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mark

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Reply with quote  #1 
i am appraising for the purchase of a new construction townhome. it's the only new construction townhome project in the neighborhood.

the one i'm appraising is priced higher than any other sale so far. there are several comps in the project from a month ago at a lower price - same products, no real difference in upgrades, no real differences in seller concessions.

how can this price increase be supported ?
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Bobby

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Reply with quote  #2 
Is this for real?
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mark

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Reply with quote  #3 
the builder has others under contract at the higher price, but none closed at the higher price.
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mark

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Reply with quote  #4 
the builder just did an across the board price increase, and several are under contract at the increased price
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mark

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Reply with quote  #5 
I don't do much new construction at all. how do the first sales after a builder price increase ever appraise for the increased sale price ?
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Meatloaf

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Reply with quote  #6 
Mark, you are asking how to hit a number.

I can give you the answer, but I would like for you to suggest some scenarios on how you think you could handle it before I solve your problem for you.

I can hit that number and do it in a realistic and meaningful way while still adhering to USPAP and GA Laws.  But I want to see you think about it and discuss it before I give you the answer you are looking for.

So what do you think is the answer?

Here is something to ponder before you answer.  Think outside of the box and go back to basics that you learned when in your initial classes before you were registered.

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BillDing

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Reply with quote  #7 

Your job is not to hit the contract, however, you must consider the contract and vet it. Just like a comp, a contract can be a good indicator of value...it may not be, too. Don't be bias towards it and don't be bias against it. Make sure you contact the buyer and seller and their agents and grill them on the conditions of market value; does that sale meet the criteria found in the definition of MV?   - motivations, knowledge, financing, concessions, etc.

FNMA and dumbass AMCs like to box us in with closed sales bracketing, however, guidelines are not rules.  You say there are other pending sales?  Get them and verify the contracts with the agents/builder, including financing, sale price, etc.  You need to get other sales besides sales with the subject builder, out side of the subject's division.

You say there are other closed sales that are comparable to the subject that sold for less. This is a BIG deal. You need to find out why.  If they are older, then a upward sale price trend needs to support the higher price.  Maybe they are inferior.  Put on your detective hat and dig in.  Ask the agents.  You can ask the builder, too.  They can give you good insight to quality variances. However, since he has skin in the game, you are required to verify what he says as true - that is mandatory.

Good luck.


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Bobby

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Reply with quote  #8 
He is a CR, screw him...
Decline the work or turn in your license.  
Or start your post with "Mentor Needed".


That is the unconditional and known FACTS/REQUIREMENTS , and I'm sure there will be many cupcakes that disagree with my post for not using kid gloves.



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Meatloaf

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Reply with quote  #9 
I was offering to help, but I wanted to see what he had first.

Sometimes we all forget where we came from.  There is a book on Amazon Its called 'Appraisal 101: Hitting the number' that I suggest that you take a look at.

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Bobby

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Reply with quote  #10 
Hell, USPAP is required every other year.

I'm not saying you have to know everything, but this is ridiculous.

Even BillDing is telling a CR what his job is...  "Good luck" is an understatement.







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Meatloaf

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Reply with quote  #11 
I like BillDing.  He argues a point but he often gives up too easily.

Sounds like this Mark dude doesn't have any thoughts on where to start.  He is just going to kill this deal.  

Killing a deal due to ignorance is no better or worse than hitting a number due to ignorance.  Learn what the market is saying and have confidence that you have done it correctly.  Beg someone to differ with your opinion as you are confident that you are right.  Killing the deal because you are a chicken is just as bad as hitting a number to avoid having to explain yourself.

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Bobby

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Reply with quote  #12 
I wasn't arguing against BillDing. I just don't know how you obtain a CR license and need to be spoon feed appraising 101. It seems like mark needs to share the luck.



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Meatloaf

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Reply with quote  #13 
Dudes got a four digit license number too.
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Bobby

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Reply with quote  #14 
I'll have whatever he is having...

Inconceivable!

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Meatloaf

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Reply with quote  #15 
He will be loosing a client soon.  As soon as he kills that supportable deal.
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PCB2

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Reply with quote  #16 
Mark,

Just curious.  How much of an increase in price is your subject vs the closing price on the last similar sale? 

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Nomad

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Reply with quote  #17 
You have other market participants paying the higher price w/ other pending sales. What do you not understand? This is an easy one. The ones with no other pending or actives and a higher price are a little more difficult.
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Meatloaf

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Reply with quote  #18 
Well.... did you hit the number or not?
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BillDing

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Reply with quote  #19 
Quote:
Originally Posted by Meatloaf
I like BillDing.  He argues a point but he often gives up too easily.
Every time we debated I kicked your ass. Just because your body twitched a little, doesn't mean there was anything left for me to fight. [crazy] [biggrin]


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Meatloaf

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Reply with quote  #20 
Leaving the forum and not peeping your head for 3 months hardly indicates an ass was kicked.  Looks like you wimpered off with a tail between your legs.
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DanPicou

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Reply with quote  #21 
I see things have not changed much in my absence. Who is this child meatloaf??
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Meatloaf

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Reply with quote  #22 
A pimp.
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