Calculated Value per____on the 1025 form

[Michael J. Williams]

I don't do many duplexes and doing first one on the new form (1025). The question is this. Just below the sales grid on page 3 there's a small section that has the following:
Value Per Unit $___ x ____ Units = $____
Value Per Rm. $___ x ____ Units = $____
Value Per GBA $___ x ____ Units = $____
Value Per Bdrms $___ x ____ Units = $____

It seems the software (Appraisal Studio) wants to insert the numbers from the subject column at the top. Which seems to make no sense. Shouldn't the numbers be calculated from the
Adj. Price Per Unit
Adj. Price Per Room
Adj. Price Per Bedrm
and the Value Per GBA calculated from the comps Adjusted Sale Price/GBA
Who knows?

 

[George Hatch]

Different types of buyers look at properties using different measures of value. An owner-user buying a house measures the value using the sale price to the exclusion of virtually every other unit of comparison.

There are a lot of appraisers who feel that the adjustment grid in the 1025 is a much inferior way to analyze the comparable sales data for apartments. The adjustment grid uses the sales price as the unit of comparison, which is fine for houses but doesn't work that well for apartments unless the comps are all very similar in size, age, unit mix, etc.. That's seldom the case with apartments.

Appraisals for 5+ unit apartment properties do not use the gross sale price as the unit of comparison at all. If you look at the 71a and 71b forms you'll notice their grids are not adjustment grids - they're just tables that lay out all the attributes. The analysis is performed using $/Unit; $/Room; $/SqFt; and GIM (GRM for 2-4s), often on a qualitative basis where the appraiser reconciles for value by ranking the subject within the range.

If the property's value is driven by its rents and the comps are reasonably similar in location and age/condition, the unadjusted $/Room indicator will usually demonstrate a fairly narrow range among the data, much more narrow than comparing unadjusted sales prices to each other.

If a 2-4s value is not driven by it's rents, then the adjustment grid can sometimes work after a fashion but they it won't work as well as $/room.

 

[Mike Garrett RAA]

my software does these calculations automatically.