LJ;450917 wrote: I am guessing that at some point during the next 20 years, there will be a major push to have real estate valued as an average of open market bids, not based off of sale comps and underlying "value".

LJ;451819 wrote:Yes it does affect the WHOLE market. Because the bank's balance sheet is where the definition comes from. Bank Owned properties are not just on balance sheets, the LTV on mortgages held by banks is on the balance sheet as well. The market value IS determined by appraisers, because all they are doing is reporting the market PRICES combined into an average to determine market value.

Steel Valley Football;451825 wrote:No were ARE NOT averaging all the market prices combined - where on earth did you get that?


Banks balance sheet do not determine market value. That's absurd. Market value is present when banks aren't even involved in the transaction. Does a house purchased with cash not have a market value? Think about what you are saying.

Market Value is not exact science, but an introduced concept from individuals and companies as a business tool

LJ;451830 wrote:THINK about where you came up with the drivel you just said that has nothing to do with what I said.
bank loans person $150k on a house that appraises at $185k and sold for $150k. The LTV is 81%. Turns out, that house would never ever bring $185k, the bank's balance sheet is off on their liquidity. It has nothing to do with bank owned or not. It has everything to do with the stated and the real value of the property.

Also, when there is never a bank involved, market value plays 0 role. That is where market price and fair value come into play. Your bank ordered 'market value" makes no difference. A house sold for cash only involves the buying and selling parties. "Market value" is a banking and accounting industry term and not a market term. It's a theory.

Steel Valley Football;451849 wrote:Why did the bank loan 100% of the sale price? Sound like a bad business practice to me. Also sounds like a loan officer coerced a shady appraiser and sold the bank a bad loan.

RE: theory...does market value not exist in practice then since it's only a theory? Appraising houses is only a theory also. It's not a science.

Steel Valley Football;451817 wrote:Market value is not determined by appraisers. Market value is determined by the market and REPORTED by appraisers. There's a big difference in those two statements.

....


Here's why I disagree that the FASAB's definition of market value is not what Con and I are debating. ...

LJ;451852 wrote:Dodge the statement.

Also, where did I say it doesn't exist in practice? I said it is a business practice and WILL be governed by FASAB, whether you like it or not.

Steel Valley Football;451866 wrote:So a theory is being governed by the FASAB? Also, bet they don't do away with appraisers and start loaning based on average market bid or whatever mess you just said.

Con_Alma;451857 wrote:???? I have debated no one.

After the market determines market value how do appraisers report it?

LJ;451869 wrote:sigh. The use of a theory is governed by FASAB. It's obvious that you have the narrow view of an appraiser, which is fine, but you don't understand the overall workings of the economy and how accounting works. You see, your whole industry is based on accounting standards, not the other way around.

Steel Valley Football;451876 wrote:Our whole industry arose because of fraudulent banking in the first place. Now the banks want to do away with appraisers so they can be frivolous again. The banking industry will need bailed out for a third time, mark my words. The taxpayers better start working harder to come up with the money for it. LOL.

Con_Alma;451874 wrote:Thank you for answering a question of mine. It must be a selective process.

If a property does not have a substitutable equivalent what might it's market value be?? For example the undeveloped land I spoke of that's required by the local City's planning commission to be used for an additional development entrance for emergency services.

LJ;451878 wrote:ok? Once again, nothing to do with what I said.

Con_Alma;451889 wrote:It's been my experience that most properties are unique in that they have a differentiating substance that entices the buyer to purchase over a another. Some simply have more than others.

How might an appraiser guess the market value of such a property as I described above knowing that's it's not a hypothetical but rather an existing scenario?

Would you state that a market value can't be determined?

Steel Valley Football;451938 wrote:What did you say?

LJ;451951 wrote:I said that "Market Value" is merely a theoretical business tool that is governed by accounting standards.

Steel Valley Football;451947 wrote:
Your property has commercial value - I only do residential and small income producing properties.

I have stated that, but not like that because that's not a true statement. It just can't be determined by me. I say "this assignment is beyond the scope of my expertise". LOL.

Con_Alma;451978 wrote:Got it. I appreciate your candor...at least on this post.

I know it has value ...it may have commercial value to the developer but it has zero commercial value to me. In fact the value it has to me has nothing to do with marketing it for sale.

I have heard that everything has a price. I have no intentions in selling it because I have plans for it. They may still be a pipe dream but I have no interest or need to sell it. The developer thinks I'm trying to gain a higher offer.

I really don't care what his offer is. I don't need the money and I want the land.

Steel Valley Football;451971 wrote:A theoretical definition based on how they can best describe how the real market works. The only way to change the definition is change the market. FASAB didn't write that definition either. The definition I've been posting, I mean.

LJ;452051 wrote:But the appraisal "market value" ISN'T how the market works. The market works off of market price and fair value. Market value is merely an accounting tool. Even the write up on wiki says this.