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Location adjustment

Discussion in 'General Appraisal Discussion' started by DeKay Bayliffe, Jun 23, 2008.

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  1. DeKay Bayliffe

    DeKay Bayliffe Sophomore Member

    0
    Oct 16, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    Alaska
    I'm appraising a home in a neighborhood that is known for it's drug trafficking and run down properties. The sujbect is on the outside of the subdivision, but still will not bring in as much as if it were elsewhere. Does anyone have any good advice on how to explain...without violating USPAP? Thanks
     
  2. CANative

    CANative Elite Member

    67
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    How do you know it will not bring in as much as if it was elsewhere?
     
  3. Michigan CG

    Michigan CG Moderator Staff Member Moderator

    100
    Nov 1, 2006
    Professional Status:
    Certified General Appraiser
    State:
    Michigan
    Cite police statistics. As for the run down properties, put 6-10 pictures in a photograph addendum and include it as part of your neighborhood analysis.
     
  4. Michigan CG

    Michigan CG Moderator Staff Member Moderator

    100
    Nov 1, 2006
    Professional Status:
    Certified General Appraiser
    State:
    Michigan
    Maybe he is geocompetent and knows the area well?
     
  5. Smokey Bear

    Smokey Bear Elite Member

    0
    Dec 8, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Just demonstrate the value differences from your market analysis.
     
  6. DeKay Bayliffe

    DeKay Bayliffe Sophomore Member

    0
    Oct 16, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    Alaska
  7. Hamlet

    Hamlet Elite Member

    0
    Aug 14, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    Ohio
    I would also use the market adjust you were able to derive for the locational adjustment on your grid as part of your explanation. That is evidence also that there is a negative influence without violating the PC police.
     
  8. timd354

    timd354 Elite Member

    58
    Jan 11, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Maryland
    if you use comparable properties which are located within the same or neighborhoods with similar appeal as the subject property, then would be no need for any adjustment. Tread very carefully here, lest you be accused of redlining or worse. As far as citing police crime statistics, what good does that do? If you are making a location based adjustment for a comparable property from a different neighborhood, you extract the amount of the adjustment from difference in sales prices between that neighborhood and the subject's neighborhood, not from the differences (if any) in real or perceived crime rates. Remember, you are an appraiser, not a sociologist. Just report the facts as far as market values are concerned. If similar properties in comparable neighborhood 1 have a median sales price which is 10% more than similar properties in the subject neighborhood, just make a 10% adjustment and explain that property values are 10% higher in the competing neighborhood and how you made this determination. There is absolutely no need to get into differing crime rates, etc.
     
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