Adjustment Software

[alebrewer]

You basically have to rely on your experience and bracketing.

I don't necessarily disagree, but the 'relying on your experience' part is awfully subjective, wouldn't you say? What if you have a LOT of experience, but the next guy only has 1 month of experience? Or what if your experience is that you've been well trained, but the next guy's experience is that he hasn't been well trained? It just seems to me that we're way past the time when clients just took our word for something because we told them so.

 

[Tim Hicks (Texas)]

I don't necessarily disagree, but the 'relying on your experience' part is awfully subjective, wouldn't you say? What if you have a LOT of experience, but the next guy only has 1 month of experience? Or what if your experience is that you've been well trained, but the next guy's experience is that he hasn't been well trained? It just seems to me that we're way past the time when clients just took our word for something because we told them so.

Bracketing and sensitivity analysis is relying on experience. You are correct that there are a lot of poorly trained appraisers out there, but I can only control me and my experience.

Let's not fool ourselves. These adjustment support software programs have a lot of manipulation to the input and the outcome. Sometimes their "calculations" are not supported by the paired sales.

 

[alebrewer]

Bracketing and sensitivity analysis is relying on experience. You are correct that there are a lot of poorly trained appraisers out there, but I can only control me and my experience.

Let's not fool ourselves. These adjustment support software programs have a lot of manipulation to the input and the outcome. Sometimes their "calculations" are not supported by the paired sales.

No doubt. And I think we may be discussing two different things. Bracketing and sensitivity analysis are tools. 'Relying on experience' is not (at least in the context that I'm talking about). There are still WAY too many appraisers who believe their 30 years' experience is sufficient legal tender to force their clients to just accept what they tell them. Dealing with one RN where the subject is on a golf course - appraisal contained three sales - one golf course (that sold almost 2 years previous) and 2 interior lots. Sale down the street from the subject is golf course and - based on photos - looks identical to the subject. Appraiser refuses to use it because 'he knows the area and he knows it sold too high'.

 

[Dublin ohio]

These days, with everyone sitting on their 3% loans and little market activity, adjustment software doesn't work that well in Suburbia either

In the past year there have been a total of 214 sales in my 14 sq mi neighborhood. Low of $400K high of $2.5M. Median of 735K. 21% of the sale were over $1M. With a spread like that a macro analysis is questionable at best. But trying to isolate a market segment is almost impossible due to lack of sales similar to each other

 

[Surf Cat]

It's not all about ANSI, the capabilities are beyond that.

The Roomba vacuum cleaner with Cubi Casa built in will also be equipped with a facial scanner to see if the borrower overpaid....

Joking aside, this is what is coming down to. The homeowner is going to be a lot more involved in the valuation of their own property. Like pumping your own gas or self checkout at the grocery store.

Our home insurance provider wanted me to be their free employee and take photos of the house and send it to them to reassess the insurance amount. I told them to pound sand and send someone out if they want to see it. They stated they had no agents to come out to our property. Apparently, that job is gone. Real estate appraisers will eventually be gone as well.

Received the new insurance bill, it went up of course.

 

[Tim Hicks (Texas)]

No doubt. And I think we may be discussing two different things. Bracketing and sensitivity analysis are tools. 'Relying on experience' is not (at least in the context that I'm talking about). There are still WAY too many appraisers who believe their 30 years' experience is sufficient legal tender to force their clients to just accept what they tell them. Dealing with one RN where the subject is on a golf course - appraisal contained three sales - one golf course (that sold almost 2 years previous) and 2 interior lots. Sale down the street from the subject is golf course and - based on photos - looks identical to the subject. Appraiser refuses to use it because 'he knows the area and he knows it sold too high'.

There seems to be one oddball sale that sold way above market everywhere. Not that I think that is the case in your example, but I see sales all the time that don't correspond to the rest of the sales. So, in this case are the subject and that one sale just the true market or is it just the case of one oddball sale. I would need to see more data.

 

[Surf Cat]

In the past year there have been a total of 214 sales in my 14 sq mi neighborhood. Low of $400K high of $2.5M. Median of 735K. 21% of the sale were over $1M. With a spread like that a macro analysis is questionable at best. But trying to isolate a market segment is almost impossible due to lack of sales similar to each other

Same thing in a 2-mi square neighborhood in my geographic area. The gross sales are a wider spread..... the comparables building styles are all different from the subject's. The market trend looks like an EKG of someone's heartbeat.

