Appraisal Reviewer

[graindart]

If I don't mention any lot size differences in the addenda, I at least type something like "offset" or "equal" in the grid. This at least lets the reader know that I noticed that there's a difference in lot size, but no adjustment was warranted. That having been said, I'll usually mention something in the addenda also as to why the different sized lots were considered equal.

 

[Jeff Horton]

Originally posted by Shirley Yukon@Nov 27 2003, 03:49 PM
If there is a pretty significant difference in lot size, I would make an adjustment no matter what just so the lender doesn't come back at you asking why no adjustments were made. If it doesn't really effect value, make a soft adjustment.

I don't normally do this but........

WHY?? If no adjustment is needed why lie and make one? If no adjustment is needed say so and explain it. Making unnecessary adjustments is no better than not making needed adjustments.

And what is a "soft" adjustment? Is that the same as an unnecessary adjustment?

 

[Shirley Yukon]

Why? I'll tell you why. Because a reviewer will notice a difference in lot size and want to know why no adjustments were warranted. A difference between a 3k lot and a 5k lot might not be anything in a particular area, but by not making an adjustment is a red flag to the reviewer. So you make a soft adjustment of say $1.00 per square feet or .50 cents per square feet. That way, no problems. You heard me?

 

[Carnivore]

Shirley,

What part of the country are you in?

A red flag to me as a reviewer are adjustments that dont appear to be market supported. For example, In most cookie cutter subdivisions I work in, a lot adjustment is absolutely not market supportable. Many times in these s/d's lots although different in size have the same functional utility and similar privacy, slope, ect.. Buyers in these s/d's dont determine lot size as a predominate factor and all else is secondary. I am not saying that a lot size or location within the s/d is never considered. I am saying that this would be almost impossible to extract from the market considering Scope, Purpose and intended user of the report.

Now having said all that , I will tell you that I work many s/d(high end) that you will be wrong and wrong in a very big way if you dont make an adjustment for lot size. Eastover, Myers Park and Dilworth S/d in Charlotte are great examples. Eastover 1 acre lots are worth approximately 1 - 1.5 million. Myers Park 1/4 acre lots sell for around 600K, 1/2 acre around 750-800k. Dilworth is a historical district and its very difficult to determine some values in here due to the strict requirements of this district, but there are large differences because of a segmented submarket in this s/d.

Making arbitrary adjustments like you have suggested will cause an unfavorable comment in any review I would do on your work. I would even go so far as to question your geographical competency, a clear USPAP requirement. You definitely would be a very unhappy camper after I got done with your report. Any rebuttal on your part would subsequently be trashed as I would then put forth evidence in the review beyond normal summary work to end the discussion.

Take you job seriously and people will take you seriously. Stop trying to second guess readers of your report. It suggest that you dont believe in your on work product.

 

[Shirley Yukon]

give me a break. I'm not talking about cookie cutter homes and if you are truly a reviewer and you saw a significant difference in lot size, that went unadjusted, you'd be a fool not to question it.

 

[Michigander]

There is absolutely no need to be so uncivil to each other over a difference of opinion!

Appraisers by nature are opinionated, it is our job; it is what people pay us to do; render an opinion.

Lot values in my area are determined by so many different factors that saying blankly that one adjusts for square foot differences just wont fly. Some neighborhoods warrant it, others do not. When I did my demo, one of the adjustments that I extracted was on lot size, but it was a cookie-cutter neighborhood. Other neighborhoods don't see a difference from an acre lot to a 1.5 acre lot.
Personally though, I like to do what "graindart" does

If I don't mention any lot size differences in the addenda, I at least type something like "offset" or "equal" in the grid.

if there is any significant difference in lot size. At least then whoever is looking at my report knows that I have considered the site differences.

best, Rachel

 

[Carnivore]

Originally posted by Shirley Yukon@Nov 28 2003, 03:38 AM
Why? I'll tell you why. Because a reviewer will notice a difference in lot size and want to know why no adjustments were warranted. A difference between a 3k lot and a 5k lot might not be anything in a particular area, but by not making an adjustment is a red flag to the reviewer. So you make a soft adjustment of say $1.00 per square feet or .50 cents per square feet. That way, no problems. You heard me?

Since you have publicly admitted to making arbitrary lot size adjustments not from market data but from potential reader questions.

I Strongly suggest you read:

USPAP 2003 Lines 236-274

If you would like a PDF version of USPAP 2003 I will gladly e-mail it to you.


have a nice day.

The Fool from Charlotte

 

[BenLuby]

A factor that I see in some subdivisions, and others warrant different adjustments, is that some of the lots located in certain subdivisions have unbuildable land, located behind a house or on too steep a slope to warrant building on, so the builders, when selling, throw the excess land in.
Other subdivisions, lot size has to be considered. You can go one mile and have lots varying by $10,000 or more. And I am talking similar size lots.

 

[Mike Garrett RAA]

Market supported adjustments...not those "just made up". Do you have new construction going on in your market? Check with some of the sales offices and see what like of "lot premiums" are being paid. While I tend to agree that not making a lot adjustment when the difference is substantial...the appraiser MUST obtain the data from the market. Use the extraction method, if nothing else.

 

[Shirley Yukon]

Originally posted by Andrew - Charlotte@Nov 28 2003, 09:54 AM
Since you have publicly admitted to making arbitrary lot size adjustments not from market data but from potential reader questions.

I Strongly suggest you read:

USPAP 2003 Lines 236-274

If you would like a PDF version of USPAP 2003 I will gladly e-mail it to you.

have a nice day.

The Fool from Charlotte

Oh come on!!!. We all know 99.5% of appraisers violate USPAP. Am i right or am I right?