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Date Of Sale/time Adjustments - Actual Case

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Tumbuktu

Sophomore Member
Joined
May 23, 2013
Professional Status
Certified Residential Appraiser
State
Texas
OA Excerpts.JPG


'Attached Image' has some relevant excerpts from 'Original Appraisal'. The Effective Date is in 'Last Week of September 2016'

Some Additional Information:

  1. 13% increase of general one mile radius is correct.
  2. Subject is single story and all the comps are single story.
  3. The actual age-range of subject and comps is 20 - 30 years
  4. Other adjustments (GLA, Bath etc) are very minor to impact as significantly as the 'Date of Sale/Time' Adjustments
  5. There is a new development within half mile radius of the subject, with new properties starting $450,000 and above


My Comments:

  • Comps 1 and 2 are good comps and in the same subdivision as subject.
  • Comp 3 is more than a mile, and as per OA, it has been used for its recentness; however there were more recent comps in the subdivision but two story with slightly higher GLA (adjusted sale price would have been less than that yielded by Comp 3)
  • OA has made adjustments to Comp 1 and Comp 2, with respect to the 'Sold Date' and not 'Contract Date'. (Using contract date would actually further increase the adjusted sale price)
  • If the days are counted for Comp 3, as the OA has done for Comps 1 and 2, both the 'Sold Date' and 'Contract Date' have a difference of more than 90 days with the effective date. (Effective- Sold Date difference 95 days and Effective- Contract Date difference 110 days), but yet no adjustment was made for Comp 3. (Even this would increase the adjusted value)
I think the Sale/Time Adjustments are excessive, as there are other factors for general market increase (new properties) that are not applicable to the subject

As always, feedback and suggestions would be appreciated.
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
I usually don't make a big issue over adjustments as long as the OA has some explanation and rationale.
 

Mr Rex

Elite Member
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Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
13% increase over how long?
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
Is there any information available about days on market, sp/lp ratios, number of active listings and listing prices? How many properties sold within the neighborhood i.e. number of months inventory?
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Are you reviewing the appraisal?

If so, then develop your own appreciation estimate (which will translate into a time adjustment. As as Howard Advised above, base it on a number of factors. If the OP based the adjustment all on the fact that comp 3 is a more recent sale by a couple of months that';s a bit scary....as any one price can be higher for any number of reasons (is the location a mile out superior?).

Appreciation rates are tricky because rarely are markets so consistent that all properties in an area appreciate at the same rate and month by month (let alone daily)...usually there is a bust of appreciation following an interest rate drop, then prices may stabilize for a few months , then rise again if inventory shrinks etc.

I always look at listings and pendings and inventory to put the past recent activity into context.
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
I would be more interested to see what type of neighborhood comp. 3 is located in. Looks like a location adjustment needed to be made to comp. 3 and not a time adjustment to comps. 1 & 2.
 

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
I would be bugged that he adjusts at $250 increments on a $360k home

...and looks like he adjusted to a $1 on comp 2. Adjusted price $358,877!!!

I always adjust down to the penny :alcoholic:
 

bnmappraisal

Elite Member
Gold Supporting Member
Joined
Nov 9, 2011
Professional Status
Certified Residential Appraiser
State
Florida
and as per OA, it has been used for its recentness
(my bold) I'm not an English major, but is this even a word????

To me, I agree with RSW. Based on the info provided, it seems a location adjustment may be more in line rather than a time adjustment.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Well within the statistical noise... Reminds me of the boom days when people were claiming 10% PER MONTH and no end in sight...sure...

However, locally land prices rose in 3 years from about $3,000 to $5,000/acre for ag land here. Makes no sense but seems uniform over the 2 states I work. There were virtually no sales between $3,200 and $4,500/acre. It seems to have gone from one to the other over winter 14/15 with almost no sales until March. This year similar with jumps to $5,000 or more, including the 40 acres next to me which sold for $5,250/acre. 75% of my bare land sales were from March to the end of May. Have very few sales of agri land since. Closer to Bentonville, I am seeing land that was on the market for years at $5,000 an acre, jacked up to $10,000 an acre and sold. One parcel was $22,000/acre and was 35 acres. The old house on it is junk. I appraised it for the estate a few years ago. Languished on the market until the buyer snapped it up in a 1031 exchange for a $850,000 tract he owned elsewhere.
 
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