Mike Garrett RAA
Elite Member
- Joined
- Jan 14, 2002
- Professional Status
- Certified Residential Appraiser
- State
- Colorado
I can't say my method is good appraisal practice but it has served me well over 25+ years. Realize, of course, we have a very good MLS and excellent public records. Our assessor is great.
When I receive an assignment the first part of the analysis is to look up the public record. I get information on the subject property including sketch and map. Next I look in MLS to see if it was listed (records go back about 10 years). Once I have the old or current MLS listing I print it out and it goes into a legal sized file folder. The public record is stapled on the left side and and the MLS on the right. This is convenient when preparing the report as I can then compare the data easily and it sits nicely on my copy holder.
The next step is to decide what I will be using for my market search. Sometimes it is the subdivision or sometimes a one square mile grid. Our MLS now allows us to pull up a map and draw a square or rectangle which will then show all sales, listings, etc with in that box. Really neat feature, especially when there are several subdivisions within a neighborhood. Another trick my brother taught me was to search by grade school as this is a feature that indicates homogeneity of an area.
Once I make that decision I then do several stat searches to determine the price range. On the first one the only parameters entered are the grid (subdivision, neighborhood, square mile, etc.) and date. I prefer to use one year rather than six months so I won't miss a really good sale that might be slightly more than 6 months old and it also is more representative of the market than a six month search. This gives me the numbers for page 1 of the URAR. Sometimes I will run a second search if there are obvious anomalies like something well above or below the norms. It is common to eliminate the extremes.
My next search involves searching the same area for style specific properties, ie. comparing ranchers to ranchers or two story to two story. This is then used on page 2 at the top for COMPARABLE PROPERTIES. The numbers will be somewhat different than on page 1. A copy of these market analysis pages are included in my work file.
From this search I then try to pick the four MOST COMPARABLE current sales for use in the report. These MLS sheets are printed out and go into the file folder. I also print out the public record for these sales as my second form of sales verification. I then create a map which shows the subject and the comparables and this goes on the front of the folder so I don't have to fumble around look for address and locations while driving. The map is printed from the MLS and also includes the addresses, sales price, and location. The final step is to copy the public record sketch onto the back of my inspection form. Now I am ready for the appointment.
You will notice I never mentioned price as a criteria. Sometimes I will take more comps but usually have it narrowed down to four by the time I am ready to inspect the property. Once I have seen the subject I might choose to trend to either the higher end or lower end of the value range depending on what I find during my inspection of the subject and the comparables. If there is limited or no data on the subject I will have all of my research in the file and can pick comps after inspecting the subject. Good research in advance of the appointment is the key to efficient appraising. My set up time, including comp search, usually takes me about an hour but could be much longer for more rural or unique properties.
Another thing that has really helped me is limiting my practice to residential properties in just two counties. I honestly believe I know my market well. I also like to limit the value to less than $1,000,000, not because I am not qualified, but rather to keep my liability below the policy limits of my E & O coverage.
Two statements have also served me well over these years...."it is what it is" and "you can't make chicken soup out of chicken poop". Appraising is an art not a science. Proper preparation is essential and that includes picking and choosing the properties you will appraise, knowing your market, and researching that market in a manner or method that is consistent and makes common sense.
I truly wish you all well.
When I receive an assignment the first part of the analysis is to look up the public record. I get information on the subject property including sketch and map. Next I look in MLS to see if it was listed (records go back about 10 years). Once I have the old or current MLS listing I print it out and it goes into a legal sized file folder. The public record is stapled on the left side and and the MLS on the right. This is convenient when preparing the report as I can then compare the data easily and it sits nicely on my copy holder.
The next step is to decide what I will be using for my market search. Sometimes it is the subdivision or sometimes a one square mile grid. Our MLS now allows us to pull up a map and draw a square or rectangle which will then show all sales, listings, etc with in that box. Really neat feature, especially when there are several subdivisions within a neighborhood. Another trick my brother taught me was to search by grade school as this is a feature that indicates homogeneity of an area.
Once I make that decision I then do several stat searches to determine the price range. On the first one the only parameters entered are the grid (subdivision, neighborhood, square mile, etc.) and date. I prefer to use one year rather than six months so I won't miss a really good sale that might be slightly more than 6 months old and it also is more representative of the market than a six month search. This gives me the numbers for page 1 of the URAR. Sometimes I will run a second search if there are obvious anomalies like something well above or below the norms. It is common to eliminate the extremes.
My next search involves searching the same area for style specific properties, ie. comparing ranchers to ranchers or two story to two story. This is then used on page 2 at the top for COMPARABLE PROPERTIES. The numbers will be somewhat different than on page 1. A copy of these market analysis pages are included in my work file.
From this search I then try to pick the four MOST COMPARABLE current sales for use in the report. These MLS sheets are printed out and go into the file folder. I also print out the public record for these sales as my second form of sales verification. I then create a map which shows the subject and the comparables and this goes on the front of the folder so I don't have to fumble around look for address and locations while driving. The map is printed from the MLS and also includes the addresses, sales price, and location. The final step is to copy the public record sketch onto the back of my inspection form. Now I am ready for the appointment.
You will notice I never mentioned price as a criteria. Sometimes I will take more comps but usually have it narrowed down to four by the time I am ready to inspect the property. Once I have seen the subject I might choose to trend to either the higher end or lower end of the value range depending on what I find during my inspection of the subject and the comparables. If there is limited or no data on the subject I will have all of my research in the file and can pick comps after inspecting the subject. Good research in advance of the appointment is the key to efficient appraising. My set up time, including comp search, usually takes me about an hour but could be much longer for more rural or unique properties.
Another thing that has really helped me is limiting my practice to residential properties in just two counties. I honestly believe I know my market well. I also like to limit the value to less than $1,000,000, not because I am not qualified, but rather to keep my liability below the policy limits of my E & O coverage.
Two statements have also served me well over these years...."it is what it is" and "you can't make chicken soup out of chicken poop". Appraising is an art not a science. Proper preparation is essential and that includes picking and choosing the properties you will appraise, knowing your market, and researching that market in a manner or method that is consistent and makes common sense.
I truly wish you all well.