Across The Board Time Adjustments?

[residentialguy]

My solution is to do the 1004mc, and *notify* the client why the 1004mc is PROBABLY GOING TO BE MISLEADING.

If the appraiser just does the data on the MC, which ends up being unreliable due to lack of data, then the appraiser must supplement it with additional analysis so that the results are reliable. If he/she doesn't, then the appraiser is being misleading. Your "solution" does not get you off.

 

[DARREN GODFREY]

If the appraiser just does the data on the MC, which ends up being unreliable due to lack of data, then the appraiser must supplement it with additional analysis so that the results are reliable. If he/she doesn't, then the appraiser is being misleading. Your "solution" does not get you off.

Please read all my replies...I covered that.

 

[DARREN GODFREY]

If the appraiser just does the data on the MC, which ends up being unreliable due to lack of data, then the appraiser must supplement it with additional analysis so that the results are reliable. If he/she doesn't, then the appraiser is being misleading. Your "solution" does not get you off.

This has really been a time consuming review...it's like you have to try to figure what and why he did it and then redo it lol.

 

[Riick]

If the appraiser just does the data on the MC, which ends up being unreliable due to lack of data, then the appraiser must supplement it with additional analysis so that the results are reliable. If he/she doesn't, then the appraiser is being misleading. Your "solution" does not get you off.

Res... did you read to the end? I do provide my own stats/analysis, separate & distinct from the mc.

 

[J Grant]

This has really been a time consuming review...it's like you have to try to figure what and why he did it and then redo it lol.

This has really been a time consuming review...it's like you have to try to figure what and why he did it and then redo it lol.

That is what some reviews are like...have to slog through it. Sounds like there is something amiss with the original report. Time adjustments when applied should be pretty straightforward, though there are several ways to do them. Once they are applied, they should be to all the comps (though some appraisers make no adjustment to a very recent closed sale, if the market is stabilizing after a period of appreciation)

Time adjustments are supposed to bring older sales/sales that occurred in a different price cycle current with the most recent sales activity with application of a monthly percentage of appreciation in a rising market (or the reverse in declining market ) If a time adjustment is out of sync with the market, as shown by the best comps themselves, it would send up a red flag. Were the comp choices good ones in the first place...a bad comp choice can throw a report off. Good luck, reviews can be like quicksand in a way, sucking one into a time hole trying to reach the shore of a reasonable conclusion when the OA is a mess.

 

[DARREN GODFREY]

That is what some reviews are like...have to slog through it. Sounds like there is something amiss with the original report. Time adjustments when applied should be pretty straightforward, though there are several ways to do them. Once they are applied, they should be to all the comps (though some appraisers make no adjustment to a very recent closed sale, if the market is stabilizing after a period of appreciation)

Time adjustments are supposed to bring older sales/sales that occurred in a different price cycle current with the most recent sales activity with application of a monthly percentage of appreciation in a rising market (or the reverse in declining market ) If a time adjustment is out of sync with the market, as shown by the best comps themselves, it would send up a red flag. Were the comp choices good ones in the first place...a bad comp choice can throw a report off. Good luck, reviews can be like quicksand in a way, sucking one into a time hole trying to reach the shore of a reasonable conclusion when the OA is a mess.

See, that is the key word , older comps. When you go beyond the most recent comp, you are speculating , plain and simple. There is a logic to across the board adjustments. The biggest problem with the original report , reflects data collection and the application of the data to the conclusion of value.
if you don't adjust the most recent sale you let the market speak. If you do then you are speaking for the market.
As I look over the report, certain things pop out. It is rare to have concessions in a truly increasing market. In a truly increasing market, there is competition, you don't have 212 day marketing periods unless your list price is crazy....too many things didn't add up.

 

[J Grant]

Then perhaps he/she was inappropriately applying time adjustments. Do your own search on the appraisal specific market, did prices appreciate , and if they did, did they stabilize at some point? I agree, long marketing times, unless it is a high end luxury market, and concessions are not typical of a rising price market. what is listing supply like? A rising market usually has inventory shortage. Did you run alternate search to see if the appraiser used best similar sales as the comps?

 

[residentialguy]

Res... did you read to the end? I do provide my own stats/analysis, separate & distinct from the mc.

Then that is part of your 1004MC...it is not separate & distinct. The mc includes any additional comments and analysis on Market Conditions. You state the comp data on the MC form. You then say, due to the lack of data of comps in the neighborhood, you had to expand parameters, talk to local agents, add graphs, etc - you include additional analyses to show a reliable indicator of trend so that you can check the correct overall market trend. Therefore the 1004MC is not misleading because it has all the support you added to it.

 

[Gobears81]

I've found that some AF members can be a little like piranhas in some cases-when they smell blood, either correctly or incorrectly, they will pounce (I mean that respectfully-it is the nature of this type of forum and most tend to still remain professional). I've been on an island before on a couple threads also and still believe that my stance is correct, but the other 10+ posters did not. I remember a residential poster understanding about 40% of what was discussed in a commercial thread but did not hesitate to suggest that he thought I was biased because of my stance. We don't have the locational knowledge that the OP does and perhaps there were small things identified in the OA that set off alarms. As much as appraisers want to characterize the market as cut and dry, sometimes there are multiple paths to take, and maybe something was picked up that suggested that the OA took a slightly different path than what would normally be taken.

Edit-not singling out any poster on this thread as a piranha, just something I've found when something might seem off

 

[residentialguy]

To be clear, (since I was a major piranha in this discussion), my point to OP was about appraising to the effective date and that we are not to appraise "conservative" and use only closed sales to protect the market. This is not a locational or particular market issue. I stated that I have no way of knowing whether or not his assessment of the trend was correct, rather that if the market is increasing, then across the board adjustments are warranted.