Three days in a row. Different GLA than advertised.

[Terrel L. Shields]

There is no way to claim that 271k is just as valid as 184k

184? I assume you mean 284k. But if there is no differentiation in the dwelling how do we differentiate in price between $271k and $284k in identical new homes? What is the difference when there is none obvious. Real estate is an inefficient market unlike the price of gold or stocks which is uniform in the same time frame.

It is only our judgment as to which house is the most similar to the subject and which comp or comps we rely upon to make that differentiation. These houses are cookie cutters built by the same crews to Horton specs and contracted on a land site they developed. You cannot argue that each is so readily defined that they are all going to vary only by features and size. There is a simple issue of those market inefficiencies where two identical homes will sell for something slightly different. We cannot argue that selling 3 weeks apart is a time issue. We cannot argue that financing impacted the price can we?

It's like a used car. The better negotiator will get the cheapest price but the car is still what it is. And the Kelly Blue Book price for a given auto is a blend of all the similar models that sold and are reported to them across the nation. And they do that based upon math, multilinear regressions of age, features, condition and mileage of those cars. Dollars are numbers.

 

[J Grant]

184? I assume you mean 284k. But if there is no differentiation in the dwelling how do we differentiate in price between $271k and $284k in identical new homes? What is the difference when there is none obvious. Real estate is an inefficient market unlike the price of gold or stocks which is uniform in the same time frame.

It is only our judgment as to which house is the most similar to the subject and which comp or comps we rely upon to make that differentiation. These houses are cookie cutters built by the same crews to Horton specs and contracted on a land site they developed. You cannot argue that each is so readily defined that they are all going to vary only by features and size. There is a simple issue of those market inefficiencies where two identical homes will sell for something slightly different. We cannot argue that selling 3 weeks apart is a time issue. We cannot argue that financing impacted the price can we?

It's like a used car. The better negotiator will get the cheapest price but the car is still what it is. And the Kelly Blue Book price for a given auto is a blend of all the similar models that sold and are reported to them across the nation. And they do that based upon math, multilinear regressions of age, features, condition and mileage of those cars. Dollars are numbers.

Yes, 284k ( I corrected it )
No kidding, dollars are numbers! But opinions of value is a numerical price expression of a concept of value. Otherwise, we would not need an appraisal to arrive at it and there would not be a value definition and caveats around it.

New homes are only one category of course, and builders price their own homes so they are not always priced on the open market. But for an identical model, assuming the same upgrades, same lot, sold at within a few days of each other, the price difference could be concessions, if a phase is selling out, a better negotiation, which lender was used etc.

But more often, by the time a particular lot is chosen, upgrades or change orders are made, and what started out as identical models can turn out differently and thus command different prices. Whether those prices hold up later is another matter -
I always use at least 2 resales, either in or out of the development and sometimes more, along with several new home sales from a builder.

 

[Fernando]

Getting to an exact point value is what the public understands and that's why we do it. It's easier to understand than a narrow range value because sales prices are not perfect.
Some sell higher, some sell lower than market value because of different motivations of buyers and sellers.
The good appraisers are the ones able to choose "best" point value in which most buyers and sellers are willing to pay on effective date.

 

[alebrewer]

There is no way to claim that 271k is just as valid as 284k for a property just because they both happen to fall within the range.

Why not? If you've exhausted adjustment for all the elements of comparison and you're left with a range of $270k to $285k, then neither is more, or less, supportable than the other. Pick one. What you're doing, though, is arguing at the extremes. Understandable, as you're grasping at straws, but it also serves a point. At the extremes of any range, you always introduce more subjectivity into the selection. Think of it as a normal distribution (if you know what that means). Within the first SD from the mean, you will have 68% of the observations. Within 2 SD of the mean, you will capture 95% of the observations. And within 3 SD of the range, you'll find 99.7% of the observations. It makes sense, then, that as you tend toward the extremes, you introduce more subjectivity into your selection. Or to put it another way: you raise the potential that your observation will not fall within the desired bucket.

