Are they market value? Those Zillow purchases and now their sales of the properties they bought. There is a reason to ask. Recently, a state appraisal board took an appraiser “behind the woodshed”. Why? That state board sanctioned the appraiser for (among other reasons) using ibuyer sales and purchases as comparable sales. Really?! Yes! As the board explained, those sales did not meet the qualifications of market value. Why? because the buyers were ibuyers, not traditional purchasers. Yet the board did not explain the market evidence it used to reach that conclusion credibly. No bias there, right?

But, are they market value? After all, the ibuyers ballyhooed their purchase algorithm. They based their purchases on it. Not just Zillow, but all of the institutional ibuyers. And the sellers did not need to accept the offers of the ibuyers. They could have rejected them, right? They could have hired an appraiser to tell them their property’s market value, correct? Were there no brokers available to advise them on a reasonable listing price? So, to say the ibuyers took advantage of those sellers is an exaggeration.

But, again, are they market value? Did those sales meet the qualifications of the definition of market value? In this podcast, Tim Andersen, The Appraiser’s Advocate, examines this question and its possible answers. If they did, then that state board was wrong to sanction the appraiser. After all, the appraiser merely used credible comparable sales. And if those sales were too funky to meet market value? Then the state was right to sanction the appraiser. But who was right, the state or the appraiser? Could they both be right? Is it possible both were wrong? Tim covers these questions in a thought-provoking way. You may not like his answers. But at least you thought about the questions! Thanks!