Across The Board Time Adjustments?

[Gobears81]

To be clear, (since I was a major piranha in this discussion), my point to OP was about appraising to the effective date and that we are not to appraise "conservative" to protect the market. This is not a locational or particular market issue. I stated that I have no way of knowing whether or not his assessment of the trend was correct, rather that if the market is increasing, then across the board adjustments are warranted.

Not singling you out or suggesting that you are a piranha Actually, I was starting to post about why I think that the OP's logic was off on Monday night when this thread first went up but it is too difficult to type long posts on my phone and by Tuesday am, there were 9 pages. As a disclaimer, I skipped about 60% of this thread. Just throwing out the possibility that while he may not be explaining himself extremely well, he might be right in picking up that something is off or that it was a pushed value.

 

[Fernando]

I normally try not to use time adjustment. More recent comps are more reliable. It's difficult to do time adjustments especially in recent 3 months. However, it was in past 8 years, I get reviewers "forcing" me to make time adjustments when in the report, I say the market is increasing. I go across board time adjustment. I don't care. I do what the client wants but my value still the same as before.

 

[residentialguy]

I normally try not to use time adjustment. More recent comps are more reliable. It's difficult to do time adjustments especially in recent 3 months. However, it was in past 8 years, I get reviewers "forcing" me to make time adjustments when in the report, I say the market is increasing. I go across board time adjustment. I don't care. I do what the client wants but my value still the same as before.

I suggest you start being the appraiser...you're signing it.

 

[Fernando]

When I sign it, my appraised value is more important than the minor details.

 

[residentialguy]

When I sign it, my appraised value is more important than the minor details.

That'll go well in court, lol

 

[hastalavista]

To be clear, (since I was a major piranha in this discussion), my point to OP was about appraising to the effective date and that we are not to appraise "conservative" and use only closed sales to protect the market. This is not a locational or particular market issue. I stated that I have no way of knowing whether or not his assessment of the trend was correct, rather that if the market is increasing, then across the board adjustments are warranted.

You are in good company in your assertion.
From Appraising Residential Properties, 4th ed, AI (my bold for emphasis):

Market conditions generally change over time. The date of the appraisal is a specific point in time, so sales transacted before this point must be examined and adjusted to reflect any changes that may have occurred in the interim. Otherwise, the sale prices of the comparables will reflect the market conditions as of the date when they were sold, not the current value of similar real estate. Changes in market conditions are usually measured as a percentage relative to previous price levels.

The smaller question in this thread is if the original appraisal under review adequately supported its market condition adjustments? The OP says that isn't the case. He or s/he has the data, so I'll give him or her the benefit of the doubt.

The larger question, however, is much more important:

When you go beyond the most recent comp, you are speculating , plain and simple....if you don't adjust the most recent sale you let the market speak. If you do then you are speaking for the market.

This statement is clearly and patently incorrect. Not only do the fundamental principles of appraisal methodology not support it, they refute it.

It is bad enough if an individual appraiser believes that market condition adjustments apply to all comparables except the most recent one. The damage done in that case is limited to the appraiser's work.
However, if a reviewer believes this, then that damage is multiplied. It not only impacts his or her individual origination work, but now affects others' work.
In this case, the OP asserts that the report didn't adequately support its adjustment; as I said, I will give him/her the benefit of the doubt. But, from everything s/he has posted, it wouldn't matter how much support the report had or if the support was more than adequate, the OP dismisses the analysis out of hand because it isn't the way s/he would do it and that is that.

This isn't some box-checker working off-shore doing reviews. This is a licensed appraiser doing reviews.

 

[BRCJR]

You are in good company in your assertion.
From Appraising Residential Properties, 4th ed, AI (my bold for emphasis):


The smaller question in this thread is if the original appraisal under review adequately supported its market condition adjustments? The OP says that isn't the case. He or s/he has the data, so I'll give him or her the benefit of the doubt.

The larger question, however, is much more important:


This statement is clearly and patently incorrect. Not only do the fundamental principles of appraisal methodology not support it, they refute it.

It is bad enough if an individual appraiser believes that market condition adjustments apply to all comparables except the most recent one. The damage done in that case is limited to the appraiser's work.
However, if a reviewer believes this, then that damage is multiplied. It not only impacts his or her individual origination work, but now affects others' work.
In this case, the OP asserts that the report didn't adequately support its adjustment; as I said, I will give him/her the benefit of the doubt. But, from everything s/he has posted, it wouldn't matter how much support the report had or if the support was more than adequate, the OP dismisses the analysis out of hand because it isn't the way s/he would do it and that is that.

This isn't some box-checker working off-shore doing reviews. This is a licensed appraiser doing reviews.

Please see post 93......

 

[Riick]

Y

Then that is part of your 1004MC...it is not separate & distinct. The mc includes any additional comments and analysis on Market Conditions...

I say Toe-Mot-Toe and you say Toe-May-Toe. If you want to consider a separate & distinct analysis as part of the 1004mc, that's your prerogative. I don't see it that way. In addition, looking at a differing analysis as a part of the 1004mc, helps continue the farce that the 1004mc has any value. You can't spin gold out of straw, or spin valid statistics from the poorly thought out sample parameters the mc wants.

(As in: Project what is happening in subject's marketplace using only sales comparable to the subject, thus if subject is a 2,800 ft rancher in a sea of 1,900 ft colonials --or-- the market is so poor (or homeowners so happy with their homes), that there have been only 9 sales in last 12 months, .....need I go on?)

 

[J Grant]

D-It is bad enough if an individual appraiser believes that market condition adjustments apply to all comparables except the most recent one

That is imo not a blanket statement that is always true. What if the market appreciated from 12 months ago up till 3 months ago, but at the 3 month ago market stabilized? A sale that was negotiated after stable and closed last month may indeed not warrant a time adjustment when current market is stable ( as seen by listing and pending activity)

The question on page one of URAR is market INCREASING. (on going) The question is Not has the market INCREASED

I there was market appreciation from X month back to Y month , but from Y month forward to today's eff date the market is stable, reinforced from listings/pending activity, then the market is no longer Increasing. The market is stable, however older sales before it stabilized can warrant a time adjustment.

 

[hastalavista]

D-It is bad enough if an individual appraiser believes that market condition adjustments apply to all comparables except the most recent one

That is imo not a blanket statement that is always true. What if the market appreciated from 12 months ago up till 3 months ago, but at the 3 month ago market stabilized? A sale that was negotiated after stable and closed last month may indeed not warrant a time adjustment when current market is stable ( as seen by listing and pending activity)

The question on page one of URAR is market INCREASING. (ongling) The question is Not has market INCREASED So if there was market appreciation but past recent months are flat, the market is no longer Increasing. The market is stable, however older sales negotiated/sold before it stabilized can warrant a time adjustment.

You miss the point of having data that demonstrates there is a market condition change.