That said, if your range truly is representative of the range of value for a given property as of a given point in time, then yes - $271k is just as valid as $284k.

he example is off base because they are not numbers as numerical digits. They are VALUES representing a property, with reasoning behind the choice.

Values are numbers... (to use a J colloquialism: duh).

Values are not JUST numbers.

What are they, if not numbers? Opinions? Estimates? And if either (or both), one would expect that they are expressed with a high level of certainty. Question: when someone has an expectation that an opinion of value is developed with a high level of certainty, what does that mean to you? A high level of experience?

 

[alebrewer]

Getting to an exact point value is what the public understands and that's why we do it. It's easier to understand than a narrow range value because sales prices are not perfect.
Some sell higher, some sell lower than market value because of different motivations of buyers and sellers.
The good appraisers are the ones able to choose "best" point value in which most buyers and sellers are willing to pay on effective date.

Thank you, Fern. You're helping more than you know.

 

[Fernando]

When I wear my real estate hat, for multiple offers, each buyer has their price that their willing to pay for whatever reasons.
Investors like me buy at low price and sometimes I get lucky when seller likes my "clean" offer.
Some sellers willing to accept higher price at risk of contingencies like selling buyer's existing house or from FHA loan with little equity.
Appraiser supposed to see the data in the market (and outliers) and knowing more about subject and buyers and sellers, able to determine whether contract price is within the market value range.

 

[J Grant]

Why not? If you've exhausted adjustment for all the elements of comparison and you're left with a range of $270k to $285k, then neither is more, or less, supportable than the other. Pick one. What you're doing, though, is arguing at the extremes. Understandable, as you're grasping at straws, but it also serves a point. At the extremes of any range, you always introduce more subjectivity into the selection. Think of it as a normal distribution (if you know what that means). Within the first SD from the mean, you will have 68% of the observations. Within 2 SD of the mean, you will capture 95% of the observations. And within 3 SD of the range, you'll find 99.7% of the observations. It makes sense, then, that as you tend toward the extremes, you introduce more subjectivity into your selection. Or to put it another way: you raise the potential that your observation will not fall within the desired bucket.

That said, if your range truly is representative of the range of value for a given property as of a given point in time, then yes - $271k is just as valid as $284k.

Values are numbers... (to use a J colloquialism: duh).

What are they, if not numbers? Opinions? Estimates? And if either (or both), one would expect that they are expressed with a high level of certainty. Question: when someone has an expectation that an opinion of value is developed with a high level of certainty, what does that mean to you? A high level of experience?

If you've exhausted adjustment for all the elements of comparison and you're left with a range of $270k to $285k, then neither is more, or less, supportable than the other is false. A statment of an incompetent appraiser, imo.

A machine can learn that one of the numbers is better supported than another AI or an AVM using algorithms, can figure it out and would give either 270k or 285k a one of the choicds has a highe or lower confidence score.

Plus, the claim is false that neither is more or less supportable is false for appraisers and for buyers. MV assumes a well-informed or well-advised buyer, not an idiot who does not have a reason for why they paid 270k or 285k. People pay prices for a reason and there is a 15k difference between the prices. A normal person would notice 15k missing or added to their bank account.

If, for example, your subject is among the most upgraded of your comps, then it should be worth 285k rather than 270k. That speaks to competence. Unless one works for family lol?
All you write about is distribution and means etc. Do statistics then and not appraisals. It sounds like you have no idea why people pay certain prices or why one property sells for more or less than another one.

If you want to say values are numbers ( they are numerical prices of properties, not just numbers in an appraisal), however, if you want to say values are numbers, then here is a reason why either number is more credibly supported than the other - property characteristics or market conditions favor one number more than the other choice, for example.

Numbers by themselves do not mean much. They are neutral without context. But put in context, they mean many things. Take the number 150. By itself, it is neutral. But apply 150 to certain things. 150$ is cheap for a bar of gold but expensive for a slice of toast. 150 pounds is light for a six-foot-tall man but heavy/obese for a four-foot-tall child. 150lb might be a good weight for a five foot eight tall adult female. Apply that kind of logic to thousands of examples.

