Double Dipping

[Barry Lebow]

I am actually reviewing a review. Court matter, my task is to review the review that an appraiser did on an appraisal and in turn I must comment on the source, the actual appraisal.

One error that I see time and again, double dipping. We have a comparable sale that has 5 bedrooms while the subject has 4 but the age, location and the gfa are more or less the same, with the comparable sale being slightly larger. The appraiser did a negative $$ for the GFA but then also did a negative $$ for the extra bedroom. Unless I am the offspring of two first cousins, does not the two downward adjustments not contribute to a false result?

And how many times have we observed yes, there is another bedroom but two bedrooms are very narrow while the comparable or subject has one less bedroom but of superior size.

Does anyone actually look at the square footage of the rooms or just skim the MLS listing?

 

[Fernando]

Are you familiar with the homes in that area?
If so, you can see or not see what the appraiser is adjusting.

 

[Joyce Potts]

If you have his / her work file, you could determine if multiple adjustments for both GLA and bedroom count were supported by the market data. I'm not sure how you can simply make a general assumption without full context. That said, did the appraiser address the bedroom and GLA adjustments?

 

[Bob Ipock]

I am actually reviewing a review. Court matter, my task is to review the review that an appraiser did on an appraisal and in turn I must comment on the source, the actual appraisal.

One error that I see time and again, double dipping. We have a comparable sale that has 5 bedrooms while the subject has 4 but the age, location and the gfa are more or less the same, with the comparable sale being slightly larger. The appraiser did a negative $$ for the GFA but then also did a negative $$ for the extra bedroom. Unless I am the offspring of two first cousins, does not the two downward adjustments not contribute to a false result?

And how many times have we observed yes, there is another bedroom but two bedrooms are very narrow while the comparable or subject has one less bedroom but of superior size.

Does anyone actually look at the square footage of the rooms or just skim the MLS listing?

Someone who wants and needs a 5 bedroom house is not going to buy a 4 bedroom home. Set up an MLS search for 4 bedrooms and an identical search for 5 bedrooms. If the only difference is the extra bedroom that is somewhat similar to matched pairs.

 

[shrubberyvaluation]

I am actually reviewing a review. Court matter, my task is to review the review that an appraiser did on an appraisal and in turn I must comment on the source, the actual appraisal.

One error that I see time and again, double dipping. We have a comparable sale that has 5 bedrooms while the subject has 4 but the age, location and the gfa are more or less the same, with the comparable sale being slightly larger. The appraiser did a negative $$ for the GFA but then also did a negative $$ for the extra bedroom. Unless I am the offspring of two first cousins, does not the two downward adjustments not contribute to a false result?

And how many times have we observed yes, there is another bedroom but two bedrooms are very narrow while the comparable or subject has one less bedroom but of superior size.

Does anyone actually look at the square footage of the rooms or just skim the MLS listing?

I typically don't see differences between 4 to 5 bedrooms, but I don't know the market. It is not necessarily double dipping. It depends on the expectations of a typical buyer in the market area for that size home.

 

[shrubberyvaluation]

Someone who wants and needs a 5 bedroom house is not going to buy a 4 bedroom home. Set up an MLS search for 4 bedrooms and an identical search for 5 bedrooms. If the only difference is the extra bedroom that is somewhat similar to matched pairs.

They might. It really depends on functionality. Is there a den that a typical buyer could consider using? What about the basement finished areas? You can watch the TV shows of homebuyers talking about how they need all this room and this budget and then spend over their budget for a smaller house with less bedrooms. Does the typical buyer demand 5 bedrooms and no less?

 

[Terrel L. Shields]

I see a difference between 2 and 3 but never have been able to extract one for room counts above 3. And if you value that 4th bedroom by "paired sales" and you do a sensitivity analysis that does not factor that extra bedroom in, then the OP is correct. They are double dipping.

 

[shrubberyvaluation]

I see a difference between 2 and 3 but never have been able to extract one for room counts above 3. And if you value that 4th bedroom by "paired sales" and you do a sensitivity analysis that does not factor that extra bedroom in, then the OP is correct. They are double dipping.

Like always it depends. It also depends on the size of the dwelling. Some waterfront 1 level + basement properties will have the master on the main level and than 3 bedrooms below grade all with water views. Sometimes I see a difference between 2 and 3, sometimes I don't.

 

[Terrel L. Shields]

Sometimes I see a difference between 2 and 3, sometimes I don't.

The property managers tells me they do not get as much rents for 2 bedroom houses, regardless the 3 bedroom one may be just as large.

 

[The Bob]

I've done a number of studies on 4 vs 5. Used sales from same sub, same bath count, same garage and GLA +/- 10%. In almost every one there is no difference using median prices. In some cases the 4 BR's had slightly higher median prices. I attribute this to the fact that with similar GLA, the house with 4 BR's has slightly larger rooms. On top of that, families are smaller, so there is less demand for more bedrooms.