An Interesting Read for Those Still working

[Zoe]

If I lost you, Davidson County is way more homogeneous than Shelby County.

 

[NC Appraising]

Man, I learned a lot from that post. For example:

• Is a third bedroom important? That depends on who is buying. A young couple without children may trade that third bedroom for a larger primary suite. A family with two children will not. Identifying the typical buyer tells you whether to adjust for bedroom count and by how much.

Silly me, I thought that such an adjustment would be derived by looking at data (e.g. sales prices of 2BR homes vs 3BR homes).

I understand what they are trying to say.....they need to reword it....that's more of an explanation of why they made the adjustment, not how.

fwiw, are we allowed to say why using family or children...kinda like using school..a big no no. Can't say why anymore....just data says.


I use cost depreciation for bedroom adjustments....LOL. Sorry, couldn't resist.

I just hope the man behind the screen realizes that there is more to it than just a 2 bedroom home and a 3 bedroom home....in a 55+ community, most have the option of a additional third bedroom or a 2 bed with a office/flex space. Depreciated that.

 

[DWiley]

I understand what they are trying to say.....they need to reword it....that's more of an explanation of why they made the adjustment, not how.

Would the reason for making the adjustment not be the fact that there is a demonstrated price difference between 2BR homes and 3BR homes (regardless of the reason for the difference)?

And, this one ... well, I have no words.

• Are bright Caribbean colors of interior walls a positive or negative vs a vanilla shell? What are the cultural norms for people who buy in this area? Are they white college educated people working in pharma? Or are they mostly Indian 1st and 2nd generation legal immigrants?

SMH

 

[Terrel L. Shields]

demonstrated price difference between 2BR homes and 3BR homes (regardless of the reason for the difference)?

And in cases where there are not a "demonstrable" difference? I see that often enough. A local POA regs and septic tank limitations skew some properties. It's a choice when regardless the labeling, dwellings are selling pretty much on condition-age and size only. Of course, the Realtors often list them as what the rooms are utilized for, not what septic limits are. They finally wised up when one agency had to buy a house back after the undersized septic system clogged up and was only 1 bed approved but sold as a 3 bedroom house. I did a 2,400 SF house (empty nest couple) who had only 1 bedroom to conform to the septic limitations imposed by Standard 7 of the Health Dept. But they had a study, a library, a den, and a sewing room... all with closets except the den. And it had 3 bathrooms. Septic systems are not sized on bathroom or fixture counts. I know I worked as geotech for that developer and was part of the team who sized the properties based upon the perk tests.

 

[OSU Beavers]

The problem is not in the analysis, but in how we are still restrained from reporting the FACTS about the neighborhood by Biden's DEI crowd.

 

[NC Appraising]

Would the reason for making the adjustment not be the fact that there is a demonstrated price difference between 2BR homes and 3BR homes (regardless of the reason for the difference)?

And, this one ... well, I have no words.

• Are bright Caribbean colors of interior walls a positive or negative vs a vanilla shell? What are the cultural norms for people who buy in this area? Are they white college educated people working in pharma? Or are they mostly Indian 1st and 2nd generation legal immigrants?

SMH

I still kinda understand where they are coming from.....not saying that I agree. They are pointing out the why. Data can give you the adjustment, but cannot always tell you why. This is where experiance comes in. Sometimes knowing the why can help you to identify when to make the adjustment, not to make the adjustment or to help you to understand the price difference.

What is wrong with knowing they why? Knowing the why can help in future assignments to recognize when a adjustment needs to be made or that one sale maybe an outlier.

I got roasted by the potato man last time for this example...but here goes.

There is a large Indian population in my area. This has taken place within the past 5 years. I started noticing that the agents would list how the homes face. Vastu Shastra. When doing refis, the Indian owners would point out the direction of how the home faces. They would even tell me about comps and how they faced.

Not knowing this, I would never have been able to know why home a sold for x amount and home b sold for x amount, but are model matches. Was it just an outlier? Ofcourse I would not say indian in my report. Just homes facing in said direction sale for a higher price, based on the analyzed data.

Per AI, many traditional Indian buyers prioritize Vastu when searching for a home. Homes facing preferred directions often sell faster and command a price premium.

I enjoy learning about other cultures....and I learned something new. Markets change and preferences change.

 

[chad hampton]

It’s critical for an appraiser to be have significant real world experience in their local market.

Hopefully that’s on page 1 of USPAP.

 

[DWiley]

It’s critical for an appraiser to be have significant real world experience in their local market.

Hopefully that’s on page 1 of USPAP.

The COMPETENCY RULE in USPAP says that even if you don't have that experience, you can gain the necessary competency, provided you provide proper notice to the client prior to acceptance of the assignment and proper documentation in the report. (lines 383-396 in the COMPETENCY RULE)

The GSEs, on the other hand, do not allow for the flexibility. They require prior experience with a similar property in the same market area.

 

[jay trotta]

IMO-read the article if you wish or Not;

The Irreconcilable Conflict Between USPAP’s Typical Buyer Standard and the Current Fair Housing Compliance Regime. Retain this document as a reference should you face a complaint grounded in disparate impact theory alone. The three-safeguard framework from Inclusive Communities provides a robust defense for any appraiser whose methodology is USPAP-compliant, well-documented, and market-supported.
Introduction

I want to state plainly what the appraisal profession has been tiptoeing around since roughly 2019: an appraiser cannot simultaneously comply with:

1- USPAP’s requirement to identify and analyze the most probable (typical) buyer of a property via market data AND…

2- comply with the current iteration of fair housing training that demands the appraiser blind themselves to the characteristics, preferences, and decision-making patterns of that same buyer.

These two mandates point in opposite directions. One requires the observation and prediction of actual market behavior. The other requires the appraiser to disregard that behavior. You cannot do both. This is not a political statement. It is a professional and legal one, and I intend to demonstrate it.


As the writer expands on the issue a good deal, there is a portion which everyone who is "practicing" should read closely.
Good Luck to those who read the article

 

[NC Appraising]

https://www.redfin.com/NC/Charlotte/4747-Green-Mountain-Dr-28215/home/176225064

About this home​

North facing home. Open floor plan. Engineered Hardwood flooring for entire main level. Kitchen has Stainless steel appliances and quartz counter top