• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

First Residential Appraisal In 10 Years

Status
Not open for further replies.

Bert Craytor

Thread Starter
Senior Member
Gold Supporting Member
Joined
Jun 27, 2017
Professional Status
Certified General Appraiser
State
California
For those who are getting back into appraisal to earn some extra income in retirement (I am now 71), I just finished my first residential appraisal since when I quit back in 2008. It was a retrospective estate appraisal of an average home in El Granada, CA. I originally estimated two weeks to get it done (as I have other work as well and needed to do more work on setting up the infrastructure), but got it extended to three weeks. It was 70 pages, not counting all the attachments, and even then, I left out things I would have preferred to put in.

It turned out I was rusty on a few items. Of course, what you are rusty on, you’ve forgotten, so you don’t think you’re rusty. But it was relatively minor stuff.

Importantly, being able to go in and do exact (per ANSI) measurements of the exterior, as well as fairly exact and detailed measurements of the interior was still there. I now use Chief Architect’s Home Designer Pro, instead of the Premier package. But it's the same thing, - when it comes to the kinds of floor plans I do.

I still use MARS just in the way I presented it at the 2006 Salford Data Mining Conference (http://docs.salford-systems.com/BertCraytor.pdf). However, I use the latest SPM 8.2 version, which has some new features for automation and controlling the generation of the model. In particular, I like the ability to specify a variable as “non-transforming”. I did that with “age”, in order to make it a linear function, which people prefer; but also, there is a problem in El Granada, in that newer homes, less than 20 years old, have increasingly more upgrades and features. MARS, if not otherwise directed will break the age function at 20 years (inserting what is known as a “knot”) and throw in the contribution of all these upgrades to age. That messes up the 0.0 – 10.0 scoring of the subjective CQA (Condition-Quality-Appeal) variable. Most of that is kicked out of the “age” contribution by specifying it as non-transforming. The residual fairly accurately values your comps. They all have a sale price of course, and the difference between the sale price and the initial model predicted sale price, the residual, fairly accurately serves as a measure of the CQA for a comparable. The appraiser has to score the subject himself, percentage of homes in worse or better condition, quality and appeal. The human mind is very good at that sort of thing, we can look at a number of things like houses and pretty easily rank them from least to most desirable. I actually find this method is fairly accurate – especially if you can account for 80% of the value through objective quantifiable values like GLA, Lot Size, Age, Bedrooms, Bathrooms and so on. If you are off by 10% in estimating the remaining 20%, that is only a 2% error. You do need a good regression program to get that R2 of 0.80 or something close. But this is the future.

What I also noticed, is that valuing comparables in this area is becoming more complex, i.e. in non-homogenous areas like El Granada. It is absolute murder. Anyone who tells you different is talking BS. There are so many collinear effects, that you simple cannot compare homes feature by feature. San Mateo County is now the highest priced county in California. It’s recovery in home prices since 2007 is astounding. … Another story. Anyway, $700 is my minimum price for doing a residential appraisal in such an area. It should probably be $1000. We’ll see. And of course I don’t do Fannie Mae appraisals, as I can’t deal with the BS and constraints to valuation - or the crazy low pay.
 

JTip

Elite Member
Joined
Oct 12, 2004
Professional Status
Certified Residential Appraiser
State
Pennsylvania
Generals doing residential work always gives me a giggle.

Comparing a 20 yo subject to a 25 yo comparable. You break out the calculus excel spreadsheet, apply retrospective flux capacitor settings to generate a variable and apply to the 70 page word doc.

I simply put '0' in the grid because the 'market' sees no difference between the two.

And measuring....I was in a general class last year and surveyed how many measure the subject, let alone actually set foot on the property. I'm being generous, but it was 1 out of 10 that actually left the office. Inspecting the comps? Pfft....goose egg...

'A' for your effort.
 

Skeletor

Sophomore Member
Joined
Jun 29, 2018
Professional Status
General Public
State
Texas
Yeah sorry Bert but I have to agree with JTip. There's an old engineering term...Keep it simple stupid. If you are appraising an unsophisticated residential property in an unsophisticated market, chances are your buyers and sellers are unsophisticated as well. So stop wasting your valuable time creating a sophisticated appraisal model that, in the end, likely won't be worth the paper that pdf is printed on.

