The moral of the story is to be tired of experts, brokers and agents, especially those who engage in costly scams and train their employees so that they never realize that they are helping and falling asleep. Of course, the purpose of this article is not to explain why or how valuations sometimes come below the agreed purchase price. As the title suggests, most purchase valuations should be slightly higher than the purchase price. Market dynamics make this the case. Don`t let my classmates get ashamed or distressed the next time someone asks why the evaluators “are always just above the purchase price.” Take the opportunity to educate them and explain why this is the reason. Better yet, send them a copy of this article and save your breath. My biggest “failures” on market value were cash sales, for which there is no “verification.” I have spoken to evaluators who have been working in the same market for more than 20 years, and they often find that the learning process never stops in a market. Part of this learning is to determine what the buyer sees in a given transaction. The biggest gap is usually in high-end homes, where there is often a lack of sales in the same category. The market in which I work is heterogeneous, which reinforces the task of distinguishing buyer preferences. It is therefore an art and not always a scientific enterprise. The current focus is the definition of regression adjustments.
I feel that it is important to do the analysis, but it is much more important to know what to expect than to do a precise adjustment analysis. I feel that the market is generally rational, but it is increasingly influenced by regulation. Again, an assessment is not a fact. It`s a value notice. Of course, a qualified professional and with accurate market data, he makes his opinion on the value of your home trailer around the Thanksgiving table more reliable than Uncle Leroy, but it`s still not an exact science. As it`s not as simple as 2/2/4, there`s room for interpretation. Let two assessed appraisers review and evaluate the same property, and although they analyze the same market data, they generally do not agree on value.