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Correct Method To Obtain The Adjusted Sales Price Range

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Cleveland Strong

Freshman Member
Joined
May 26, 2017
Professional Status
Licensed Appraiser
State
Ohio
I have a client that wanted me to remove my comment indicating the adjusted sales price range is over 10% per their guideline requirements.

Highest sales is $$68,404 Lowest sales is $61,884 = $6520/$61,884 = 10.5% which is the method I used
they indicated the range is 0.09% which occurs if you the difference $6520 divided by the higher adjusted sale of $68,404/$6520 = 0.09%. I cannot locate anything in writing confirming my method over theirs. Can anyone help me locate this in a textbook or something to prove the correct method? Thank you
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
They are correct. Look up the formula for calculating the percentage difference between two numbers.
 

Cleveland Strong

Freshman Member
Joined
May 26, 2017
Professional Status
Licensed Appraiser
State
Ohio
They are correct. Look up the formula for calculating the percentage difference between two numbers.
Thank you. I did and I was correct based on this.
Percentage Change Between Two Numbers
The percentage change between two numbers depends on whether we are considering a reduction in value or an increase.
A reduction in value will always result in a higher percentage change than will an addition in value. That's because the higher the base, the lower the percentage for any given change.
For example:
Reduction from 25 to 20 will result in a 20% reduction (25-20=5/25x100).
Whereas:
Increase from 20 to 25 will result in a 25% increase (25-20=5/20x100).
 

timd354

Elite Member
Joined
Jan 11, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
I have a client that wanted me to remove my comment indicating the adjusted sales price range is over 10% per their guideline requirements.

Highest sales is $$68,404 Lowest sales is $61,884 = $6520/$61,884 = 10.5% which is the method I used
they indicated the range is 0.09% which occurs if you the difference $6520 divided by the higher adjusted sale of $68,404/$6520 = 0.09%. I cannot locate anything in writing confirming my method over theirs. Can anyone help me locate this in a textbook or something to prove the correct method? Thank you
The correct answer is 10.00859%, which would commonly be rounded to 10% or 10.0%. The denominator in the calculation should be the average between the low end and high end of the range, which in this case would be $65,144, so the correct calculation is $6520/$65,144

In any case, what a silly thing for the lender to get hung up over as whether or not this comment is included in the report has no effect on the collateral risk. I would be very unhappy if one my underwriters issued such a silly stip.
 

timd354

Elite Member
Joined
Jan 11, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
Thank you. I did and I was correct based on this.
Percentage Change Between Two Numbers
The percentage change between two numbers depends on whether we are considering a reduction in value or an increase.
A reduction in value will always result in a higher percentage change than will an addition in value. That's because the higher the base, the lower the percentage for any given change.
For example:
Reduction from 25 to 20 will result in a 20% reduction (25-20=5/25x100).
Whereas:
Increase from 20 to 25 will result in a 25% increase (25-20=5/20x100).
You are using the wrong formulas. You are not trying to calculate the percentage increase or the percentage decrease between two numbers, but you should be trying to calculate the percentage difference between two numbers. The proper formula for calculating the percentage difference between two numbers (A & B) is (A - B)/(A+B/2)
 

Cleveland Strong

Freshman Member
Joined
May 26, 2017
Professional Status
Licensed Appraiser
State
Ohio
The correct answer is 10.00859%, which would commonly be rounded to 10% or 10.0%. The denominator in the calculation should be the average between the low end and high end of the range, which in this case would be $65,144, so the correct calculation is $6520/$65,144

In any case, what a silly thing for the lender to get hung up over as whether or not this comment is included in the report has no effect on the collateral risk. I would be very unhappy if one my underwriters issued such a silly stip.
I totally agree. It really agitated me. Some of the silly things they are doing has increased the time of completion for reports and the constant silly requests for "revisions" which are not necessary should the read the actual report/addendum which spells everything out. Thank you for taking time out of your day to assist me. Very much appreciated.
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
I have a client that wanted me to remove my comment indicating the adjusted sales price range is over 10% per their guideline requirements.

This is a ridiculous "requirement"; especially given the scale of the value range we are talking here.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
And can prove he can do math.

Rate of Change formula.

.
 

glenn walker

Elite Member
Joined
Oct 11, 2006
Professional Status
Certified Residential Appraiser
State
California
The nutty reviewer has nothing better to do so just remove the comment and be done before he comes up with some other wacky issue.
 
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