Unadjusted values don't bracket the subject's value

[Mike Ault]

I only have one client who grills me on this and as some know my area is pretty easy. 1,400sf th no basement no amenities avg condition but 3 comps inside are all great all same size but adjust down (even a little) and the listing is also higher but when adjusted everything is bracketed so why do they care.. Is it a FNMA guideline or an AMC stip?

That is definitely an AMC stip. Waste as little of your time as possible with it. "Guidelines" are recommendations, not requirements.

 

[J Grant]

I only have one client who grills me on this and as some know my area is pretty easy. 1,400sf th no basement no amenities avg condition but 3 comps inside are all great all same size but adjust down (even a little) and the listing is also higher but when adjusted everything is bracketed so why do they care.. Is it a FNMA guideline or an AMC stip?

They do not care you should care as an appraiser - - it is about credibly supporting a value rather than a guideline or AMC stip -
most clients want to see bracketing since it is a better way to show the value rather than lazily choosing 3 sales and adjusting them all down or up -

Why are the other comps in the subdivision adjusting down? What makes them superior?

No other older sales in the subdivision or in competing communities similar to subject found? Or did not look? i

 

[J Grant]

There will always be bottom and top houses in the market with no comps to bracket them. Why waste time adding irrelevant and possibly misleading sales when a simple explanation is all that is required?

The report now is misleading if all the comps are superior

The OP declined to say what makes them superior. As usual, we get partial information. What else is new...

 

[J Grant]

Have you ever appraised a really bad REO home where the value was basically lot value? I think my lowest appraisal ever was $5,000 lot value for a gutted, boarded up, torn up home.

A few times, and then I found horrible homes sold for lot value and mixed them with land sale comps.

 

[J Grant]

Due to the subject's condition, All sales are adjusted downward. The appraiser searched back x months and increased distance search parameter's to x. These are the best sales available. There are homes with similar condition as the subject, they just have not recently sold.

Did they even search or just grabbed the 3 sales found?

 

[Charles West]

If I had a beater I'd use a REO sale or two even if the subject was otherwise undistressed. At that point its about condition and little else.

 

[Tom4value]

How do you say the subject was a pos and I couldnt find other pos comps so my comps which are great adjust down but are bracketed by the adjusted values so who cares.

This is the “Archie Bunker” of comments, technically right, but man, bad way of saying it!

There is misconception by AMCs, underwriters and even appraisers that the comps you use in the SC approach are the only source of support for adjustments. In this case, you have comments like, “find a comp, any comp, that is also a POS”. If you can find a comp, great. The danger is the “any comp” part.

The sales comparison grid is for comparable sales only. If you are stuck on, “any comp”, you will be providing “any sale” that is not comparable to the subject property, which according to USPAP is misleading.

So what do you do if you don’t have any sales of similar condition that are otherwise comparable? You apply an across the board condition adjustment to the comps you have. YIKES! “Did he just say, ‘across the board’ adjustment?”. Yes.

First, you find sale(s) of properties of similar condition in your market. They don’t have to be similar to your subject but they should be in your subject market. You then find comps to THAT property to extract a condition adjustment. It can be a dollar amount but if it is in a different value range than your subject, a percentage will work also. You then apply that adjustment to your comparables and then bracket for your value. For added support weigh in an actual cost for repairs.

Finally, BY ALL MEANS, explain in detail what you did! You put all that work into extracting the adjustment. You don’t want the reader to think the adjustment was POA!

 

[Carnivore]

The report now is misleading if all the comps are superior

The OP declined to say what makes them superior. As usual, we get partial information. What else is new...

Nope! You just seem to not know the realities of Appraising REO's and sometimes Short sale. Oh, an Rural Properties there are issues with comp selection.

Wait...and there is this assignment quote I just received -I am not going to bother because my fee will be huge Refinance

9,999 Square Feet single family home is a 7 beds, 8.5 baths property. Sitting on a water front lot. And they want a 1007 Rent Schedule

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[Tim Hicks (Texas)]

I only have one client who grills me on this and as some know my area is pretty easy. 1,400sf th no basement no amenities avg condition but 3 comps inside are all great all same size but adjust down (even a little) and the listing is also higher but when adjusted everything is bracketed so why do they care.. Is it a FNMA guideline or an AMC stip?

Here is my argument to this question. We select comparable sales based on location and physical qualities. If you always bracket your value by comparable sales price, you could be appraising to a predetermined value. Choosing sales because of price is not a proper appraisal technique because you should not know your opinion of value until the appraisal process is complete.

 

[J Grant]

The thread as usual is all over the place -
The op never returned to tell us why the subject is inferior to the other 3 sales he found in the community,, why the comps are sales he found are superior and needed a downward adjustment and what search he did, or if he even did one, to find other comps similar to the subject condition or upgrades

Until that happens we are all wasting our time IMO - and making assumptions that may or may not be in play.