Adjustments made but the same quality ratings for all comps

[Fernando]

Quality adjustments are difficult to determine especially with such large differences as noted.
I try to stay with homes with similar quality. I can make adjustments on condition differences but quality differences are hard to determine.

 

[TruJa]

Quality adjustments are difficult to determine especially with such large differences as noted.
I try to stay with homes with similar quality. I can make adjustments on condition differences but quality differences are hard to determine.

Here's a scenario. 3 comps in a generally homogenous subdivision. All 3 have been extensively updated (say from a C4 to a C3). Comp 1 has been updated with high quality finishes (qtz counters, hdwd floors, custom tiled baths and high Q fixtures), Comp 2 has been updated with plain vanilla finishes (laminate & vinyl, and everything home depot), and Comp 3 is halfway in between. I'd say you have likely 2 Q levels to choose from, but some Q adjustments either should be made using whatever method you think the market supports, or else don't make adjustments but reconcile toward the most similar. I don't think it matters which way you do it, but there isn't anything wrong with modeling this in the grid and adjusting accordingly as long as you are consistent.

 

[TruJa]

Here's a scenario. 3 comps in a generally homogenous subdivision. All 3 have been extensively updated (say from a C4 to a C3). Comp 1 has been updated with high quality finishes (qtz counters, hdwd floors, custom tiled baths and high Q fixtures), Comp 2 has been updated with plain vanilla finishes (laminate & vinyl, and everything home depot), and Comp 3 is halfway in between. I'd say you have likely 2 Q levels to choose from, but some Q adjustments either should be made using whatever method you think the market supports, or else don't make adjustments but reconcile toward the most similar. I don't think it matters which way you do it, but there isn't anything wrong with modeling this in the grid and adjusting accordingly as long as you are consistent.

I think it would be wrong to make 1 Q adjustment based upon Q rating.

 

[TMG]

I make smaller condition adjustments even if they're both C3. Maybe one comp has slight newer bathrooms? Does that then make the subject a C4, or that comp a C2? No.

 

[TruJa]

I make smaller condition adjustments even if they're both C3. Maybe one comp has slight newer bathrooms? Does that then make the subject a C4, or that comp a C2? No.

How would they be a different condition if they are just as updated but with different quality finishes. One is an updated Kia and the other an updated Lambo, and the other is an updated....... hmmm BMW. (I actually think Kia makes good cars).

 

[Kelly S]

How would they be a different condition if they are just as updated but with different quality finishes. One is an updated Kia and the other an updated Lambo, and the other is an updated....... hmmm BMW. (I actually think Kia makes good cars).

I love my Kia Sorento - LOL!

Looking over the report more, there is hardly any explanation for the adjustments. Explain, explain, explain!

 

[RCA]

I was given a prior appraisal on a property and the 3 closed sales are all Q3, but Comp 1 has a -$150,000 quality adjustment, Comp 2 has a +$50,000 quality adjustment and Comp 3 has no quality adjustment. The description says the adjustments reflect the superior or inferior quality finishes and workmanship. Isn't that the point of having the quality/condition ratings? Am I missing something?

I do this all the time. Q1-Q6 is not refined enough to reflect adjustments. My ratings are 0.0-10.0 which corresponds to 1-100% better or worse in the neighborhood. My quality ratings work with regression really well. So, a 5.6 means that 56% of the comparables in the neighborhood are in worse quality or condition. In fact, this really gets applied to all intangible property features.

Q1-Q6 and C1-C6 is just to satisfy the GSEs. They are not used in valuation. So, the clarification on the adjustments occurs in the Addenda based on my quality/condition rating system.

And I know others are using similar methods. You will find 0.0-10.0 in Spark for example.

 

[LordofTexas]

I make them on lower line grid and explain differences. Normally only done on high end properties and not jerking around with $10,000 differences on Ozzie and Harriet tract homes over minor differences in upgrades.

Glenn slipped up and showed his age. Man, I thought I was one of the old ones here. I'm surprised he didn't make a Perry Mason legal quote.

 

[Mejappz]

You will find 0.0-10.0 in Spark for example.

The Spark quality ratings come from Dwelling Cost, which gets the data from Bluebook International.

DwellingCost

Dwelling Cost gives you the cost data you need in a way that's inexpensive, accurate, fast, and easy to use.

dwellingcost.com

 

[RCA]

The Spark quality ratings come from Dwelling Cost, which gets the data from Bluebook International.

DwellingCost

Dwelling Cost gives you the cost data you need in a way that's inexpensive, accurate, fast, and easy to use.

dwellingcost.com

Yes, you are right. I should have looked at this closer. Didn't have time.

They use a scale 0.0 to 8.0 based on an absolute standard, rather than relative. That is still much much better than what UAD provides.

However, when I go into a neighborhood, I need to be able to deal in relative terms. Because I use the ranking (sorting) of regression residuals to define quality, condition and other intangible property features. The prices differences within the relative ranking can be very sizeable. So, my scoring is 0.0-10.0 based on percentage worse in terms of any intangible property feature, or the whole group of intangible property features.