The numbers that synapse spits out are sometimes okay..... other times, not so much.

The problem is appraising is getting away from the appraiser's "opinion" based on components of bracketing and or equality and similarity between the gross and adjusted sales with a solid reconciliation of how you came to your conclusion.

Pretty graphs and charts and scatter plots are pretty much now "required" to prove your opinion is spot on....

 

[alebrewer]

There seems to be one oddball sale that sold way above market everywhere. Not that I think that is the case in your example, but I see sales all the time that don't correspond to the rest of the sales. So, in this case are the subject and that one sale just the true market or is it just the case of one oddball sale. I would need to see more data.

There are, quite often, oddball sales. And my point was not to dissect an appraisal - god knows that happens on here quite often. In the example cited, though - and assuming the scenario has been presented accurately - the onus is on the appraiser to demonstrate why that sale sold above market. Not just to provide a flippant response that he won't use it because of his 30 years' experience.

My point was more that there are still a lot of appraisers who grew accustomed to the 'it's that way because I told you so' attitude - which worked for several decades, as the clients had no way to prove - or disprove - the appraiser's assertions. Not the case any longer. EVERYONE has all the data the appraiser does (for the most part).

AND - they've relied on that '30 years' experience' as basis for their adjustments (call it a cheat sheet if you will). Which has served only to cripple those appraisers - because now the users of our services are demanding quantitative analysis - something the '30 years' experience' folks don't know how to do.

 

[RCA]

Reading all the above, yes these words come to mind:

"Pernicious" refers to something harmful or destructive, but with a particular connotation of:

1. Having a gradual or subtle harmful effect
2. Being hard to detect initially
3. Often becoming worse over time or spreading
4. Being especially difficult to combat or eradicate once established

The word comes from the Latin "perniciosus" meaning destructive or fatal, related to "pernicies" meaning destruction.

A few examples help illustrate:

• A pernicious rumor might slowly but steadily damage someone's reputation
• A pernicious disease might progress slowly while being difficult to diagnose early
• A pernicious social practice might cause harm in subtle ways that become entrenched in society

The key distinction between "pernicious" and simply "harmful" is this element of gradual, insidious harm that's difficult to detect and address early on. Would you like me to elaborate on any aspect of this definition?


"Whac-A-Mole"

The decades long game the federal goverment plays with the housing industry.

AND SO: It's all happening again with new "moles:" Like Aloft ........ and the old ones of course, the GSE's, having burrowed even deeper into mother earth to arise again out of new mole holes .....
And now back to reading Nassim Taleb's "The Black Swan" and Jeremy Bagott's "The Ichthyologist's Guide to the Subprime Meltdown."
OR

Amazon.com

 

[Tim Hicks (Texas)]

There are, quite often, oddball sales. And my point was not to dissect an appraisal - god knows that happens on here quite often. In the example cited, though - and assuming the scenario has been presented accurately - the onus is on the appraiser to demonstrate why that sale sold above market. Not just to provide a flippant response that he won't use it because of his 30 years' experience.

My point was more that there are still a lot of appraisers who grew accustomed to the 'it's that way because I told you so' attitude - which worked for several decades, as the clients had no way to prove - or disprove - the appraiser's assertions. Not the case any longer. EVERYONE has all the data the appraiser does (for the most part).

AND - they've relied on that '30 years' experience' as basis for their adjustments (call it a cheat sheet if you will). Which has served only to cripple those appraisers - because now the users of our services are demanding quantitative analysis - something the '30 years' experience' folks don't know how to do.

Oh, you are referring to the "list of adjustments" That so many log in the tooth appraisers continue to use including the $20 per foot GLA adjustment no matter what the property.

Most of the seasoned appraisers on this forum have been calling out those appraisers for years on the forum. Market based adjustments are nothing new to most of the appraisers here. However, we do get the occasional newbie that will log on here and actually display their $20 per GLA adjustments for homes selling for $200-400 per foot. There are quite a few appraisers out there that only appraise the way they were taught 30 years ago with only the adjustments they were taught 30 years ago.

We can only educate them one appraiser at a time as the log onto this site.