MORE LIES AND PROPAGANDA FROM THE APPRAISAL INSTITUTE, THEY JUST WON’T QUIT.

MORE LIES AND PROPAGANDA FROM THE APPRAISAL INSTITUTE, THEY JUST WON’T QUIT.

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Appraisal Institute Helps Appraisers Choose (NON ARMS LENGTH AND DISTRESSED SALES AS) Comparable Sales in Declining Markets
Posted by Appraisal Institute Staff on Thu, Jan 19, 2012

The nation’s largest professional association of real estate appraisers published guidance this week to help appraisers know when and how to use distressed sales, such as foreclosures, as comparable sales. (YES! USE A NON-MARKET, DISTRESSED SALE, THEN HIT IT WITH A NEGATIVE TIME ADJUSTMENT. MAKES A LOT OF CENSE RIGHT, WRONG! YOU HAVE NOT ONLY USED INAPPROPRIATE DATA YOU HAVE HIT IT WITH AN UNSUPPORTED TIME ADJUSTMENT. ) Such knowledge is particularly crucial in the current market where distressed sales are common, creating complex valuation challenges. (WRONG! NOTHING AT ALL IS COMPLEX ABOUT THIS PROCESS, YOU USE DISTRESSED SALES WHEN YOU WANT A DISTRESSED VALUE AND MARKET SALES WHEN YOU WANT TO MEASURE “MARKET VALUE.”)
The Appraisal Institute noted that appraisers often use comparable sales (or “comps”) to help develop an opinion of value. But in today’s distressed real estate market, many potential comparable sales represent foreclosed properties. (A NON-ARMS LENGTH TRANSACTION IS NOT COMPARABLE TO A MARKET TRANSACTION, STOP, YOU ARE DRIVING THE ENTIRE U.S. ECONOMY INTO THE TOILET-BANKRUPTCY.) Some owners have complained their home’s values have fallen because appraisers have used such sales as comps. (DUH!!!! PRETTY SCARY WHEN THE NOVICE KNOWS MORE THAN THE SO CALLED, PROFESSIONAL, MAI, SRA, APPRAISAL INSTITUTE.)
The Appraisal Institute’s “Guide Note 11: Comparable Selection in a Declining Market” notes that “transactions used in an appraisal assignment require adjustments for changes in market conditions.” (THIS HAS BEEN ADDRESSED ABOVE AND IN OTHER NOTES BY THIS AUTHOR.)
According to the Appraisal Institute, qualified and competent appraisers (PROPAGANDA) with local market knowledge are capable of using their experience and education to determine when – and how – to use distressed sales as comparables. These appraisers know what adjustments to make, if any, when using distressed sales as comparables, for such methods are taught in basic coursework and updated seminar materials available to professional appraisers. (NOW EXCUSE THE LANGUAGE BUT THIS IS A BLATANT OUT AND OUT LIE. SEVERAL YEARS AGO I TOOK ONE OF THESE “UPDATED SEMINARS” WHERE THEY WERE PROMOTING THE USE OF REO AND SHORT SALES AS COMPARABLES AND I STRONGLY OBJECTED. MY OBJECTION RECEIVED A SIMILARLY STRONG REPLY FROM THE INSTRUCTOR. I GAVE HIM AN AUTHORITY, THE LOS ANGELES COUNTY ASSESSOR, WHO REJECT THE NOTION THAT ONE SHOULD USE DISTRESSED SALES AS COMPARABLES IN AN ATTEMPT TO GET MARKET VALUE. TO WHICH HE REPLIED “DO YOU THINK I CARE ABOUT THEM!”
The Appraisal Institute’s Guide Note says: “A declining market will likely exhibit very little sales activity. When the sales comparison approach is necessary, but there are virtually no current sales in the market area to analyze as comps, the appraiser must: 1. Expand the geographic area for comp search, then adjust for location as appropriate, and/or 2. Use less recent sales, then adjust for market conditions as appropriate.” (NOW DO I DETECT AN INCONSISTENCY? HOW DOES NUMBERS 1, AND 2 PRIOR RECONCILE THE USE OF DISTRESSED SALES AS COMPARABLES?)
Designated members of the Appraisal Institute – such as those who have earned the MAI (commercial/general) or SRA (residential) designation – are among the appraisers capable of properly performing difficult assignments (PROPAGANDA) such as those found in today’s challenging real estate market. They have achieved levels of education, experience, standards, ethics and peer review above those of licensed or state certified appraisers. (REMINDS ME OF MY COUSIN WHO ONCE BRAGGED THAT HE HAD, OVER HIS LIFETIME, DRIVEN MORE THAN 50,000 MILES. MY RESPONSE, KNOWING HIM, WAS TO BAD 25,000 MILES WERE THE WRONG WAY.”
Click here to download the Appraisal Institute’s six-page pdf of “Guide Note 11: Comparable Selection in a Declining Market.”
If you have an “opinion of value,” please share your comments.

IN THE FINAL ANALYSIS THE APPRAISAL INSTITUTE AND THE APPRAISAL FOUNDATION ARE, FOR SOME REASON, PROMOTING THIS PRACTICE WHICH HAS SET THE REAL ESTATE INDUSTRY BACK 10 YEARS. HOW FAR WILL IT GO? IT’S UP TO YOU. WE ARE A VERY SMALL BUSINESS AND ENCOURAGE YOU TO ALERT EVERY HOMEOWNER, REALTOR, REAL ESTATE INVESTOR TO PROTEST! EMAIL ME @HARRIS_CURTIS@SBCGLOBEL.NET

MORE LIES AND PROPAGANDA FROM THE APPRAISAL INSTITUTE

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