Adjustment Software

[Fernando]

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.

That's to your advantage.
I wished I could take the photos and send to insurance company. I can take the "good" photos of my rental.
Instead, I'm awaiting for the inspector to call me for an appointment inspection next month. Ugh.
Never happened before having an inspector (or at least go in themselves without bothering me).

 

[alebrewer]

Market based adjustments are nothing new to most of the appraisers here.

the above statement doesn't really fit with the below statement...

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.

My experience is a bit different than yours. Well - not the part about folks on the forum, but then again - it's easy enough to hide behind anonymity and just 'say' you're doing what you say you're doing. I review sevaral reports a day - and I'm telling you - most of them (and by that I mean well over 50%) are reflective of the cheat sheet adjustments. I reviewed one today - $600k price point - that the appraiser adjusted concessions for $500. Another one today - $500k price point - GLA Adjustments were $20/foot. I could go on. It's really entertaining.

 

[Fernando]

the above statement doesn't really fit with the below statement...




My experience is a bit different than yours. Well - not the part about folks on the forum, but then again - it's easy enough to hide behind anonymity and just 'say' you're doing what you say you're doing. I review sevaral reports a day - and I'm telling you - most of them (and by that I mean well over 50%) are reflective of the cheat sheet adjustments. I reviewed one today - $600k price point - that the appraiser adjusted concessions for $500. Another one today - $500k price point - GLA Adjustments were $20/foot. I could go on. It's really entertaining.

As long as there is consistency, final valuation should be in close range.

 

[Tim Hicks (Texas)]

the above statement doesn't really fit with the below statement...




My experience is a bit different than yours. Well - not the part about folks on the forum, but then again - it's easy enough to hide behind anonymity and just 'say' you're doing what you say you're doing. I review sevaral reports a day - and I'm telling you - most of them (and by that I mean well over 50%) are reflective of the cheat sheet adjustments. I reviewed one today - $600k price point - that the appraiser adjusted concessions for $500. Another one today - $500k price point - GLA Adjustments were $20/foot. I could go on. It's really entertaining.

Yes, I had a few years (1998-2002) where I was doing quite a bit of Fannie Mae and Freddie Mac field reviews. It was eye opening to say the least. It came to the point where I was doing more than twice the work of the original appraiser unraveling their mess, then doing the proper valuation and supporting why my opinion was correct and why theirs was so terribly wrong. It just was not worth the fees ($500 back then) and it was very time consuming. I was of the opinion that appraisers just assumed they would not get caught. They were using assemblage sales that could not be verified that were well above the MLS sales, listings as sales, etc. On several, I got to inspect the property as they were vacant foreclosure properties and it was not pretty either. GLA incorrect, basements counted as GLA, enclosed patio not suitable for year round use counted as GLA, etc.

 

[alebrewer]

As long as there is consistency, final valuation should be in close range.

you're proving my point, Fern.

 

[Fernando]

Stats can be used and/or interpreted differently by appraisers.
For example, for days on market, do you look at average or median. It doesn't make much difference if 10 days apart, but appraisers determine the call.

 

[Dublin ohio]

Stats can be used and/or interpreted differently by appraisers.
For example, for days on market, do you look at average or median. It doesn't make much difference if 10 days apart, but appraisers determine the call.

Average can easily be skewed by outliers. Median not so much

 

[Fernando]

Average can easily be skewed by outliers. Median not so much

Be nice if Fannie be consistent and let appraisers know.

 

[Surf Cat]

That's to your advantage.
I wished I could take the photos and send to insurance company. I can take the "good" photos of my rental.
Instead, I'm awaiting for the inspector to call me for an appointment inspection next month. Ugh.
Never happened before having an inspector (or at least go in themselves without bothering me).

It's not to my advantage. Whether I took the photos and provided them or not, they were going to raise our rates PERIOD.

You on the other hand, based on how you describe your buildings, most likely have something to hide LOL

Now, if I was going to get a cash out refi, with a better rate, it would behoove me to take the photos and provide them in an expedited manner. Because it benefits me to do so.

 

[Lee Lansford ASA]

Just make a general comment on any adjustment approach and maybe 1 or 2 charts if you can make them. It's either matched pairs, sensitivity, depreciated cost, cost or regression. The hardest is GLA. Most small items are just cost depreciated, or market reaction to them. ex: bath adjustment based on cost new $15,000 minus any depreciation, and or location factors. There is a GLA excell chart on this blog that you can play with, looks good for the GLA. They want to know that you did more than look at the 1980 adjustments list.

Here is a overall general comment to have, beside some specifics ones.
The Appraising Residential Properties, 4th Edition, Appraisal Institute, "Other Quantitative Adjustment Techniques”, Page 344 further states: “…In instances where paired sales analysis is not conclusive, the appraiser may apply judgment to resolve the problem." The adjustments resulting from the appraiser's judgment is based on a study and understanding of historic or past buyer preferences. It further suggests that cost and depreciated cost data may be used with the appraiser arriving at the value contribution (not cost new) of certain features. The process of supporting the contribution of individual variables (features) is limited and often difficult to quantify, with adjustment deemed to be qualitatively supported unless otherwise addressed. All methods of supporting adjustments are usually limited by inherent uncertainties within the applications themselves.

Adjustments, in this report, are based on a combination of Paired Analysis with Sensitivity and/or Trend Analysis & on a study and understanding of historic or past buyer preferences. Support for adjustments may be based on multiple applications and rarely do two methods return identical results with a high degree of accuracy. While not always 'strongly' independently supported, collectively, the adjustments serve to narrow the adjusted value range of the comparables in support of the subject's 'most probable selling price' commensurate with the definition of Market Value set forth herein.

More or less--including the quote from that text--my approach to it.