Adjustment Support Request

[J Grant]

Wret the above post #60- I see you copied pasted the answer by asking AI.

A true match pair or pairs sale is identical or similar EXCEPT FOR ONE FEATURE.

Since nearly all of us find such sales hard to find, we CREATE paired sales by adjusting the comparables, for all features, that ISOLATE ONE DIFFERENCE to extract the difference $ contributory value for that feature. Also called sensitivity analysis.

A number of adjustment techniques can be used or combined to derive credible adjustments. But picking the right comps is crucial - unsupported adjustments applied to the wrong comps create a misleading result.

https://www.mckissock.com/blog/appraisal/appraisal-adjustments-types-methods-and-cheat-sheet/

 

[TerryRohrer]

Wret the above post #60- I see you copied pasted the answer by asking AI.

A true match pair or pairs sale is identical or similar EXCEPT FOR ONE FEATURE.

Since nearly all of us find such sales hard to find, we CREATE paired sales by adjusting the comparables, for all features, that ISOLATE ONE DIFFERENCE to extract the difference $ contributory value for that feature. Also called sensitivity analysis.

A number of adjustment techniques can be used or combined to derive credible adjustments. But picking the right comps is crucial - unsupported adjustments applied to the wrong comps create a misleading result.

https://www.mckissock.com/blog/appraisal/appraisal-adjustments-types-methods-and-cheat-sheet/

Well, provide a credible source that splits the hair you are trying to split. Making up your own definitions on the fly and hoping everyone else adopts the same definitions so you have a valid point simply doesn't work. You have a body of self-created evidence to prove that!

"we CREATE paired sales"...there cannot be any bias in that methodolog!

Rendering the following no more than claptrap:

Do people not understand the difference between paired sales and matched-pairs sales?

 

[J Grant]

My subject is 3000 sf, built in 1970, recently remodeled, and has a pool and lake view in X non-gated subdivision, no HOA dues . What are the chances of finding an exact match, or simialr feature home in same or simialr subdivion? I might get lucky and find ONE 2500 sf home built in 1975 remodeled with a pool and lake view. The rest are bigger or smaller, and some have a pool, and some have no pool, and some have a lake view, and some don't, and some are in original condition, etc.

I use the best sales I can find and make adjustments to all features and isolate for a lake view, and then for sf size etc - creating paired sales among the most similar properties for the adjustments

The problem with using large data sets from computer programs that do not vet the sales is this: in my market area, the subject and best similar sales are in a non-gated, no amenity subdivision. But within a half mile are a number of similar-sized pool or lake view home sales in a gated subdivision with a golf course and mandatory buy-in country club fee of 300k and yearly dues of 30k. and HOA fees of 16k annually. Property sales from these superior amenity communities with high fees are NOT comps for the subject, yet a non-vetted software search will bring up these sales as comps to get adjustments from.

 

[J Grant]

Well, provide a credible source that splits the hair you are trying to split. Making up your own definitions on the fly and hoping everyone else adopts the same definitions so you have a valid point simply doesn't work. You have a body of self-created evidence to prove that!

"we CREATE paired sales"...there cannot be any bias in that methodolog!

Yes, there is - it is called sensitivity analysis. We apply adjustments to the features of a sale, different from the subject, and leave one feature isolated. We extract the adjustment for that isolated feature, then repeat the process on the next feature. If you don't like using the terminology of paired sales I used to describe it, that is a fair point.

Being able to "show the work" on the actual comps used is understandable to any reader, user, or client. A regression and large data set is not understandable to the appraiser themselves in most cases, and not understandable to most users and clients, which is why those methods can create misleading results in the wrong hands, whether intentional or not. Larger data sets need to be used in conjunctin with the most simialr sales which is how actual buyers select and compare properties.

 

[TerryRohrer]

creating paired sales among the most similar properties for the adjustments

That sounds like you are making it up!

The problem with using large data sets from computer programs that do not vet the sales is this: in a market area, the subject and best similar sales are in a non-gated, no amenity subdivision. But within a half mile are a number of similar-sized pool or lake view sales in a gated subdivision with a golf course and mandatory buy-in country club fee of 300k and yearly dues of 30k. and HOA fees of 16k annual. Property sales from are NOT comps for the subject, yet a non-vetted software search will bring up these sales as comps to get adjustments from.

Who uses large data sets from computer programs that do not vet sales? Why would a tool be at fault if someone misuses it? In your example, if someone uses precisely the same process you use, and had you review and approve the process as J Grant approved, but used only sales in a gated subdivision with a golf course and lake views and a mandatory buy-in country club fee of of 300k and yearly dues of 30k to extract the contributory value of a pool, then applied that adjustment to your 3000 sf, built in 1970, recently remodeled, and has a pool and lake view in X non-gated subdivision, no HOA dues, does that invalidate the paired sales comparison methodology?

 

[J Grant]

That sounds like you are making it up!

