A local broker sent a broadcast e-mail to the majority of commercial appraisers in my market area, indicating that their appraisals are too high due to reliance on dated comps.  That is something I haven't seen before. 

This small brokerage firm has a reputation for solid ethics and is very successful, particularly in the last few years.  The broker's e-mail provided a number of recent transactions that the firm handled which had very low per unit price for multi-family land from a historical perspective. The broker's intent was to be informative but some recipients of the email took some offense.  I had a different perspective and thought the sales data was timely and immediately entered the comps into DataComp.

The broker's e-mail went on to indicate that there was a noticeably large gap between bank appraisals and their BPOs.  From an appraisal viewpoint, the reason for the gap is open to debate.  However, the broker's message continued that some local appraisers are "killing us both on opportunities and in the listing prices."

I think what the broker was really trying to communicate was the difference between market price versus market value.  Stephen Fanning MAI, John Blazejack MAI and George Mann MAI, wrote an article, Price Versus Fundamentals - From BubblesTo Distressed Markets,  for the spring 2011 Appraisal Journal addressing this very topic.  It is a worthwhile read.  I particularly like the quote from Warren Buffett, "price is what you pay- value is what you get."   

Mr. Mann wrote a different article for the RMA Journal that suggests to credit folks that requesting liquidation value (typically 60-90 days marketing period) may or may not be a good idea for the bank.  It's just an option.  Some of his clients indicated that liquidation value has worked against them in court proceedings since case law always refers to a "pure" (albeit, vague) definition of market value.  Other lenders have had examiners make them mark their loans down to liquidation value instead of market value.  There's not much consistency and there's lots of room for interpretation on all sides.

Misunderstandings may arise if the two concepts - market price versus market value are not truly understood.  And if you're on the appraisal side of things, you know that they are different no matter how hard that is to accept and report.  This brings up a valid point, that it is our responsibility as appraisers to communicate to our clients when this issue comes up. It will add value to you as a consultant.    And oh yeah, stop killing deals for brokers.  Just kidding!