Is 1000 more than 1? Yes. as a number, or in nath. A kid knows that. But a question for a professional might be, is 1000 better than 1? That would depend. A thousand dollars is better than one dollar for income purposes. But if we are talking about a rat infestation, one rat in a house is better than 1000. If we are talking about a medical disease diagnosis, showing 1 cancer cell is preferable to 1000 in a slide. Etc. That is called context for the numbers. Context is really important for property valuation. The reason we train for a license.

You really have to ask if the "number" we give is an opinion of an estimate? Let Grok answer that. Normally, appraisers do not say we have a high degree of certainty. Appraisers reference competence and credible support for their opinions and analysis.

 

[RCA]

The subject of this morning's assignment is the purchase of a "Next-Gen" home that includes a distinct studio-type guest unit that is integral to the GLA, with a secured interior access and independent exterior egress; and coincidentally [like the strong R value so often experienced between the AF and reality] I'm searching for published info the addresses the potential future value of the Next-Gen configuration attributed to the aging population--and/or the impact of increasing prices on the need for young adults to move back into the family home. Hoping to avoid builder fluff but hard data probably is readily available.

Regarding your prognosis above, a time in the future when values typically increase because of renovation probably could be deduced from the current age and condition of a property. That factor and the overall, anticipated market growth seem to be the obvious significant factors in determining future value????????

I have no idea how difficult it is to sell a "Next-Gen" home. I take it, that it is not quite the same as a home with an ADU, but I assume more integrated. I mean do consider that in most areas you can probably ADD an ADU, if needed. So, the question is what additional value "Next-Gen" has. I bet a Next-Gen is more difficult to modify than a typical ADU. I don't think you are going to find enough data to help, except in a subdivision with a lot of these.

 

[alebrewer]

If you've exhausted adjustment for all the elements of comparison and you're left with a range of $270k to $285k, then neither is more, or less, supportable than the other is false. A statment of an incompetent appraiser, imo.

A machine can learn that one of the numbers is better supported than another AI or an AVM using algorithms, can figure it out and would give either 270k or 285k a one of the choicds has a highe or lower confidence score.

Plus, the claim is false that neither is more or less supportable is false for appraisers and for buyers. MV assumes a well-informed or well-advised buyer, not an idiot who does not have a reason for why they paid 270k or 285k. People pay prices for a reason and there is a 15k difference between the prices. A normal person would notice 15k missing or added to their bank account.

If, for example, your subject is among the most upgraded of your comps, then it should be worth 285k rather than 270k. That speaks to competence. Unless one works for family lol?
All you write about is distribution and means etc. Do statistics then and not appraisals. It sounds like you have no idea why people pay certain prices or why one property sells for more or less than another one.

If you want to say values are numbers ( they are numerical prices of properties, not just numbers in an appraisal), however, if you want to say values are numbers, then here is a reason why either number is more credibly supported than the other - property characteristics or market conditions favor one number more than the other choice, for example.

Numbers by themselves do not mean much. They are neutral without context. But put in context, they mean many things. Take the number 150. By itself, it is neutral. But apply 150 to certain things. 150$ is cheap for a bar of gold but expensive for a slice of toast. 150 pounds is light for a six-foot-tall man but heavy/obese for a four-foot-tall child. 150lb might be a good weight for a five foot eight tall adult female. Apply that kind of logic to thousands of examples.

Is 1000 more than 1? Yes. as a number, or in nath. A kid knows that. But a question for a professional might be, is 1000 better than 1? That would depend. A thousand dollars is better than one dollar for income purposes. But if we are talking about a rat infestation, one rat in a house is better than 1000. If we are talking about a medical disease diagnosis, showing 1 cancer cell is preferable to 1000 in a slide. Etc. That is called context for the numbers. Context is really important for property valuation. The reason we train for a license.

You really have to ask if the "number" we give is an opinion of an estimate? Let Grok answer that. Normally, appraisers do not say we have a high degree of certainty. Appraisers reference competence and credible support for their opinions and analysis.

Still can't find that darn face plant emoji.

 

[J Grant]

Still can't find that darn face plant emoji.

You can not defend your position so make light of it with a face plant emoji! That's okay... a graceful way out!