• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Forum Sponsor - a la mode

Learn more about Titan Reports, our new cloud-based formfiller, SmartExchange, Titan Office, and Titan Drive to see how you can revolutionize your appraisal business.

Bad Numbers from Residential Component Technology

Status
Not open for further replies.

Terrel L. Shields

Thread Starter
Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
In a previous post regarding the discontinuation of the Boeckh Residential Building Valuation System, and its replacement with M&S/Boeckh Residential Component Technology, I compared the two products against a 512 SF cabin that I had numbers for in a recent appraisal. Cost $25K with owner doing some work. Boeckh RBVS estimated $29,494 which is consistent with what i was thinking. M&SB? The Res. Component Tech calculation was a whopping $43,321 and only then when I took out all architect, builder fees, and contractor's overhead profit...with those it was an insane number approaching $100 per Sf for a plywood cabin.

I have emailed MSB for an explanation. If there is no way to adjust these numbers without guessing, then I am better off with a $40 Craftsman Building Guide than MSB. What the H--- are they thinking?

ter
 

EDWARD BERRY

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Terri,

What grade did you use?

For Arkansas, you have to drop down grade(based upon 25 years using M&S)
crazy ed in arkansas
 

Terrel L. Shields

Thread Starter
Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Ed-

The computerized versions have no grade as in M & S. Boeckh does have grades that reflect their book grades and uses a survey to allocate points and suggest a grade and no adjustment was necessary. An S grade is a simple box. An A grade is a minimum FHA grade. B and C are builder custom homes. Old pre-40s homes are XX and YY, Pre-1980 may be AA, etc. You could grade it just like they say and the numbers were very reasonable. I checked it against actual construction time and again. I do agree in the NW Arkansas area M & S tends to be somewhat higher, but not 30% higher. The RCT disk does not have the same kind of initial formating and there is no subjective grading to do. It should determine the grade by the components in the house, but this is vastly overpricing the examples I tried in my opinion.

Marshall & Swift / Boeckh is supposed to get back with me about it.
 

Terrel L. Shields

Thread Starter
Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
I just got off the phone with Susan at Boeckh and was told that the RTC program is strictly an insurance product. RE7 [Marshall/Swift product] is the recommended product for appraisers, (and of course, it is substantially higher price than RBVS was).

RTC replicates RECONSTRUCTION cost not REPLACEMENT cost thus is higher always.....as it apparently includes demolition costs, etc.

She stated that the Boeckh cost books were still going to be available at least for 2003. I would REALLY miss those books. Boeckh commercial and farm cost books are so much easier to use than Marshall & Swift as well as cheaper and, imho, a little more conservative thus closer to what my real world costs are in this area.

Some people argue for M & S to use a grade lower than indicated for values in NW Ark. I tend to think the difference lays not in grade (quality) but in the contractors profit/architect fee/contingency allowances. In our area those tend to be lower than average, especially on farm type buildings. Most rural structures are built with the owner acting as their own general contractor and the same applies to a relatively high percentage of houses. Spec houses selling for $75/SF are routinely built for $65/SF when the owner acts as the contractor, and homeowners rarely pass on that cost if they sell shortly after building.

For those of us who have used RVBS and BoeckhCheck before it, loss of the program is a disappointment, with M &S so expensive for so few properties that I need it, I am unlikely to renew the computerized versions. Guess it is back to the books, so to speak.
 

EDWARD BERRY

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Arkansas
TERRI,

ALL you have to do is take a sale, use the M&S long form, work from the bottom up, taking out the knowns and what is left is the base price for that structure.

Then consult the m&s grades. Usuallly in Nw ark it is one grade down from the description in the book.

One in a while on mass produced you will have to deduct say 5%.

With some builders you may have to add 5%.

Then you have a track record of builders and designs.

Have over 4,000 examples since 1976 done this way.

The market is smarter than m&s or me.
respectfully-ed in ark.
 

Terrel L. Shields

Thread Starter
Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
True enough, but that is not a grade factor. It is part of the soft costs. Soft costs are higher if Fayetteville for instance, than Siloam Springs. That's reflected in the SF costs in the NW Arkansas Planning Commission building costs Quarterly.

In a forensic situation, I would rather argue that I made a 7% deduction from "Average" Grade to account for difference between actual local cost and M & S than I would to argue I called an "Average" "Fair" quality. I.e.- I'll take my deduct at the end, rather than the beginning of my calculation. With Boeckh, however, I did not have to and in their computer program, if I elected I could add a factor if I felt it was warranted. Boeckh's numbers were already more conservative than M & S. In calculating my own house, I had a very good match between Boeckh, that Shelter Ins. survey I alluded to somewhere else, AND my actual cost x Historical Cost factor. All three were within 3-4%.

Wanna know something else? I recently had a woman run through my fence and corner post at the driveway which wiped out my driveway alarm system as well. The adjuster showed up today. I had a Claims Rep for Carter Appraisal Service (largest claims adjusters in Ark) show me the book he uses to adjust damaged houses or commercial buildings. Guess what? It was a $40 Craftsman Renovations and construction cost manual. He claims the database is resold to other cost services and is relied upon in one form or fashion by the majority of adjusters in the nation...Maybe he was right...
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks