Adjustment Support Request

[Surf Cat]

Hopland AKA CA Native used to say the Grid on your form is your spread sheet and in sensitivity your biggest driver is your GLA adjustments and then he went from there.

This is what the OP is going to have to do as he's already turned in the assignment and he has to work with what he has.

I'm surprised he's got away with it for this long....not providing proof of adjustments (if this is what happened). Spark, Synapse, Solomon and especially Excel has been utilized for a long time now in appraising. It's expected.

 

[Zoe]

I have a lender asking me to provide the specific market data utilized to support the applied adjustments while avoiding the use of non-specific commentary. For instance, if paired sales were used, please list the specific paired sales used to derive the adjustment. if a different method was used the thought process needs to be specifically explained. A "show your work" approach fo adjustment support has been more heavily enforced by Fannie Mae and Freddie Mac. As such, most lenders no longer accept boiler plate commentary that could be applied to any appraisal report.
I am looking for suggestions on how to handle this request

With all due respect, which adjustment(s) did you make based on paired sales?

I am trying to lead you to a possible solution for your client.

Okay, I won't go any further for respect. Did you have huge adjustments based on paired sales?

 

[Zoe]

I'll digress for your pleasure. Delete paired sales from your commentary. Use some other method of adjustments. There are many. Delete paired sales permanently from your commentary.

 

[Tom D]

Rule #1 never claim your using paired sales if there not in your grid.

Absolutely. But you need to show some charts, or graphs, to show that you at least tried to not to use the cheat sheet. I have several charts, GLA, regression & sensitivity. The reader sees a simple graph or chart and they think you at least tried to find the adjustment.
In the comment below it also says why there may not be a math way to prove it. My appraisal is actually my work file, cause 3 years from now i won't remember how i did it.
I will say that in my big urban life, mostly GLA and condition adjustment only.

This is a good reference to, in my report:
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 comparables in support of the market value opinion, the subject's 'most probable selling price' commensurate with the definition of Market Value set forth herein.

 

[sputnam]

The powers that be are finally taking steps to force appraisers to do what they should have been doing all along. We all know that there are appraisers, I don't know how many, who don't actually do the work to extract every adjustment.

We have two or three solutions to those sort of requests. Do it. Decline the assignment. Don't work for GSEs.

 

[Zoe]

Sensitivity analysis is safest route to go like on GLA if you have good grounds on all other adjustments. It is telling me the underwriter is questioning your reasoning on adjustments. At risk of being obtuse, How wide is your indicated value range after adjustments?

Not that it matters on your opinion, but how you got there matters. I am trying to get an opinion of why you are having a problem on your adjustments.

 

[Sadie]

I have a lender asking me to provide the specific market data utilized to support the applied adjustments while avoiding the use of non-specific commentary. For instance, if paired sales were used, please list the specific paired sales used to derive the adjustment. if a different method was used the thought process needs to be specifically explained. A "show your work" approach fo adjustment support has been more heavily enforced by Fannie Mae and Freddie Mac. As such, most lenders no longer accept boiler plate commentary that could be applied to any appraisal report.
I am looking for suggestions on how to handle this request

Respond with this.
"USPAP does not require the appraiser to provide internal notes, proprietary calculation sheets, draft analyses, or other workfile materials unless required by law, due process, or a duly authorized professional peer review. Workfile contents beyond what is included in the report itself are not part of what is provided to clients."

That being said, you should have the data to support the adjustments.

 

[alebrewer]

Interesting that the OP hasn't replied considering it's in an urgent thread. We're just guessing what the problem is.

Clickbait...

 

[glenn walker]

This is what the OP is going to have to do as he's already turned in the assignment and he has to work with what he has.

I'm surprised he's got away with it for this long....not providing proof of adjustments (if this is what happened). Spark, Synapse, Solomon and especially Excel has been utilized for a long time now in appraising. It's expected.

How you did it doesn't necessarily prove anything it's just expressing how you did it and the truth is few adjustments can be proven except if the mathematical adjustments were correct. I've never seen a View Adjustment proved or frankly nothing but maybe GLA.

The big question is can or would others be close if replicating your choice of adjustments. The biggest mistake is to use old canned statements about using things like regression if you didn't or paired sales when not one single comp used in report is similar to the subject.

I always tried to never get into a corner that I couldn't get out of or at least sound like my adjustments were reasonable.

 

[Carnivore]

I have retired from the profession since December 2022. I read this thread and the op got some great advice. I was surprised that he did not know the tools out there for him to do his analysis. Some times you have to do paired sales because there is nothing else. Solomon is pretty good. I used Craftsman cost and Builder ,com

Hope you all have agreat Christmas. My baby Sister and her husband came in from upstate NY . Nice seeing them.

Merry Christmas and happy new year