An Interesting Read for Those Still working

[J Grant]

So, do you derive bedroom adjustments based on the number of children that the typical buyer has (as the article states)? How does that work? Is it $1,500 per child? $3,500? Does the adjustment change when the child moves out?

Appraisers are supposed to be able to reason conceptually -not function like computers where a $ per child is assigned. I personally would not talk about it , or think about it as the number of children a particular buyer has. However, it is typical that buyers with offspring have at least one, (Doh, lol )and often two or more children.

Even buyers with one child often want a third bedroom or den - popularity of home offices or other flex use.

Which bedroom configurations are the most popular in communities and locations that are family-oriented?

What kind of new home floor plans do most builders offer in those locations? Usually 3 bedrooms is the starter home, and four bedrooms is an upgraded model that might sell for $ x more. Some builders offer a five-bedroom, but that is less common in lower price ranges. Few builders offer 2-bedroom homes in family-oriented communities - but many builders offer two-bedroom homes in age-restricted ( retirement) communities. Two bedrooms or two plus den are the most popular home or villa or condo model in many senior communities.

 

[DWiley]

The follow-up on the topic here is interesting in addressing buyer behavior, but the OP seems interested in some kind of preventive defense against a biased claim.

If the intent is to show how to fight a bias claim, then it seems counter intuitive to post an article replete with bias.

 

[Zoe]

Not in USPAP, location matters

View attachment 109554

Yes and many people work very homogenous single family markets and many people work very heterogenous single family markets where a house on one side of street is worth more than other side of street being identical due to land value only.

 

[DWiley]

Appraisers are supposed to be able to reason conceptually -not function like computers where a $ per child is assigned. I personally would not talk about it , or think about it as the number of children a particular buyer has. However, it is typical that buyers with offspring have at least one, (Doh, lol )and often two or more children.

Even buyers with one child often want a third bedroom or den - popularity of home offices or other flex use.

Which bedroom configurations are the most popular in communities and locations that are family-oriented?

What kind of new home floor plans do most builders offer in those locations? Usually 3 bedrooms is the starter home, and four bedrooms is an upgraded model that might sell for $ x more. Some builders offer a five-bedroom, but that is less common in lower price ranges. Few builders offer 2-bedroom homes in family-oriented communities - but many builders offer two-bedroom homes in age-restricted ( retirement) communities. Two bedrooms or two plus den are the most popular home or villa or condo model in many senior communities.

Well, you better get that all sorted out, because according to the article, Identifying the typical buyer tells you whether to adjust for bedroom count and by how much.

So, if you don't know how many kids they have you, according to the author, you can't derive the adjustment.

 

[Zoe]

Wait, what?

The title of the Article is,

USPAP’s Typical Buyer Standard in the Fair Housing Era​

but you are saying it is actually not in USPAP??

Okay, chill a minute. People are focusing on location. You are focusing on USPAP.

I reference fannie as my source for MV definition. What does USPAP reference as MV definition of value?

 

[Zoe]

Market value is very unique. MV is only value definition that requires H&B use analysis.

I have a feeling there is a disconnect between a GSE and lender and an appraiser within the analysis on MV definition as defined by Fannie.

 

[J Grant]

Well, you better get that all sorted out, because according to the article, Identifying the typical buyer tells you whether to adjust for bedroom count and by how much.

So, if you don't know how many kids they have you, according to the author, you can't derive the adjustment.

The version of his post that shows up on my computer does not show a link to a specific article; however, if an author states that the appraiser needs to know how many kids a buyer has , in order to make an adjustment that is wrong.

We don't talk about the number of kids a buyer has or base our adjustment on it - but we can, and imo need to understand and explain that in X subject subdivision and market, Two-bedroom homes sell for less than 3-bedroom homes because the 3-bedroom offer more functional utility for the buyers in that subdivision.

Appraising is not just about price; it is about marketability and appeal. Over-improvement and under-improvement, identifying properties that are outliers, etc. That is where just raw numbers/data do not tell the whole story. An 1800 sf open loft in a converted warehouse to residential has the same sf GLA as a 3-bedroom starter tract home, and both can sell for the same price- make it $400,000 for example. The data looks the same - each property is 1800 sf and sold for 400k. But the marketability and typical buyers for each are usually quite different.

 

[DWiley]

Okay, chill a minute. People are focusing on location. You are focusing on USPAP.

I reference fannie as my source for MV definition. What does USPAP reference as MV definition of value?

I focused on USPAP because the title of the article refers to "USPAP's Typical Buyer Standard." In my copy of USPAP I see nothing like that.
But that is nothing new. People often make claims that USPAP says things that it does not say.

USPAP does not mandate the use of any specific value definition. It requires the appraiser to identify the appropriate value definition.

 

[Zoe]

I focused on USPAP because the title of the article refers to "USPAP's Typical Buyer Standard." In my copy of USPAP I see nothing like that.
But that is nothing new. People often make claims that USPAP says things that it does not say.

USPAP does not mandate the use of any specific value definition. It requires the appraiser to identify the appropriate value definition.

Okay, Nashville County is way more homogeneous than Mermphis County. Stay with me.

This was keynote after I read it:

"In the fair housing era, appraisers must balance market-based valuation (USPAP’s typical buyer standard) with non-discrimination compliance. The profession’s position is that USPAP’s approach is legally sound and defensible when properly documented, and that the conflict with fair housing training is structural, not a sign of bias Appraisers Blogs+1."

There is a dichotomy between market value and lending value based on intended use and user. Would you agree?

 

[Zoe]

You know where I am going. Fastest and cheapest is fine with many lenders if they are selling to a GSE.

Weigh that against MV definition.

Lenders that keep their loans in house don't want fastest and cheapest appraiser. Many engage appraiser directly to this day and needed no bailout.