Formula - to Adjust GLA ?

[Mr Rex]

I'll quote that in my Workfile.

 

[CANative]

I'll quote that in my Workfile.

There ya go. Don't forget to acknowledge the professional assistance.

 

[Metamorphic]

Ok, you guys will enjoy this
I'm working on a review.

Comp 1 SP $90k Adjusted to $75.5k
Comp 2 SP $90k Adjusted to $38.5k
Comp 3 SP $95k Adjusted to $74.5k

Listings
Comp 4 Lst $100k Adjusted to $124.5k
Comp 5 Lst $94k Adjusted to $100.5k
Comp 6 Lst $134k Adjusted to $88 k

According to what we'll loosely refer to as the "reconciliation"...."All comparables were considered in the final estimate of value. "

I'll let you guess what the OMV was.

Hint: It was not any 1 of the adjusted values above, nor any of the SPs, nor was it the average of either data set. It was, however, 3k less than the contract price coincidentally.

On the bigger picture, the range of value on the UNADJUSTED comps was $44k. Using some of the most impressive appraising chops I've ever seen, the appraiser was able to INCREASE!!!!! the range to $86k. What would the mortgage lending industry do without this kind of insightful analysis to aid them in their lending decision.

If there were anything resembling wise oversight of this industry this appraiser would get suspended back to middle school where she could work her way back up to the high school diploma she needs to get accepted to the junior college where she can take an introduction to appraising course, so that maybe she could someday apply for a trainee license.

 

[Michigan CG]

Ok, you guys will enjoy this
I'm working on a review.

Comp 1 SP $90k Adjusted to $75.5k
Comp 2 SP $90k Adjusted to $38.5k
Comp 3 SP $95k Adjusted to $74.5k

Listings
Comp 4 Lst $100k Adjusted to $124.5k
Comp 5 Lst $94k Adjusted to $100.5k
Comp 6 Lst $134k Adjusted to $88 k

According to what we'll loosely refer to as the "reconciliation"...."All comparables were considered in the final estimate of value. "

I'll let you guess what the OMV was.

Hint: It was not any 1 of the adjusted values above, nor any of the SPs, nor was it the average of either data set. It was, however, 3k less than the contract price coincidentally.

On the bigger picture, the range of value on the UNADJUSTED comps was $44k. Using some of the most impressive appraising chops I've ever seen, the appraiser was able to INCREASE!!!!! the range to $86k. What would the mortgage lending industry do without this kind of insightful analysis to aid them in their lending decision.

If there were anything resembling wise oversight of this industry this appraiser would get suspended back to middle school where she could work her way back up to the high school diploma she needs to get accepted to the junior college where she can take an introduction to appraising course, so that maybe she could someday apply for a trainee license.

The AMC got their money's worth. Let me guess. The appraiser used "list" adjustments. The appraiser did not verify the sales with anyone. The appraiser stayed within one mile and 6 months of sale. The appraiser is a totally clueless idiot.

The "appraiser" did not understand that adjustments are based on market evidence and if you adjust and the range gets wider then they are obviously not performing due diligence.

What surprises me is that the "appraiser" actually had an opinion of value and I am guessing the reconciliation of value did not explain where that value came from.

What surprises me is that someone is actually stupid enough to order a review of this "appraisal". What a waste of money.

What AMC is dumb enough to employ this person? What "appraiser" is dumb enough to submit this report?

 

[Kevin Mc]

The AMC got their money's worth. Let me guess. The appraiser used "list" adjustments. The appraiser did not verify the sales with anyone. The appraiser stayed within one mile and 6 months of sale. The appraiser is a totally clueless idiot.

Comp 2 SP $90k Adjusted to $38.5k


Ya think?

 

[Thern Newbell]

The AMC got their money's worth. Let me guess. The appraiser used "list" adjustments. The appraiser did not verify the sales with anyone. The appraiser stayed within one mile and 6 months of sale. The appraiser is a totally clueless idiot.

I had a reviewer do this on an appraisal I completed a couple of years ago, but replace the '6 month rule' with the '3 month rule,' and the 'comparables' provided by the appraiser were all distressed properties in major disrepair (subject was a completely renovated 60 year old home). He/she made sure that he/she stayed within a 1 or 2 mile radius of the subject, even though the subject was in a semi-rural location, but less than 1 mile away from the city limits of a large metropolitan area. All of the 'comparables' that were used by the reviewer were inside the city. The review was so ridiculous, I couldn't believe that this client even sent it to me (didn't send the entire report, just comments). Reeked of out of state reviewer or inexperienced reviewer boxed into following guidelines.

 

[Metamorphic]

The AMC got their money's worth. Let me guess. The appraiser used "list" adjustments. The appraiser did not verify the sales with anyone. The appraiser stayed within one mile and 6 months of sale. The appraiser is a totally clueless idiot.

The "appraiser" did not understand that adjustments are based on market evidence and if you adjust and the range gets wider then they are obviously not performing due diligence.

What surprises me is that the "appraiser" actually had an opinion of value and I am guessing the reconciliation of value did not explain where that value came from.

What surprises me is that someone is actually stupid enough to order a review of this "appraisal". What a waste of money.

What AMC is dumb enough to employ this person? What "appraiser" is dumb enough to submit this report?

Actually, the one thing I give them credit for is defining an appropriate market are. They went about 10 miles in either direction along a rural stretch of highway which is about exactly what I would have done. Went back over 6 months, (I searched back 1 year from from the date of valuation; found a few things that would work as comps but nothing manifestly superior). From a comp perspective this is actually a pretty easy one....you go back as long as you can justify and take the smallest 3 or 4 comps that appear. The other thing that makes this tricky is that the property is only about 5 years old, but its owner built partially finished with lots of shoddy work. Everything that's even close to its size is a 50+ year old shabby cabin some guy and his brother built after the war as a little summer place to get away from the heat in the valley. I'm inclined to cut the person A LOT of slack on the comparables front. But the least you can do in a bad situation is give a decent evaluation of the property, and try to make meaningful adjustments to those bad comps.

I gave you the entirety of the recollection above.

This is a Too Big to Fail Bank's AMC who's name implies real property is a good place to keep your guns and other valuables.

 

[Riick]

Thank You Thank You Thank You

I asked for it, & thanks, I have what I wanted.
If you want it too, download the attached spreadsheet.
The Spreadsheet was saved in Excel_95 format so most anyone with Excel or even MS Works should be able to use it.
If you have neither, then get Open Office FREE here ( LINK ), and install the "Calc" program; it will open & run this spreadsheet.

.

 

[Michigan CG]

Rick,

Nice little spreadsheet although are three comps enough? The last few reports I have completed are 6-8 comparables.

One note to make. To utilize the theory described in this thread one does not enter the sales price in your column D but rather the ADJUSTED sales prices. You make all other adjustments first before the GLA adjustment. Assuming you have made the correct adjustments the theory is that you now have matched pairs.

The adjusted prices are then put into the spreadsheet.

 

[Riick]

...... are three comps enough? The last few reports I have completed are 6-8 comparables..

Look at tabs on bottom, 4 different worksheets

• 3 sales,
• 4 sales,
• 5 sales,
• 6 sales

.