Who uses large data sets from computer programs that do not vet sales? Why would a tool be at fault if someone misuses it? In your example, if someone uses precisely the same process you use, and had you review and approve the process as J Grant approved, but used only sales in a gated subdivision with a golf course and lake views and a mandatory buy-in country club fee of of 300k and yearly dues of 30k to extract the contributory value of a pool, then applied that adjustment to your 3000 sf, built in 1970, recently remodeled, and has a pool and lake view in X non-gated subdivision, no HOA dues, does that invalidate the paired sales comparison methodology?

Many appraisers use computer programs to select comps, and large regression programs pull sales from within a mile or other set radius, regardless of how different or not appropriate the communities or condo buildings may be that are within that radius.

I did not say the tool was at fault. I said the system is at fault for encouraging inappropriate use.

 

[J Grant]

AI Overview



Sensitivity analysis in appraisal involves
testing how changing a specific adjustment variable (e.g., GLA, garage, view) in a paired sales analysis impacts the adjusted sale prices of comparable properties. It is used to determine if a chosen adjustment is reliable, defendable, and minimizes the spread in value among comparable sales.
Key Aspects of Sensitivity Ana

 

[TerryRohrer]

Being able to "show the work" on the actual comps used is understandable to any reader, user, or client. A regression and large data set is not understandable to the appraiser themselves in most cases, and not understandable to most users and clients, which is why those methods can create misleading results in the wrong hands, whether intentional or not. Larger data sets need to be used in conjunctin with the most simialr sales which is how actual buyers select and compare properties.

Spoken by someone without a clue of the subject being opined over. I could "show my work" at any time. No one asks. I understand regression, and I understand the data sets I apply it to, and in every case, could explain it to users and clients and appraisers...No on asks. Those methods do not create misleading results as I understand what I am doing and can explain it to anyone. Can you name one single element in appraisals or real estate or the universe than cannot be criticized by "in the wrong hands"? You keeping choosing to malign tools that you don't have the first clue about, and then support your argument by assuming that it is a given that the tools you don't have a clue about can only be used in the wrong hands so cannot be valid. You can't me more wrong, and you don't have the first clue about the tools you are maligning. Do you use a laser to measure? Can you explain, in excruciating detail, how it works and why it works and what can happen if it is used "in the wrong hands"? If not, how can any of your measurements be supportable?

 

[TerryRohrer]

I did not say the tool was at fault. I said the system is at fault for encouraging inappropriate use.

I don't understand this? How is the system encouraging inappropriate use?

 

[TerryRohrer]

AI Overview



Sensitivity analysis in appraisal involves
testing how changing a specific adjustment variable (e.g., GLA, garage, view) in a paired sales analysis impacts the adjusted sale prices of comparable properties. It is used to determine if a chosen adjustment is reliable, defendable, and minimizes the spread in value among comparable sales.
Key Aspects of Sensitivity Ana

What “sensitivity analysis”​

In appraisal practice, sensitivity analysis is not a standalone valuation method. It’s a diagnostic or reasonableness-check tool that answers questions like:

• If this adjustment were a little bigger or smaller, does my value conclusion materially change?
• Which adjustments matter most to the final indication?
• Is my reconciliation fragile or stable?

Used properly, it tests conclusions that were first derived from:

• paired sales analysis,
• regression or other statistical modeling,
• market extraction,
• cost/income support (when applicable),
• or qualitative market behavior evidence.

It does not replace those things.

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The core problem with using only the sales grid
If the appraiser’s “sensitivity analysis” uses only the adjusted sales in the grid, several fatal issues arise:
1. Circular reasoning
The adjustments are derived from the same sales being tested.
That means:

• The model is validating itself
• There is no independent evidence
• No external market signal is introduced

This is equivalent to saying:

“These adjustments make sense because they make sense.”

That’s not analysis—it’s recursion.

2. The grid is not a dataset; it’s a

A URAR grid typically contains:

• 3–6 sales (occasionally more)
• pre-selected and already-filtered comparables
• often intentionally constrained to “most similar”

This is not a representative market sample.
It’s a curated subset designed for illustration and reconciliation.

Sensitivity analysis assumes:

• a sufficiently large and variable dataset
• observable response of price to changing inputs

A 4–6 sale grid simply does not meet that condition.

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3. Adjustments require

USPAP and long-standing appraisal theory are clear (even if not always followed in practice):

Adjustments must be supported by market evidence.

Sensitivity analysis can tell you:

• which adjustment matters more than another
  It cannot tell you:
• what the adjustment should be
• whether it reflects buyer behavior

If no paired sales, regression, or other extraction exists outside the grid, the adjustments are unsupported—no matter how elegant the sensitivity narrative sounds.

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Why this fails the URAR definition of market value

The URAR definition centers on “the most probable price” under specific conditions.

Key word: probable, not “mathematically convenient” or “internally consistent.”

To estimate probability, you need:

• exposure to the broader competitive market
• evidence of how buyers actually pay for differences
• confirmation that results are not driven by one or two influential sales

A grid-only sensitivity analysis:

• cannot demonstrate probability
• cannot show robustness
• cannot show market breadth
• cannot distinguish signal from noise

At best, it shows internal consistency.
Market value requires external market validation.