Frankly the quote by CNN was meaningless and another sign of ignorance being injected into short sound bites.

I disagree that 15 sales with none being killed by low appraisals is the least bit unusual. During the entire time I was an agent from 1971 to 1974 and again from 1984 to 1986 I only had three low appraisals in my entire selling and listing career.

Was that ‘unusual’? Perhaps. Though it may also have been good training by very seasoned brokers who insisted that the listing folder ALSO include no less than six closed comparables to support the asking price. It also included a weekly review by ALL the agents in the office as to whether the price was reasonable.

I don’t know what a “frothy” market is. More importantly the area in which such a market was found by the author has not been defined.

“Anyone who took Econ 101 and managed to stay awake for even half of the lecture classes heard all about the laws of supply and demand, but interestingly these laws make no mention of true or fair value.”

Oddly enough NEITHER DOES most real estate appraisal! USUALLY we deal with “Market Value” as defined in FNMA guidelines (among others).

“True Value” has no legal or accepted definition that I am aware of (and my own website includes many value definitions).

“Fair Value” is a very old, accounting based phrase that is usually referred to as “Fair Market Value” and it has numerous definitions depending on its intended use. IRS alone has over eight (8) separate definitions for it.

I don’t mean to ‘nit pick’ or otherwise pick on the author. His firm is a highly respected E&O insurance firm. (One I have used myself, until I shopped rates.)

That CNN or NAR have yet again jumped on a sound bite to describe a complicated (presumably national) market, is no surprise. That anyone gave it any credence, is.

I hope the author will keep blogging. It gives those in the industry an opportunity to post and exchange views. Even differing views. Thank you.

Read more: If They Said It, It Must Be True | Appraisers Blogs
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