Comments for Round Robin Apppraisal Discussions http://moodyappraisal.com/RoundRobinDiscussion Just another WordPress weblog Mon, 01 Aug 2011 03:07:33 +0000 http://wordpress.org/?v=2.9 hourly 1 Comment on Fair Market Value by Tula Perie http://moodyappraisal.com/RoundRobinDiscussion/?p=1&cpage=1#comment-594 Tula Perie Mon, 01 Aug 2011 03:07:33 +0000 http://moodyappraisal.com/RoundRobinDiscussion//?p=1#comment-594 The author spoke about some interesting points here. I found it by searching Google and I've got to confess that I am currently subscribed to the site, it is very good :) The author spoke about some interesting points here. I found it by searching Google and I’ve got to confess that I am currently subscribed to the site, it is very good :)

]]> Comment on Fair Market Value by Round Robin 1 http://moodyappraisal.com/RoundRobinDiscussion/?p=1&cpage=1#comment-593 Round Robin 1 Sun, 31 Jul 2011 16:58:37 +0000 http://moodyappraisal.com/RoundRobinDiscussion//?p=1#comment-593 As stated before IRS says, "If parties with adverse interests place a value on property in an arm's-length transaction, this is strong evidence of FMV". Appraiser's try to avoid anything that is not an arm's length transaction as a basis of an opinion of value, this would include a foreclosure sale and most short sales if the prospect for foreclosure is in play while the short sale is being negotiated. REO (Real Estate Owned) properties, those that are owned by the bank and which are subsequently sold in the market would be considered closer to an arm's length sale. The trouble with Zillow and other automatic valuation systems is that they really don't take into consideration that many sales in the market are duress sales with foreclosures being a very real possibility if the short sale does not go through. Some Realtors fall into the same trap, allowing something short of an arm's length sales to be analyzed as support for fair market value. I would caution you to be very careful when considering a short sale of your property to make sure that you are coming a close as possible to a true fair market value. Once the deal is done and the 1099 income is reported by the bank IRS will look to you for the payment of the income tax. Depending on your tax bracket this may or may not be to your advantage. Sometimes it might be better to offer the bank a small note to make them happy. As stated before IRS says, “If parties with adverse interests place a value on property in an arm’s-length transaction, this is strong evidence of FMV”. Appraiser’s try to avoid anything that is not an arm’s length transaction as a basis of an opinion of value, this would include a foreclosure sale and most short sales if the prospect for foreclosure is in play while the short sale is being negotiated. REO (Real Estate Owned) properties, those that are owned by the bank and which are subsequently sold in the market would be considered closer to an arm’s length sale.

The trouble with Zillow and other automatic valuation systems is that they really don’t take into consideration that many sales in the market are duress sales with foreclosures being a very real possibility if the short sale does not go through. Some Realtors fall into the same trap, allowing something short of an arm’s length sales to be analyzed as support for fair market value. I would caution you to be very careful when considering a short sale of your property to make sure that you are coming a close as possible to a true fair market value. Once the deal is done and the 1099 income is reported by the bank IRS will look to you for the payment of the income tax. Depending on your tax bracket this may or may not be to your advantage. Sometimes it might be better to offer the bank a small note to make them happy.

]]> Comment on Fair Market Value by daria brown http://moodyappraisal.com/RoundRobinDiscussion/?p=1&cpage=1#comment-592 daria brown Thu, 28 Jul 2011 02:05:51 +0000 http://moodyappraisal.com/RoundRobinDiscussion//?p=1#comment-592 Very interesting; So how is fair market value determined in this market with so many foreclosures, short sales and REO sales in the market? Very interesting; So how is fair market value determined in this market with so many foreclosures, short sales and REO sales in the market?

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