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Old 10-22-2009, 01:05 PM
tim1962 tim1962 is offline
 
Join Date: Jan 2009
State: Florida
Professional Status: Certified Residential Appraiser
Posts: 14
Default USPAP compliant data source for remodel adjustments

I work in Florida, where our appraisal board has really came down hard on workfile data requirements. Basicly every adjustment in the sales grid has to be backed up by matched pairs, or some other form of data agreeable with USPAP. Every adjustment must have proven documentation in file or you're considered in violation, or that's my understanding anyway.

Most of the time I appraise an older property, it and the comps. have had some degree of remodeling. I feel the degree of remodeling requires an adjustment, but it's difficult since you can't be sure the of the degree of remodeling the comps. have had simpley by MLS sheets or a drive-by of the comps. in question. Any ideas on an USPAP compliant method of adjusting for remodeling?
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Old 10-22-2009, 09:46 PM
Terrel L. Shields's Avatar
Terrel L. Shields Terrel L. Shields is offline
 
Join Date: May 2002
Location: Springtown, AmeRica
State: Arkansas
Professional Status: Certified General Appraiser
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I feel the degree of remodeling requires an adjustment, but it's difficult since you can't be sure the of the degree of remodeling the comps. have had simpley by MLS sheets or a drive-by of the comps. in question. Any ideas on an USPAP compliant method of adjusting for remodeling?
I am not sure how you can or why you would adjust for remodeling. I would tend to find remodeled comparables. In the Cost App, you would have to address remodeling and all its built in functional obsolescences if you use Reproduction cost new. I would use replacement costs instead and avoid that issue.

Reread The Appraisal of Real Estate. There are a lot of ways to make adjustments and if the board is attempting to 'whack' appraisers that don't rely entirely upon paired sales, then they need removed for the boards, gently, of course, as you would treat any person that is obviously mentally handicapped. I suspect however, that they are simply wanting to make sure you at least use some technique.

If you insist that "remodeling" is an appropriate adjustment, then determining the degree of remodeling would almost certainly require a very detailed inventory of the things done and additions made. AND, the only method I would be comfortable with would be to gather a lot of data in an area from remodel / non-remodel houses of the same quality and vintage and do regression analysis on it. A regression would likely identify such an adjustment should one exist.... again, I think I would try to adjust everything else and let that one "fall out" of the data.
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Old 10-22-2009, 10:25 PM
Michigan CG's Avatar
Michigan CG Michigan CG is offline
 
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Most of the time I appraise an older property, it and the comps. have had some degree of remodeling. I feel the degree of remodeling requires an adjustment, but it's difficult since you can't be sure the of the degree of remodeling the comps. have had simpley by MLS sheets or a drive-by of the comps. in question. Any ideas on an USPAP compliant method of adjusting for remodeling?
Appraisers do research. Call the Realtors, interview them thoroughly. Ask their opinion of the remodeling and quote them in your report.
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Old 10-22-2009, 10:37 PM
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Lloyd Bonafide Lloyd Bonafide is offline
 
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Location: Poway / San Diego
State: California
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Originally Posted by tim1962 View Post
I work in Florida, where our appraisal board has really came down hard on workfile data requirements. Basicly every adjustment in the sales grid has to be backed up by matched pairs, or some other form of data agreeable with USPAP. Every adjustment must have proven documentation in file or you're considered in violation, or that's my understanding anyway.
That's just stupid.
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