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Appraisers Should Be Cautious of MLS Price Discrepancies: The Appraisal Journal

December 16, 2015 08:00 AM

CHICAGO (Dec. 16, 2015) – Prices reported in multiple listing services may differ significantly from prices reported on HUD-1 settlement statements and these discrepancies are likely to be larger during a market bust, according to an article published this week in The Appraisal Journal.

The Appraisal Journal is the quarterly technical and academic publication of the Appraisal Institute, the nation’s largest professional association of real estate appraisers. The materials presented in the publication represent the opinions and views of the authors and not necessarily those of the Appraisal Institute.

“Reported Price Errors: A Caveat for Appraisers,” by Marcus T. Allen, Ph.D., Kenneth M. Lusht, Ph.D., MAI, SRA, and H. Shelton Weeks, Ph.D., documents the magnitudes and signs of differences in prices reported in a multiple listing service in comparison to prices reported on HUD-1 settlement statements. The authors advise valuation professionals to seek additional sources to verify reported sale prices, especially when a sale price contradicts sale prices of comparable properties.

Marcus T. Allen, Ph.D., holds the Alico Eminent Scholar Professorship in Finance in the Lutgert College of Business at Florida Gulf Coast University. He is a state certified general real estate appraiser, a Practicing Affiliate of the Appraisal Institute, and he serves on the Academic Review Panel of The Appraisal Journal.

Kenneth M. Lusht, Ph.D., MAI, SRA, is a Distinguished Professor of Real Estate at Florida Gulf Coast University. He is a past president of the American Real Estate and Urban Economics Association and a past trustee of The Appraisal Foundation. He currently serves on the Academic Review Panel of The Appraisal Journal, and he is a recipient of the Richard U. Ratcliff award for paradigm shifting research in real estate valuation.

H. Shelton Weeks, Ph.D., is the department chair of economics and finance, the Lucas Professor of Real Estate, and the director of the Lucas Institute for Real Estate Development and Finance at Florida Gulf Coast University. He serves on The Appraisal Journal Academic Review Panel, and his research interests include pedagogical issues, corporate governance, and real estate.

Read “Reported Price Errors: A Caveat for Appraisers” in the Fall issue of The Appraisal Journal.

Also in The Appraisal Journal’s Fall 2015 issue:

“Estimating Market-Based Housing Capital Gains With Micro Data: Some Results from the Canadian Survey of Household Spending,” by Kul B. Bhatia, Ph.D., presents a technique for estimating housing capital gains that uses actual real estate prices and hedonic regression – rather than large survey data – to produce household-specific estimates of accrued capital gains over a number of years.

“Real Estate Research,” by Randall Bell, Ph.D., MAI, and Michael P. Bell, discusses research methods in real estate valuation through a lens of epistemology, which is defined as “the study of what we know or believe.” The authors propose that understanding the depth of available knowledge about any particular assignment can result in more reliable opinions of value.

“What’s In Your Work File? What Appraisers Need To Know About Discovery,” by Mark Lee Levine, Ph.D., JD, LLM, MAI, and Stephen F. Thode, DBA, outlines the types of documents that could be deemed discoverable in the event of litigation. The authors review the discovery process, discuss the likelihood that certain documents may be discoverable and explain how the law on discovery impacts valuation professionals.



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The Appraisal Institute is a global professional association of real estate appraisers, with nearly 21,000 professionals in almost 60 countries throughout the world. Its mission is to advance professionalism and ethics, global standards, methodologies, and practices through the professional development of property economics worldwide. Organized in 1932, the Appraisal Institute advocates equal opportunity and nondiscrimination in the appraisal profession and conducts its activities in accordance with applicable federal, state and local laws. Individuals of the Appraisal Institute benefit from an array of professional education and advocacy programs, and may hold the prestigious MAI, SRPA, SRA, AI-GRS and AI-RRS designations. Learn more at




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