Cost to cure adjustment on the grid?

[Mike Ault]

Site Your Source we have been doing it for 40 years on a lower grid- Just state what it is also I can write Mickey Mouse in a lower grid but make no adjustment--

As long as you clearly identify yourself as a fool while you're doing it. Cite your source when you state that "there was no insurrection" as well.

 

[J Grant]

Site Your Source we have been doing it for 40 years on a lower grid- Just state what it is also I can write Mickey Mouse in a lower grid but make no adjustment--

His source is the fundamental of appraisal which is cost does not always equal value - and the adjustments on the grid are value adjustments, not cost adjustments.

Otherwise, why not adjust for the cost of the pool, the cost of the garage ? But we do not do that, we adjust for their value contribution and market reaction.

 

[Terrel L. Shields]

I don't like using 'costs' in an SCA grid, as that should be reserved for market reactions.

Cost related adjustments are common in many reports I've seen over the years. I don't see them as particularly accurate, but I know appraisers yet that apply depreciation to fireplace adjustments by using the M & S "cost" of a fireplace...pool...outbuilding. OTOH...

When I try to extract a fireplace in a regression, I may get a reasonable answer but normally it gets either a ridiculous answer or the R square goes to pot. Boot it out and the R square is much higher. Or in this example, it was pretty reliable - ended up $5,480 for an adjustment for fireplace. I don't see a need for using cost for a fireplace, brick v siding (kind of a quality issue) garages, etc.

 

[Terrel L. Shields]

"there was no insurrection"

Portland must have been world war III by comparison to a handful of chumps- most who have been charged with trespassing.

 

[glenn walker]

His source is the fundamental of appraisal which is cost does not always equal value - and the adjustments on the grid are value adjustments, not cost adjustments.

Otherwise, why not adjust for the cost of the pool, the cost of the garage ? But we do not do that, we adjust for their value contribution and market reaction.

A request for a cost to cure is just that and you can put it anywhere you want in the report but never once asked anyone in a review to remove it.

 

[J Grant]

A request for a cost to cure is just that and you can put it anywhere you want in the report but never once asked anyone in a review to remove it.

A cost to cure as an estimate can go anywhere in the appraisal

However, the problem with this one is client did not just ask for a cost to cure estimate, they instructed the appraiser to put it on the SCA grid as an adjustment, and doing that will change the value.

 

[glenn walker]

Portland must have been world war III by comparison to a handful of chumps- most who have been charged with trespassing.

Mike it so screwed up he even has to bring his woke politcis into cost to cure issue . He is about to know what its like in a fight between a Pit Bull and A Poodle as he is going to be the Poodle

 

[Mike Ault]

A request for a cost to cure is just that and you can put it anywhere you want in the report but never once asked anyone in a review to remove it.

If you put a hard cost to cure in the adjustment grid and made no adjustment then I would ask why? If you put a "hard cost to cure" in the adjustment grid and adjusted for it $ for $ you must must have BS'ed all your clients into thinking that you were doing your job properly. If a bunch of appraisers on the Appraisers Forum can't agree on the proper methodology to handle that how is your client to know? But you (especially you) are supposed to.

 

[glenn walker]

A cost to cure as an estimate can go anywhere in the appraisal

However, the problem with this one is client did not just ask for a cost to cure estimate, they instructed the appraiser to put it on the SCA grid as an adjustment, and doing that will change the value.

He does not have to adjust for it but if it has no large $$ effect but if it does he can do it as an addendum .
Its not a big deal -- JUST DO IT AND BE DONE.

 

[Terrel L. Shields]

The EI should not be ignored...agree 110%

So you pull a number out your Azz because you THINK (but cannot prove except by speculation) there ought to be some adjustment for the imaginary risk? And EI? for what? Repair men charge what they charge. The cost books include typical costs and labor. EI applies to the first sale of a property...there is no profit to the builder rather it is a repair of a curable functional obsolescence.

Especially in this market...anyone who has already lost 2 or 3 homes by being outbid will jump on it.