Reconciliation Written Comments

[Deleted member 77547]

I don't discuss what I didn't use in the reconciliation. I may address that in the sales comparison comments but only if necessary like, for example, some outlier that might surely be brought up later. Depending on the situation (dated sales, etc.) I may include a list of properties to show how the subject relates to the comps within its neighborhood to give the reader a visual.

 

[Terrel L. Shields]

Scope of work is a good place to say what you did and what you didn't do.

 

[VolcanoLvr]

Nice comments. Thanks.

This report was for a new custom construction home on a hunk of 'donated' dirt (family gift), which the lender wanted valued with the dwelling. Very difficult property with NO local comps anything similar to this place. Portfolio loan, on a GP form, not a GSE form.............at my request.

There were a total of 6 sale comps in the report (& NO listings). Two of those adjusted very close in value at the highest end of the range. I explained in the report why I used those as my evidence for the OMV I stated, but did not dwell on why the other comps were not weighted highly in the analysis.

The lender now wants an explanation about why the other 4 comps were not used to establish the value. Those, of course, had much lower adjusted values from the two I used to conclude the value.

 

[J Grant]

Nice comments. Thanks.

This report was for a new custom construction home on a hunk of 'donated' dirt (family gift), which the lender wanted valued with the dwelling. Very difficult property with NO local comps anything similar to this place. Portfolio loan, on a GP form, not a GSE form.............at my request.

There were a total of 6 sale comps in the report (& NO listings). Two of those adjusted very close in value at the highest end of the range. I explained in the report why I used those as my evidence for the OMV I stated, but did not dwell on why the other comps were not weighted highly in the analysis.

The lender now wants an explanation about why the other 4 comps were not used to establish the value. Those, of course, had much lower adjusted values from the two I used to conclude the value.

Folks responding thought your first post meant a case of explaining why appraiser did not include sales/comps from the grid, not a failure to explain why certain comps on the grid in the reconciliation got no or little weight. A simple sentence addressing it...though in the case of weak comps or ones with huge adjustments, more commentary may be needed.

In the above, you explained why you weighted 2 comps heavily out of 6, yet you "did not dwell" on the 4, , aka failed to explain why 4 comps got no or little weight.

The question is if the other 4 "comps" were bad why they on the grid? Why put FOUR weak comps on...if you have only 2 "good " comps, then just add one weaker comp for 3 total.

It brings up the question...you reference the comps in terms of high/ low values, but which of the 6 comps were the most similar in physical characteristics to the subject? Were the two comps you weighted more also the most similar to subject ?

What difference does it make to the OMV that the "dirt" aka the lot, was donated ? One normally appraises a lot and dwelling together.

 

[Randolph Kinney]

There were a total of 6 sale comps in the report (& NO listings). Two of those adjusted very close in value at the highest end of the range. I explained in the report why I used those as my evidence for the OMV I stated, but did not dwell on why the other comps were not weighted highly in the analysis.

As you know, the comparables that are adjusted least indicate a better comparison or match to the subject than comparables that are adjusted more. A La Mode weighted comps by this method.

 

[J Grant]

As you know, the comparables that are adjusted least indicate a better comparison or match to the subject than comparables that are adjusted more. A La Mode weighted comps by this method.

Typically that is true, though there can be reasons why a similar comp happened to get more adjustments, such as if it is older and needed a time adjustment, or if the lot size was different but the comp shares a key value feature with subject such as an ocean view. Alamode weighting is good to look at but as appraisers it is our judgement and conclusion of reconciliation.

In the OP post above it is unclear why he weighted those 2 comps the most, other than that they adjusted close in value at high end of range...he did not say they needed the least adjustments (though that might be true) nor did he say they are the most similar properties to the subject.

Of course his client is asking for an explanation.

 

[Randolph Kinney]

Pretty funny, you describe differences that you adjust for yet you call a similar comp to the subject one that gets more adjustments than some other comp with less adjustments.

 

[J Grant]

Pretty funny, you describe differences that you adjust for yet you call a similar comp to the subject one that gets more adjustments than some other comp with less adjustments.

There is context involved, such as if the larger adjustment is for a time adjustment yet it is a similar comp in property characteristics.

 

[Randolph Kinney]

There is context involved, such as if the larger adjustment is for a time adjustment yet it is a similar comp in property characteristics.

If you are dealing with dated sales and making larger adjustment for time than the combined adjustments of more recent sales ... maybe the reader would conclude that sale is less relevant than the more recent sales.

 

[J Grant]

If you are dealing with dated sales and making larger adjustment for time than the combined adjustments of more recent sales ... maybe the reader would conclude that sale is less relevant than the more recent sales.

That is why the appraiser would comment why it is relevant, such as the only sale with a direct ocean view like subject has. And if the adjustment is large but brought the price up to current market conditions, then that would be adressed as well in narrative.