Ever been asked for the % of weight for each comp?

[New Orleans Guy]

I have been asked to state the exact percentage of weight given for the comps in my report. This is all part of an appeal where the borrower wants a higher value and unfortunately I have higher value comps in the report that were needed for bracketing, etc. and they did not match the subject as well as some others. The first "Appeal" asked why I appraised the subject on the low end of the comps. I explained that an appraisal is more than just averaging numbers but it is an OPINION of value. I am getting sick of having to do extra work every time some schmuck wants a higher number to make his schemes and dreams come true. I have thought of reporting these types of appeals as coersion to the state boards. Then I realized they are only there to punish me and to protect the lenders from bad appraisers so decided not to blackball myself out of work for nothing.

Has anyone ever been asked for percentage of weight given on a comp by comp basis? How could you even answer that truthfully? I am at a loss of what to even say. I have to answer something or I won't be paid since the appraisal is never really over until the lenders/AMC's are satisfied. Scope of work could potentially be the rest of your life for some clients.

rant over....

 

[Randolph Kinney]

I have been asked to state the exact percentage of weight given for the comps in my report. This is all part of an appeal where the borrower wants a higher value and unfortunately I have higher value comps in the report that were needed for bracketing, etc. and they did not match the subject as well as some others. The first "Appeal" asked why I appraised the subject on the low end of the comps. I explained that an appraisal is more than just averaging numbers but it is an OPINION of value. I am getting sick of having to do extra work every time some schmuck wants a higher number to make his schemes and dreams come true. I have thought of reporting these types of appeals as coersion to the state boards. Then I realized they are only there to punish me and to protect the lenders from bad appraisers so decided not to blackball myself out of work for nothing.

Has anyone ever been asked for percentage of weight given on a comp by comp basis? How could you even answer that truthfully? I am at a loss of what to even say. I have to answer something or I won't be paid since the appraisal is never really over until the lenders/AMC's are satisfied. Scope of work could potentially be the rest of your life for some clients.

rant over....

In my reconciliation section, I put a statement like: Comps 1 & 2 were given more consideration in the final opinion of value while comps 3 & 4 were given less consideration. Comps 5 & 6 (listings and pendings) were supportive of the opinion of value.

Now, if they demand an absolute percentage weight, that in not a criteria for reconciliation since there can be no absolute determination. Like reconciling the direct sales comparison approach versus the cost and income approach; the other two approaches are supportive on a relative basis, not absolute weighting.

 

[J Grant]

Disheartening to hear more of this...we are not asked to justify to precision when a borrower is "happy" with value, only when they are unhappy.

Rant over, I do what R suggest above, I state comps 1 and 2 are given most weighted consideration because they are more recent and equivalent to subect, etc, but I don't give an exact % of weight. That implies a level of precision each comp deserves that is mechanical, though like anything else it can be done.

As an appraiser, we can place 90% weight on one comp and 5% on the other two, because it is our judgement.

Look carefully at your comps. If you had a range of both adjusted and unadjusted prices, and came in at lower end of value, then you had a reason. In your mind, which comps did you weight more, and why? Comp 1 because it is most recent and the same model match as subject with same view? (for example). And less weight to sale 4, the highest price sale because it was larger, used only to bracket sf, because it is also much newer, outside the subdivision and needed a location adjustment?

Determine which comps and why, then, assign each comp a % of weight. There are 2 ways to do this...since you already have a final value #, the weighted percentage of each comp could be a math forumla to reach the final value. Alamode does this mechancially but that means arriving at the value alamode suggests, which is absurd because then we are letting software value a property and software can not form an opinion. (though the recomendation based on math precentage of each comp is interesting). Since you already have a $ value, to use the weights mathmatically, you'll have to back into it by putting more % weight on the comps that support your value.

The other way to do it is describe a % of weight you gave each comp, andwhy, and then explain that the weight was not places for a caluclated $ value, but rather as the amount of weighted consideration as contributory value, not a precise % for a math forumla. Explain that you places more or less weight on certain comps as value indicators because of similarity to subject or needing fewer adjustments, and, that market conditions shape your judgement in assigning weight and opining at the high , low, or mid range of value. Then go on to describe subject area market trends, such as listing days on market, if prices are declining or stable or only rising for certain properties, if there are short sales present, etc. The reasons you opined on the lower end that you did. They can not argue with market data. If there is an over supply of inventory, there is.

Whether high, low, or mid range of value I descrbe conditions so the value opinion makes sense.

Good luck and keep searching for more clients!

 

[RSW]

Disheartening to hear more of this...we are not asked to justify to precision when a borrower is "happy" with value, only when they are unhappy.

Rant over, I do what R suggest above, I state comps 1 and 2 are given most weighted consideration because they are more recent and equivalent to subect, etc, but I don't give an exact % of weight. That implies a level of precision each comp deserves that is mechanical, though like anything else it can be done.

As an appraiser, we can place 90% weight on one comp and 5% on the other two, because it is our judgement.

Look carefully at your comps. If you had a range of both adjusted and unadjusted prices, and came in at lower end of value, then you had a reason. In your mind, which comps did you weight more, and why? Comp 1 because it is most recent and the same model match as subject with same view? (for example). And less weight to sale 4, the highest price sale because it was larger, used only to bracket sf, because it is also much newer, outside the subdivision and needed a location adjustment?

