie BillDing and don't confuse this with me not appreciating your comments.  You make this forum useful. It's possible I lumped your comments and Meatloafs together.   That is what I took from past comments.  I believe both of you have said that you have yet to find a contract you could not make value on this year.  Meanwhile appraisers like Fran haven't seen one they could make in several weeks.    There's a large disparity here. 

The point I'm making is that we are looking at two extremes here.  There may be appraisers like yourselves that have found a way to make every contract work.  Others are stuck in a rut and have no training on how to handle a rapidly inflating market. 

I say do not rule out that the entire appraisal process is "supposed" to act as a break when demand begins to far outweigh supply during a short period.  They are the ones that set the guideline that only closed sales may be reconciled.  Actives may be support, but they would still require you to have 1 sale that sold higher - and also that closed sale price must be higher than your appraised value before adjustments.  So the whole process is heavily stacked against positive time adjustments.

When you have two extremes the middle way is typically the right way.

Quote:
Let me ask you something, rubber.  If you had no sales in the subject's immediate area, would the subject have value?                 


You are now referring to a completely legitimate reason to venture outside typical guidelines.  Fran's comment was that they would have to ignore obvious comparable sales in the sub div and then lean entirely on sales 3 miles away..
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RubberStamp

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Reply with quote  #10 
Quote:
Originally Posted by Meatloaf
What would YOU do?

Here is your scenario where just the listings  support a contract price as all the support I need.  Put your theory to the test.

I see no way that this theory holds up but I'm willing to have an open mind.
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MEP

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Reply with quote  #11 
I did a refi two weeks ago...the owner is an "Agent"...they paid $165 and spent $100 - 130k updating the property...the area is not the best...in fact a few days before I did the report a man was killed, within 1/2 mile of  the subject,  while pumping gas into his car...anyway, the "Agent" sent me a comp from Mid town...I flatly said NO!
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Nomad

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Reply with quote  #12 
I've only killed one purchase deal in the last year. You can thank me for that money comp you end up using.
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Bobby

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Reply with quote  #13 
Quote:
Originally Posted by RubberStamp

 

I say do not rule out that the entire appraisal process is "supposed" to act as a break when demand begins to far outweigh supply during a short period.  They are the ones that set the guideline that only closed sales may be reconciled.  Actives may be support, but they would still require you to have 1 sale that sold higher - and also that closed sale price must be higher than your appraised value before adjustments.  So the whole process is heavily stacked against positive time adjustments. 


I get your frustration but I don't agree with this theory.  We report, we don't control. 
If one acts as a brake, it must also act as the opposite, a gas pedal.  Ying and yang, a fundamental process for our known existence.

I can't support every sale, but I sure have bulletproof evidence if I can't.  Most of the time the agent can't either.  If the property is worth it, I would think that the borrower would make up the difference with cash on their end.  99.9999999999% of the time they won't.






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RubberStamp

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Reply with quote  #14 
Quote:
Originally Posted by Bobby


I get your frustration but I don't agree with this theory.  We report, we don't control. 
If one acts as a brake, it must also act as the opposite, a gas pedal.  Ying and yang, a fundamental process for our known existence.



Bobby - Not saying its my theory it is more a product of design.  If values are more typical to increase then to be a gas peddle we would be allowed to lean full weight on pending sales and listings.   However as it is designed..  closed sales will always be many weeks in the past typically..   so more apt to be a brake peddle.   Just a moderate one... but 5k can make people pretty chippy.

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treskirkland

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Reply with quote  #15 
I think there is a problem if you never have an appraisal come in below a contract, but I also think it is also a very serious problem if all your appraisals are coming in below every contract too.  It looks like you are missing something that is going on in your market.
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Jman

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Reply with quote  #16 
Why would the buyer want to pay more than market? If my appraisal comes in below contract the buyer should be thanking me and using the appraisal as a wedge. But I get comps from the listing agent? WTF! Why are all the suggested sales more and none are less? Ask that question. The lower sale should be bringing your subject up also, if the market is truly improving. If the lower sales aren't valuing up and you have listings below then there's your answer. Stick to your guns and have reasonable explanations then move on. We're not the brake or the gas pedal, we're the caution sign.
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Nomad