Also, do not make adjustments simply for the sake of making adjustments. If you can extract a clear and definitive market reaction toward the change in some variable, e.g., land size is an excellent example or new construction vs homes in need of updating, change in GLA, etc., then make the adjustment.

Be very careful with age adjustments. I would first look at it through the prism of marketable condition and not necessarily age. For example, you could have an extensively updated/renovated 1970s home that is selling in the same price range as a similarly-sized home in the same neighborhood but built in the 2000s.

Always ask yourself the question, will my assignment results hold up in a court of law? All the best to you, sir.
 
Last edited:

miktay

Senior Member
Joined
Jul 3, 2007
Professional Status
Certified Residential Appraiser
State
Texas
Can I hire you to appraise my home?
 

TRESinc

Elite Member
Joined
Dec 1, 2011
Professional Status
Licensed Appraiser
State
Ohio
why did you measure the inside?
why to double check the exterior measurements my dear watson. every appraiser does that.

wow, can't believe i typed that with a straight face!


or maybe it was just to chest thump a little and let everyone else know what software he uses so he seems cooler than the rest of us...


Can I hire you to appraise my home?
if an appraiser showed up at my house and said he had not performed a residential appraisal in 10 years i would politely thank him and close the door.
 

Pittsburgh Pete

Elite Member
Joined
May 6, 2008
Professional Status
Certified General Appraiser
State
Pennsylvania
Generals doing residential work always gives me a giggle.

Comparing a 20 yo subject to a 25 yo comparable. You break out the calculus excel spreadsheet, apply retrospective flux capacitor settings to generate a variable and apply to the 70 page word doc.

I simply put '0' in the grid because the 'market' sees no difference between the two.

And measuring....I was in a general class last year and surveyed how many measure the subject, let alone actually set foot on the property. I'm being generous, but it was 1 out of 10 that actually left the office. Inspecting the comps? Pfft....goose egg...

'A' for your effort.
I get a giggle of residential folks thinking there is something special about residential appraising. Concepts and theory are the same but with the wealth of sales activity, it is infinitely easier.
 

NachoPerito

Senior Member
Joined
Jul 25, 2012
Professional Status
Certified General Appraiser
State
Washington
Bert, residential appraisals doesn't sound like a financially beneficial thing for you. You are producing a product that isn't desired in the marketplace other than rare occasions.
 

Carlos Danger

Junior Member
Joined
Jul 25, 2015
Professional Status
Certified General Appraiser
State
New Jersey
Could you post one of your sketches?
 

Bert Craytor

Thread Starter
Senior Member
Gold Supporting Member
Joined
Jun 27, 2017
Professional Status
Certified General Appraiser
State
California
Generals doing residential work always gives me a giggle.

Comparing a 20 yo subject to a 25 yo comparable. You break out the calculus excel spreadsheet, apply retrospective flux capacitor settings to generate a variable and apply to the 70 page word doc.

I simply put '0' in the grid because the 'market' sees no difference between the two.

And measuring....I was in a general class last year and surveyed how many measure the subject, let alone actually set foot on the property. I'm being generous, but it was 1 out of 10 that actually left the office. Inspecting the comps? Pfft....goose egg...

'A' for your effort.
Actually, I'm an SRA and an expert on residential appraisal. I'd bet anything I could cut your's to pieces if you came to this area. Of course even in the worst environments, you can be lucky and get 2 or three close comps that make the job easier. In this particular market, we have a number of issues that are major. $75,000 for a water connection to county water, private water wells grandfathered in, unincorporated town, ....,
And, homes range in age back to the early 1900s. The whole town was originally designed by a famous architect, it has a history. Unlike one of your crazy unfounded unknowledgeable statements, the market here is actually quite sophisticated and El Granada is a bit of a haven for software engineers.

Where does that leave you? I have to "Quora block" you now as nonsense. You are simply not an appraiser in my book. - But, giggle, Fannie Mae would hire you, no sweat.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks