Adjustment For Appreciation

[Doug Smith SRA]

Originally posted by Mary Adamson@Apr 20 2004, 12:59 PM
You think that's tough - I just inspected a home today that's under contract for $90,000 over list with 28 offers.

Yikes!!!

Actually the Adjustment is not "Yikes", it is "Yipes"


YIPES is the next new appraisal acronym. YIPES labels the trend where list/sell ratios exceed 100%. I understand this is reaching crisis proportions in some parts of the country.


The trend and second level acronym (yuppie is already an acronym) is "YIPES" or "Yuppies in Pursuit of Expensive Shelter." Yipes is listed on the URAR sale grid as "List/Sell Ratio " and is an adjustment that is calculated after separating the site cost by matched pairs of non yipes sales and yipes sales. Yipes is expressed as a percentage increase by square foot of GLA.

In a fast moving market, this will enable the appraiser to adjust sales upward for yipes instead of applying a time adjustment. A matched pair analysis must be done to determine if a list/sell ratio adjustment is required for site costs.

 

[Pamela Crowley (Florida)]

Of course the contract(s) need to be poured over in detail.

My contention is that no appraisal order should have a 'value' on it, especially refis.

For purchases, I strongly suggest NOT looking at the contract until you've finished your appraisal, then very carefully look at it and put all necessary information into the appraisal report. If the contract is real close to your appraised value that you had already come to a conclusion about, then take that contract price into consideration. If it's way off $ wise, try to determine why and discuss that in your appraisal, but don't change your already arrived at value just to support the contract price without a damn good reason.

All should be looking at the pendings, actives, expireds and withdrawn listings all the time anyway, looking for trends.

 

[Em Tee]

Originally posted by Doug Smith, IFAS@Apr 22 2004, 08:04 AM
The trend and second level acronym (yuppie is already an acronym) is "YIPES" or "Yuppies in Pursuit of Expensive Shelter." Yipes is listed on the URAR sale grid as "List/Sell Ratio " and is an adjustment that is calculated after separating the site cost by matched pairs of non yipes sales and yipes sales. Yipes is expressed as a percentage increase by square foot of GLA.

Thanks Doug! That was just what I needed to get that report done.