Stable Market

[Terrel L. Shields]

I always wondered were these things come from?

Since I am not a checkbox appraiser, I discuss market conditions but also implies something about value v price.

If I buy 2 properties for exactly the price and flip one immediately for what I gave for it (say I paid $100,000 each) and the market does not change in 10 years, but inflation is 2%, then when I sell the other property for exactly $100,000 10 years after the first, which was the most profitable? The sale at zero years - I can put that money on interest for 10 years, say at 4%...The other property has to generate income in order to be more profitable. In any event it lost value, just not price. OTOH, if inflation turns into deflation, and I sell at $100k it's held its value plus.

I've made time adjustments for many years, but I don't make small adjustments based on inadequate sample size. I am loathe to adjust for anything under six months.

 

[Terrel L. Shields]

real appraisers avoid using time adjustments and get most recent sales similar to subject

That only applies in data rich environments. When a county only has a few sales in the past year, time adjustments are often necessary.

Ottawa County, Oklahoma has exactly one sale with a finished basement in the past year. How far out of the county would you go?

 

[Dublin ohio]

When I started appraising, never had to adjust for contract date.
More recently reviewers asking for adjustments on contract date. WTF.
Adjusting for every little detail. Ridiculous.

Buyer made their decision on the contract date basing their decision on market conditions at that time. They don't base their decision on a closing date 30-60 days in the future

 

[Fernando]

I admit when I need to bump up the appraised value, I use time adjustments on older comps. It's easy.

 

[Dublin ohio]

although it seems that most appraisers hate it, i feel that data about competing properties reported in the 1004MC is usually a perfect source.

I seldom have enough truly comparable sales to make the 1004MC credible or relevant.

 

[CGinMN]

Against what benchmark?

The most probable price whereby payment is made in terms of cash in US dollars on the effective date. So the benchmark is USD, not TIPS or US Savings bonds.

 

[Dublin ohio]

I admit when I need to bump up the appraised value, I use time adjustments on older comps. It's easy.

The old peanut butter method

 

[Fernando]

I seldom have enough truly comparable sales to make the 1004MC credible or relevant.

Real appraisers have no problem. They can get a sample data and justify what they want.
1004MC is most manipulative form. Never had a problem with reviewers.

 

[Dublin ohio]

Never had a problem with reviewers

You mean check box monkeys

 

[NC Appraising]

Has your market been increasing and decreasing so much that you have to use time adjustments. Too subjective and most easily to debunk.
You can fool the public and reviewers but real appraisers avoid using time adjustments and get most recent sales similar to subject, thus don't need to do so much adjustments.

I recently did one with 10 offers and 200k over list.

Increasing. I noticed some appraisers in my market will go outside of the neighborhood to use closed sales from within the past 90 days just to make the AMC or lender happy when there are comps from within the subjects neighborhood.

These same appraisers have this odd appraisal theory that if they use closed sales within the past 90 days it means the market is stable.

I try to use closed sales from within the subdivision 1st. Even if they are dated. Then I may expand into other subdivision for more recent closed sales. This helps to support what the market is doing and if I need to make any subdivision adjustments.