Differences in GLA and lot size

[Brian L. Stone]

I am an appraiser trainee in the Sacrameto area. I have done several appraisals but when it comes to adjustments for lot size and GLA I get differnet answers from different sources. One AR has told me that $25.00 per sq ft is the correct adjustment and I have had other AR's tell me they use $35.00 per sq. ft. Is there a standard amount I should be using? Also, One of my AR's tells me he does not make any lot size adjustment if the comparble is within 2000 sq ft of the the subject. I think he is wrong as lot size can have an effect on appraised value. Any input from exprienced appraisers would be very, very, helpful. Thank you. Brian L. Stone bstoneis@comcast.net.

 

[Smokey Bear]

Sounds like they're working off "the list". You should be determining these values using matched pairs analysis. Find model matchs, similar amenities, same neighborhood, similar sale date on different lot sizes. The difference in sales price will be what people will pay for the difference in lot size, providing everything else is equal. Same on GLA, find another house similar in every way but GLA and find out what the difference is.

 

[Bill_FL]

Brian,

There is just no really nice way to say this, but I will try.

There is no set adjustment for anything. If that were the case, why would they hire an appraiser? Adjustments made in the sales comparison approach are made based on market reactions to the element of comparison you are looking at. Does it make sense that GLA is adjusted the same for a low end, 900sf bungalow as it would be for a 10,000sf mansion? Does the market react the same in both market segments? Would it react the same for both houses with a 3 car garage? Of course not. There is no list of adjustments. Your job as an appraiser is not to fill out the form. Your job is to measure the market participant's reaction to those items and adjust accordingly. There may or may not be adjustments to certain items and there may or may not be adjustments to small differences. You have to analyze your market data and figure that out. That is why they are paying you.

 

[Mountain Man]

The market shows me what the adjustment should be on each appraisal... the SF is one of the last adjustments I make. ;-)

 

[Chris Colston]

Moved to the Newbie Section

Ask an Appraiser For members of the public to ask general appraisal questions. . Please keep in mind that answers are for general informational purposes only and are not official, and are answered through the generosity of forum members.

I am moving this from the Ask An Appraiser section, based on the notation above, to the Newbies section.

 

[Bruce Lennick]

Hi Brian

everything comes from the market, you need to analyze the diferences of each component and find their impact in the market. Good Luck

 

[Walter Kirk]

Brian,
You are the appraiser, you must decide what if any adjustments you will use. As others have stated all adjustments come from the market. You must analize the market and determine the adjustments for each appraisal.

Please don't fall into the trap of using a chart of adjustments developed by someone else. Of course you should consult other appraisers as well as brokers and others to determine the market's reaction to differing features but then you have to determine how you will use this information in forming your opinion of value. Do it yourself and you'll be a better appraiser.

 

[Brian L. Stone]

Thanks to all of you for your advice. As a newbie it has been a lot of help.

 

[Bill Baughn]

Mr. Stone,

If it is true that you are being provided with a list of adjustments from different AR's then my suggestion is to use the list as guidelines but nothing is written in stone. Adjustments vary from report to report. Some markets want GLA adjustments at $25, some at $35 and others at maybe $50. Tomorrow the market may change.

Same thing goes for lot size adjustments sometimes it matters and sometimes it doesn't. Once in a while you get a freak case where you can prove that a smaller lot is worth more than a larger lot...Logic says that this can't be true but math doesn't lie! If you get this situation, don't expect the lenders to accept your common logic. Simple minded people can't understand the oblivious...LOL

 

[Steve Owen]

Great job, Bill Potts.

*I didn't know you kne how to be so nice. :icon_smile: