Appeal adjustment

[Tim Hicks (Texas)]

Boy I haven't heard that term for decades. Never a good connotation.

Obviously a typo, I have no idea what that word means, but I bet it is not good.

 

[glenn walker]

Covid-19 Lock Downs have made me cranky so I am going to play the devils advocate. The OP has obviously fallen in love with this property and its design, and thats OK except its higher value has probably more to do with its over all Physical Condition and not because of its a Colonial Design .

Now since the OP is a Broker I am going to take my appraisal hat off and put on my brokers hat. If I was listing the property for sale or doing a BPO for a bank or lender, then my job is to obtain my seller the highest price possible but, if its a BPO or helping the bank establish a reasonable and supportable value future sale or for an-annual trust audit, or where the owner is obtaining a new loan, then its my duty to not get overtly zealous, and to not fall in love with it. I have to try to and to arrive at a value that can be supported and defended.

As far as the Third Generation Dog Doctor owning it ? In my area we call those people Veterinarians and I have no idea what that has to do with anything. So my advice is clear your hard drive ( brain ) and set the appeal adjustment to the side, and concentrate on your gross living area, physical conditions, quality of construction , locations, lot or land size adjustments, and then stand back and look at the property as a package deal.

Good Luck in 2021 : ) LOL

 

[ZZGAMAZZ]

Covid-19 Lock Downs have made me cranky so I am going to play the devils advocate. The OP has obviously fallen in love with this property and its design, and thats OK except its higher value has probably more to do with its over all Physical Condition and not because of its a Colonial Design .

Now since the OP is a Broker I am going to take my appraisal hat off and put on my brokers hat. If I was listing the property for sale or doing a BPO for a bank or lender, then my job is to obtain my seller the highest price possible but, if its a BPO or helping the bank establish a reasonable and supportable value future sale or for an-annual trust audit, or where the owner is obtaining a new loan, then its my duty to not get overtly zealous, and to not fall in love with it. I have to try to and to arrive at a value that can be supported and defended.

As far as the Third Generation Dog Doctor owning it ? In my area we call those people Veterinarians and I have no idea what that has to do with anything. So my advice is clear your hard drive ( brain ) and set the appeal adjustment to the side, and concentrate on your gross living area, physical conditions, quality of construction , locations, lot or land size adjustments, and then stand back and look at the property as a package deal.

Good Luck in 2021 : ) LOL

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Mod: I receive an email notification with the text of every new AF post in every thread that I am following; however, the text of the email I just received isn't the same as the AF post itself. How is that possible (especially because the email version was much more edifying, and interesting)???

 

[glenn walker]

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Mod: I receive an email notification with the text of every new AF post in every thread that I am following; however, the text of the email I just received isn't the same as the AF post itself. How is that possible (especially because the email version was much more edifying, and interesting)???

Why don't you ask Head Surfer how it all works : )

 

[Sadie]

Subject is a 2 story colonial, remodeled and updated in every way and has great landscaping and street appeal. Sale 1 is a Hideous Victorian (hideous with capital H) with an ugly addition on the side visible from the street. Sale 2 & 3 are Contemporary, 70s contemporary that look like they’re in a Twilight Zone movie set. The subdivision is a classic example why neighborhoods began establishing ARC’s. All 3 sales are similar in quality, condition and GLA. I do have a 3 year old colonial sale and an ugly 70s contemporary in the subdivision in my file just in case I get reviewed by an AMC team leader with an ax to grind, I’m not gridding it in my report, but I did reference both those sales. Even so, the adjustment is subjective, this is not one for slide rules. I’m not concerned about a witch hunt, the client is a local lender, paper will be in house and if there are any questions the bank VP will call me. Also, the borrower is a 3rd generation dog doctor who owns 4 clinics, the loan is a low LTV so it’s as low risk as a loan can get….that satisfies my inner underwriter. Now on the adjustment, because I “feel” it is warranted and supported. I know you excel geeks who spend 4 hours per report for adjustments will disagree, but many adjustments we make in the real world have a large degree of subjectivity based on prior reports, assignments, market knowledge and how buyers and sellers react in the market, buyers don’t typically use excel spread sheets to determine if a house is ugly or how much their offer should be. With that being said, I hope the bank doesn’t sell the loan to BOA and run it through PCV and hot spot.

The whole problem the the "appeal" adjustment is its subjectivity. If you break down what is so awful about the comparables, make the adjustment there. Get past the eyesore and adjust for why its an eyesore.

 

[ucbruin]

Why don't you ask Head Surfer how it all works : )

It's akin to the topic of this thread....
It's subjective....

 

[andrew81]

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Mod: I receive an email notification with the text of every new AF post in every thread that I am following; however, the text of the email I just received isn't the same as the AF post itself. How is that possible (especially because the email version was much more edifying, and interesting)???

its called the edit button

 

[andrew81]

I do have a 3 year old colonial sale and an ugly 70s contemporary in the subdivision in my file just in case I get reviewed by an AMC team leader with an ax to grind, I’m not gridding it in my report, but I did reference both those sales.

seems like you have it figured out.

discuss sales used and not used

 

[J Grant]

Subject is a 2 story colonial, remodeled and updated in every way and has great landscaping and street appeal. Sale 1 is a Hideous Victorian (hideous with capital H) with an ugly addition on the side visible from the street. Sale 2 & 3 are Contemporary, 70s contemporary that look like they’re in a Twilight Zone movie set. The subdivision is a classic example why neighborhoods began establishing ARC’s. All 3 sales are similar in quality, condition and GLA. I do have a 3 year old colonial sale and an ugly 70s contemporary in the subdivision in my file just in case I get reviewed by an AMC team leader with an ax to grind, I’m not gridding it in my report, but I did reference both those sales. Even so, the adjustment is subjective, this is not one for slide rules. I’m not concerned about a witch hunt, the client is a local lender, paper will be in house and if there are any questions the bank VP will call me. Also, the borrower is a 3rd generation dog doctor who owns 4 clinics, the loan is a low LTV so it’s as low risk as a loan can get….that satisfies my inner underwriter. Now on the adjustment, because I “feel” it is warranted and supported. I know you excel geeks who spend 4 hours per report for adjustments will disagree, but many adjustments we make in the real world have a large degree of subjectivity based on prior reports, assignments, market knowledge and how buyers and sellers react in the market, buyers don’t typically use excel spread sheets to determine if a house is ugly or how much their offer should be. With that being said, I hope the bank doesn’t sell the loan to BOA and run it through PCV and hot spot.

sounds like you already did it ? I would not make a separate line item adjustment for what you describe, I would simply reconcile it at higher end of value and explain the well maintained and updated facade and landscaping contribute to appeal.

If you already made the line item adjustment, expect the UW to come back asking for "support" or another comp or 2 with same appeal. You opened the door , so count yourself lucky if UW does not ask for it. Regardless of an owner income or ltv ratio of loan, any appraisal /loan file can be audited or reviewed at a later date and imo making an adjustment like this is a red flag for a review, right or wrong .

 

[djd09]

appeal average +10,000.