Bedroom Vs. GLA Adjustment

[Nancy Heiss]

This may be true in other states SO -CA is a place with a large ethnic community and 2 to 3 bedroom can be significant SO the appraiser and the reviewer need to understand their market ..2 Bed Rooms in some markets are worth "significantly less " BUT IN West Hollywood or in San Francisco there may be no difference at all ** If the poster had stated where the CONDO was ( Not address but just city or community ) WE could nail-it down in about 40 minutes . No offense to the poster because he/she has probably not done a lot of reviews and the bulls eye appraiser one this battle : ) LOL

Actually, I was not doing a review, per se. I had done an appraisal on another unit in this complex and a real estate agent sent me a copy of the appraisal on a pending sale. Basically a model match, yet that appraiser hit the purchase price number even though none of the other sales in the development have sold at that price and the most similar competition are larger units that adjust down below purchase price. The lender on 'my' unit is asking for a reconsideration of value, citing 3 'comps' (1 sold, 2 under contract) which I had already used in my original report. Of course, I had not given the listings any weight in the final estimate of value, since both seemed to have some issues and may not close. This particular development is in Garden Grove.

 

[Nancy Heiss]

And maybe some amenities.

Some projects I have seen a $100k diff between 1 bedroom and 2, even though size was very close. One of the full service high rises on Wilshire where prices run past $1Mil easy.

Floor level can make a gianomous difference in LA as well. I've done my share of those downtown condos. Beautiful floor to ceiling windows with a striking view of the city (if you WANT a striking view of LA).

 

[Nancy Heiss]

I love all the back-and-forth here, which is exactly what I was after. Am I wrong in my adjustments or lack thereof? When I did the historic research, I feel I made appropriate adjustments. I agree with the different utility of 2, 3 or 4 bedrooms, however while a buyer who was looking for 4 bedrooms may not purchase a 2 bedroom, it is possible that they may choose a 3 bedroom (as is the unit I am appraising). Since there were a lack of similar 3 bedrooms, both myself and the other appraiser used 2 and 4 bedroom units. I used 9 comps, 6 closed and 3 active or pendings) to justify/verify that my adjustments were in line and accurate. My adjustments ranged from 0% to 6.9% on the closed sales, whereas the other appraiser went as high as 22% Which does not make him wrong and me right. If the 2 units under contract close in the next week or so for the contract amount, then would I need to rethink or adjustment my estimate of value? Or are the buyers over-paying?