 apexoffice
Moderator
Joined: 09 Jul 2008
Posts: 122
Location: Atlanta, GA
38.40 Dollars($)
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 Posted: Wed Sep 24, 2008 5:49 pm Post subject: |
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Hey kcleveland,
You actually bring up a very good question. The quick and easy answer is "no, they are the same with the exception of a few statements in the report and the analysis of the sales agreement. The methods used for developing an opinion of value are the same and the data is the same."
With that being said, in some cases, the sales contract can have an impact on the appraiser's opinion of value which obviously would not be available on a refinance. Most residential appraisals are based on "Market Value" and the definition of market value (according to Fannie Mae) is: the most probable price which a property should bring in a competitive and open market under all conditions requisite of a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereeby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he/she consideres his/her own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in US dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
When a sales agreement is presented and the results of the appraisers analysis concludes that the agreement fits within the guidelines of the definition of market value, the appraisers opinion may be affected by the agreement.
As an example: If the range of comparables sales in the market is between $140,000 and $160,000, and the sales contact shows a sales price of $150,000 and meets the requirements of a fair sale, that is usually a good indication of the market value. Without the contract, in the case of a refinance, any number within that range may be considered reasonable based on the opinions of the appraiser.
This does not mean that just because the contract is $150,000, the appraiser will automatically report an opinion of exactly that number, but in most cases it will be given serious consideration. It may still vary slightly based on the appraisers observations and opinions of the direction in the market.
I hope this helps.
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Benjamin Smith
Atlanta Area Appraiser
Apex Appraisals & Consulting, LLC
www.appraisalapex.com |
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