Determine which comps and why, then, assign each comp a % of weight. There are 2 ways to do this...since you already have a final value #, the weighted percentage of each comp could be a math forumla to reach the final value. Alamode does this mechancially but that means arriving at the value alamode suggests, which is absurd because then we are letting software value a property and software can not form an opinion. (though the recomendation based on math precentage of each comp is interesting). Since you already have a $ value, to use the weights mathmatically, you'll have to back into it by putting more % weight on the comps that support your value.

The other way to do it is describe a % of weight you gave each comp, andwhy, and then explain that the weight was not places for a caluclated $ value, but rather as the amount of weighted consideration as contributory value, not a precise % for a math forumla. Explain that you places more or less weight on certain comps as value indicators because of similarity to subject or needing fewer adjustments, and, that market conditions shape your judgement in assigning weight and opining at the high , low, or mid range of value. Then go on to describe subject area market trends, such as listing days on market, if prices are declining or stable or only rising for certain properties, if there are short sales present, etc. The reasons you opined on the lower end that you did. They can not argue with market data. If there is an over supply of inventory, there is.

Whether high, low, or mid range of value I descrbe conditions so the value opinion makes sense.

Good luck and keep searching for more clients!

You must be a much better appraiser than I am. There is no way I can give an exact % of weight to a comp.. I, like other posts will state I have given more weight to a sale or sales. But, there is no way I can state that I give 60%, 70% or 80%, etc. to a comp.. There is no way for me to prove a statement like that.

 

[J Grant]

Did you read my post? I don't do this on a regular basis. I said, I state that I weight one comp more than another, but I don't give a precise %. The below, in blue, is the first part of my post. It is even in your quote. I am pretty tired of people scanning a post, not reading it, and jumping to a conclusion that they criticize.

Rant over, I do what R suggest above, I state comps 1 and 2 are given most weighted consideration because they are more recent and equivalent to subect, etc, but I don't give an exact % of weight. That implies a level of precision each comp deserves that is mechanical, though like anything else it can be done.

In the latter part of my post, I did advise the OP how to do it, (assign an exact % amount) in case he wants to in his situation.

I have seen appraisers do the math weighing give 30% etc. In essence, they prove it because they said so. Though it looks more mathmatically precise, it is still traced back to appraiser's judgement...comp one is weighted 30% because__________________(fill in the explanation)

 

[DJBanas]

Did you read my post? I don't do this on a regular basis. I said, I state that I weight one comp more than another, but I don't give a precise %. The below, in blue, is the first part of my post. It is even in your quote. I am pretty tired of people scanning a post, not reading it, and jumping to a conclusion that they criticize.

J: Grab another cup of coffee. :new_all_coholic:

I actually did a precise weighing on a report 6 weeks ago. Comp 1 - 100%, comps 2-4 - 0%. Why? Comp 1 was the attached unit to the subject, a twin style home. Closed 4 days before I inspected the subject. As exact match as you can find. The AMC (1st order for them) said you can't do this you need to analyze and weigh each. I said I did. I had supporting statements on each comp and why I did/did not value them. They begrudgingly accepted by report. Got the check in the mail last week and put them on my "do not use" list.

 

[J Grant]

Coffee in hand...

I personally would not be comfortable giving 100% to one comp, unless it was a very unique situation. If I have 2 or 3 other sales, they are comps because they are comparable in some way, which would imply that at least some minimal reliance was made on them...

I do not specify a numerical % of weight for the comps. I say I weighted comp X mosre, or relied on comp 1 and 2 the most, Or comps 2 and 3 wer the most reliable value indicators because ___________(explanation)

If we put a precise % amount weight on comps, it seems mathmatically superior, but actually could end up being another trap ...why did the appraiser place 70% weight on comp one and 30% on comp two, they could ask. As you said, some clients belong on the do not use list....

 

[DJBanas]

Yeah, I agree. This was a unique situation. Twin style not common in the market. The other 3 comps had net adjustments between 12-17% and gross above 20%. Only timw in 9 years I have done this but thought it was supportable.

 

[New Orleans Guy]

This is what I gave them. It is 2 paragraphs that repeat each other slightly because I had to repond twice, the second time with percentages.

UNDERWRITER REQUEST: My reconciliation was based on the best matched pairs to the subject and not an averaging of values. The sales that were given the most weight were 1, 2 and 3. Comparable #3 is on Garden Rd. on a much larger lot and was not as similar in construction style as comparable #1. Comparable #4 was added to bracket the subject's GLA and was not given very much weight in the reconciliation. The subject is most similar to comparable #1 vs. the other sales and listings.

Comparable weight was not exactly calculated for my reconciliation of value since comparable adjustments cannot be made for every exact difference between the subject and the comparable sales and listings. My approx. estimated weight would be comp #1 75%, comp #2 10%, comp #3 10%, and comp #4 5%. Appraisal is not an exact science and value reconciliation is only based partially on mathematical adjustments made to comparables, and the appraisers opinion based on experience in the specific market areas.

 

[TRESinc]

Comparable #4 was added to bracket the subject's GLA and was not given very much weight in the reconciliation.

$1 says they come back with something about this statement, something like "why did you put this comp in to bracket the GLA? does that mean the other comps, which did not bracket the GLA, were not good choices?"