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Reply with quote  #17 
Keep in mind folks that the board doesn't come after you for value unless there is a more than 10% discrepancy. I also have a cousin who works for a company who's clients are PMI companies looking for a way out of covering claims. There threshold on appraisals being the reason is also 10%. Appraise with confidence people.
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MEP

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Reply with quote  #18 
We are not in business to make values...bad appraisals cost the American People an incrediable amount of money over the past 10 years....But, I see appraisers go up to two miles in Smyrna for value...that is wrong!
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Nomad

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Reply with quote  #19 
Quote:
Originally Posted by MEP
We are not in business to make values...bad appraisals cost the American People an incrediable amount of money over the past 10 years....But, I see appraisers go up to two miles in Smyrna for value...that is wrong!


I wouldn't recommend performing "bad" appraisals. I just get frustrated with appraisers who don't understand the definition of market value and also what aneffective date is. They get caught up with what sold 3 months ago vs. what the market participants are dictating now. It's not just filling ina form with 3 recent sales. You have to understand the market and appraise accordingly which will require some creativity at times.
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BillDing

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Reply with quote  #20 

Quote:
Originally Posted by RubberStamp

I didn't mean to lie BillDing...


I've done plenty of appraisals under contract.  I'm sorry if anything I wrote led anyone to believe that the contract is always going to be market value...it's not.  I think if you go back to what I wrote it says that it CAN be a good indicator of value. That's a far cry from saying it IS a good indicator.


And Rubber...when the market indicates that the market value is higher than past sales, it is reason and support to go out of the area.  Oh...and no, there is not a USPAP violation if you do not bracket the sales price.

As far as us being a "brake", I don't agree.  That is bias, which is what we are NOT supposed to be.  If you feel that is our job, please post the link to USPAP, FNMA, FHA or even a reputable appraisal teaching that supports that.


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Lobatt

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Reply with quote  #21 
If you have a contract then you must appraise it at that price or higher. A contract IS the market.

Use this quote in your report. It will save you -

"Pendings, actives, people want houses in this area. High demand. Low inventory. Market forces. There is a contract. Agent has had a license for almost 13 months and knows the market. The buyers are tired of looking."

You are there to rubber stamp, not get in the way.

Don't worry about the last time all this same stuff was said back in 2006. They are not making any more land. Use a 3% down loan as your biding tool during negotiations. 20% down or cash at the closing table are for suckers. Taxpayers have the buyers back. The appraiser MUST make the deal work at the contract price because again, the contract price is the market price. Make the deal work.
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Bobby

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Reply with quote  #22 
Quote:
Originally Posted by Lobatt
If you have a contract then you must appraise it at that price or higher. A contract IS the market.

Use this quote in your report. It will save you -

"Pendings, actives, people want houses in this area. High demand. Low inventory. Market forces. There is a contract. Agent has had a license for almost 13 months and knows the market. The buyers are tired of looking."

You are there to rubber stamp, not get in the way.

Don't worry about the last time all this same stuff was said back in 2006. They are not making any more land. Use a 3% down loan as your biding tool during negotiations. 20% down or cash at the closing table are for suckers. Taxpayers have the buyers back. The appraiser MUST make the deal work at the contract price because again, the contract price is the market price. Make the deal work.


Image result for can't tell if you're serious

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Nomad

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Reply with quote  #23 
Quote:
Originally Posted by Lobatt
If you have a contract then you must appraise it at that price or higher. A contract IS the market.

Use this quote in your report. It will save you -

"Pendings, actives, people want houses in this area. High demand. Low inventory. Market forces. There is a contract. Agent has had a license for almost 13 months and knows the market. The buyers are tired of looking."

You are there to rubber stamp, not get in the way.

Don't worry about the last time all this same stuff was said back in 2006. They are not making any more land. Use a 3% down loan as your biding tool during negotiations. 20% down or cash at the closing table are for suckers. Taxpayers have the buyers back. The appraiser MUST make the deal work at the contract price because again, the contract price is the market price. Make the deal work.



I agree.  Thing is, they never asked you for a forecast.  They didn't then and they didn't now.  Now get back to work!
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Bobby

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Reply with quote  #24 
Value is based on "The buyers are tired of looking"...[confused]


"Agent has had a license for almost 13 months and knows the market"...[rofl]


This is comedy gold!

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