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Appraising an outlier properties

App601 said:
I am appraising a property being sold for $300000 The neighborhood, or development in which it is located has a median value of $150000 with one sale at $200000. This is the highest priced comparable sale. After I apply the standard adjustments for site, GLA etc lets say it yields $250000 a value I believe is high for the neighborhood. Do you have any suggestions about what percent adjustment I should deduct for a functional obsolescence ? 10% ? 20% ?
I searched sales for the past 5 to 6 years and typical values have remained relatively stable under $175000
So maybe its possible maximum value should not exceed $220000 or 10% above the highest sale in the neighborhood.
Is there anything written on how to deal with these kinds of properties
I will not go to another neighborhood as I have 3 or 4 comparable sales from the same neighborhood,

I would appreciate your comments
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Why are you offering inappropriate appraisal support for the subject property by including the pending contract price as a seach criteria for comparables. Rather than assume that the contract price is a value that you are obligated to support, why not interview the listing agent to determine the listing straegy, based upon specific comparable saales, presuming the sellers anicipated a buyer who would require mortgage finance; and/or interiew the Selling Agent to deermine why his clients wish to spend $xxxxx on a property that appears to be over-priced? The moivation of sellers & buyers is always a critical aspect of a purchase-related appraisal, even more so in this scenario; and no just that, but the aappraisal report is much less likely to receive an ROV when the report indicates that neither Lising nor Selling Agent was able to justify the pending contract. [I don't know if peers agree with me, but it works ALWAYS.]
 
DWiley said:
If you adjust for functional obs then you need support for that adjustment - support beyond "someone on AF said..." :)

You might not go to another neighborhood for direct comps, but you could look in other areas for other over improvements that have sold, and extract a discount rate by comparing that sale price to the price of other homes in that area.
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Sometimes I wonder whether anybody ever actually cited the AF as source of "peer practice" in a testimony or response to a sanction. Far as I know the AF is by far the most vaaluable source of contemporary peer appraisal perspective...
 
As I said before there's always a reason why the high price can be an "outlier". There is an explanation and he found it. Good for him.
 
Fernando said:
As I said before there's always a reason why the high price can be an "outlier". There is an explanation and he found it. Good for him.
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Fernando Es un outlier
 
ZZGAMAZZ said:
Sometimes I wonder whether anybody ever actually cited the AF as source of "peer practice" in a testimony or response to a sanction. Far as I know the AF is by far the most vaaluable source of contemporary peer appraisal perspective...
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It is but some people use it for insults rather than help
 
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