Market Conditions Analysis and Time Adjustments Dilemma

[J Grant]

All those tools and software are there to help speed up your market analysis. They’re doing the same work you could do manually, just way faster. If you're getting weird or ridiculous results, it’s probably an issue with the data you’re using, not the software (with maybe a few rare exceptions).

The tpopls and sofaware are not "doing the smae work we could do manually" . Analysing data is not manual work. It is intellectual work involving judgment and experience. The appraiser should apply that knowledge to filter the data before using the software, which means it is not quite as fast. Then again, appraisals were not designed to win in a speed race.

The data spit out from software without the appraiser's professional analysis applied can be meaningless or contracicotry ( that is what the reviewers are picking up on ) .

 

[Tim Hicks (Texas)]

Using these tools can skew the appraisal the wrong way also. Fannie/Freddie wants the market to be all cookie cutter/same quality/same condition and the real estate market just does not operate in a sane linear fashion. They want it do so but simply does not. "We have the data, we know what it shows." Yes, it may show the big picture, but not every picture will fit.

Example: Rural property with 1200 sf GLA, no garage on less than a half acre lot. Comparable sales are 8-10 miles in different directions and not that similar. I found two similar 1200 sf homes with no garage and several slightly larger home with two car garages for comparison. The underwriter wanted to know why their third party adjustment data did not support the garage adjustments or the GLA adjustments. My answer was this is exactly why third party adjustment data may not always be accurate. The opinion of value was based on the two sales with similar GLA and no garage and the GLA and garage adjustments were based on those two sales. Their third party adjustment data was probably including city properties and city data, not rural properties.

 

[Terrel L. Shields]

Do you still drive a stick shift transmission

3 on the tree

 

[Zoe]

The tpopls and sofaware are not "doing the smae work we could do manually" . Analysing data is not manual work. It is intellectual work involving judgment and experience. The appraiser should apply that knowledge to filter the data before using the software, which means it is not quite as fast. Then again, appraisals were not designed to win in a speed race.

The data spit out from software without the appraiser's professional analysis applied can be meaningless or contracicotry ( that is what the reviewers are picking up on ) .

The thing that scares me on the software is what are they putting in? Are they even putting in properties that compete with the subject property?

That is the bottom line. If the properties don't even compete with the subject? Garbage in garbage out.

 

[weird_limbs]

I believe that worry would only apply to the one software that might be selecting sales data for you (Is it TrueTracts?). All (or most) of the other tools out there just use whatever sales data you choose to feed into them. You should always have full control over the data being used.

 

[Tom D]

Spark, you put in the neighborhood or competing sales. Then you have 1 linear line and 4 different non linear lines to choose, depending on the flucuations. I posted to look at the spark utube video on it. It made me understand how it works. And why you need to have different non linear lines to get the right trend. And it does all the explaining fannie requiers on a page. All i have to do is pick the data and line i want to use. Takes a couple of minutes.

But some of the dopes on this post have neither studied it, or even understand it.
And we're the brightest here?

 

[Mark K]

3 on the tree

Ahh. My first and second cars.

I have said this before and I will say it again, again and again. Your appraisal report is a summarization of YOUR conclusions! You and ONLY you should be reviewing raw data and analyzing it.

They (GSE's) are pushing appraisal requirements to the point where they could be considered a "self contained" report, if one was to use the old terminology. When/if you include in the report support for every statement or adjustment, you've left the idea of a Summary Report long in the dust.

When you just throw in charts and graphs of raw data you are inviting the reader to make their own, usually flawed, conclusions. If I put a chart or graph in my report I make sure it helps support what I say.

As a good reviewer for the State DOT told me one time..."don't put a lot of unnecessary data in your reports. When you do that, I have to check all of it for accuracy which takes more time for me and adds nothing except bulk to the report." He was a fan of the Sgt. Joe Friday approach..."Just the facts ma'am, just the facts."

 

[Surf Cat]

Spark, you put in the neighborhood or competing sales. Then you have 1 linear line and 4 different non linear lines to choose, depending on the flucuations. I posted to look at the spark utube video on it. It made me understand how it works. And why you need to have different non linear lines to get the right trend. And it does all the explaining fannie requiers on a page. All i have to do is pick the data and line i want to use. Takes a couple of minutes.

But some of the dopes on this post have neither studied it, or even understand it.
And we're the brightest here?

Spark is epic. Best results if you remove the outliers. I wish Brandon wouldn't have sold it to True Footage though. I tried that free Valuation Labs page and did not feel comfortable with the results.

Hopefully Spark works with the new everything, evolving appraisal form coming out. I'm used to templates for different clients as well. We'll see.....

 

[Zoe]

My MLS does good and they have an internal program that contains all sales whether sold through NAR or not.

It does good. You can narrow the data with what competes with the subject property. We have one of the biggest residential brokers in the nation locally. They are big (Crye-Leike) in residential. They are decent size in Commerical property sales. But they are big broker on single family and members of local NAR association.

 

[Zoe]

This is a report on them from 2 years ago to tell you how big they are:

https://www.crye-leike.com/includes/docs/annual-report-2022.pdf

$8.9 billion in 2022. $6.9 billion in 2023.