Bracketing, Part Deaux

[truk1]

I am just finishing a report that has 2700 GLA outside town limits in a rural setting. Closest comparable is about 100 GLA less. Looked every direction to bracket square footage but no go. Just finished writing the book to support my opinion. Can't wait until Monday to see what the client thinks. May need to borrow the chainsaw from T. Shields!

 

[Frederick R. Ruffell]

OK, I did not read all the posts but what everyone seems to have overlooked is that you should attempt to bracket those individual AMENITIES that the market deems as significant. You do not just bracket for condition or GLA or Site size etc... but for all that are significant. I would say that GLA is the big one around here as you can explain 90%+ of price difference with GLA. You may actually have to use more that 3 sales!!!!!!!

 

[Mike Boyd]

That's a pretty bogus paragraph and also excessively hyperbolic for an "objective" analysis. The "perfect world" thing is unprofessional and condenscending.

I'll have to agree with Jim. If one has any experience in the appraisal process one would know that bracketing does not necessarily pit a superior house against the subject and then an inferior house against the subject.

 

[Abester]

Believe it or not I have reviewed reports that did not have the value opinion bracketed by the adjusted sales prices.......

And sometimes that's a good thing...

 

[Harvard]

Logic would tell one that in every neighborhood there is a best and a worst property. If you happen to be appraising the best property, is it fair to the value opinion of that property that it must be bracketed and therefore the subject value cannot exceed the highest past sale?

I have a similar situation now regarding a former builders model in a 55+ community. The property is located on the best lot and loaded with amenities. It should appraise at a higher value than the most recent sales. If I bracket it it wont be a fair value. Or should it be considered overimproved?

 

[Mike Kennedy]

1. " It should appraise at a higher value than the most recent sales.

WHY??


2. "Or should it be considered overimproved?"

:icon_idea: The absence of truly comparable actives, contracts, and closed sales will give you the answer.

3. "loaded with amenities" which may or may not return any contributory
value. Cost has zero bearing on market value.

What does the Market say????? Listen to it.

 

[Frederick R. Ruffell]

1. Cost has zero bearing on market value.

This may be true but the cost approach (if developed and applicable) does have a bearing on your Final Opinion of Value!

Value indicated by SA = $150,000
Value indicated by CA = $155,000

Final Reconciliation placing 60% weight on SA and 40% weight on CA = $152,000 FOV.

Just depends on how much you want to educate an underwriter as to how to perform a USPAP compliant appraisal, LOL

 

[Blue1]

or the use of both superior and inferior comparable sales

I think some folks have to be careful what they put into their reports. This one phrase negates the rest of the paragraph. If the sales used are comparables then how can they be superior or inferior to the subject significantly enough to render them NOT comparable?

Or..is that the point...what the heck is the point anyway? Bracketing? It's just a catch-phrase used mostly by non-professionals. Let's not get hung up on lingo...

 

[RSW]

Fannie Mae Guidelines! Please read them. If you cannot follow them then you must explain why you could not and why you did what you did.

 

[Frederick R. Ruffell]

I think alot of posters here are confused about " Bracketing" and what it is.

You do not "Bracket" comparables, you "Bracket" amenities.

So, find comparables with a larger GLA and a smaller GLA, find comparables with a pool and without a pool, with a view without a view, superior condition and inferior condition, etc....