Question: How can they NOT be used as the basis for adjustments if they are the industry standards to define differences, including differences between subject and comps in the SCA?
How? Well, Market Value by its very nature is relative to the local market. It is based on all kinds of network relations in the local market. A market area may be all C2, all C3 or all C4 - or nearly so. If all the comps are C2, how in the f*** are you going to use that to support adjustments? GSE ratings very far from being sensitive enough to Quality or Condition, to do that.
So, that is why many appraisers consider these ratings simply required fodder for the GSEs. They make their adjustments in other ways.
As a sidenote, I and others criticize the GSE's and many Appraisal Leaders for being stupid. It is genuinely true, although as "The Basic Laws of Human Stupidity" Second Basic Law states:
"Although convinced that fraction σ of human beings are stupid and that they are so because of genetic traits, I am not a reactionary trying to reintroduce surreptitiously class or race discrimination. I firmly believe that stupidity is the indiscriminate privilege of all human groups and is uniformly distributed according to a constant proportion. This fact is scientifically expressed by the Second Basic Law, which states that:
The probability that a certain person be stupid is independent of any other characteristic of that person.
"In this regard, Nature seems indeed to have outdone herself. It is well known that Nature manages genetic traits, I am not a reactionary trying to reintroduce surreptitiously class or race discrimination. I firmly believe that stupidity is an indiscriminate privilege of all human groups and is uniformly distributed according to a constant proportion. This fact is scientifically expressed by the Second Basic Law, which states that The probability that a certain person be stupid is independent of any other characteristic of that person. In this regard, Nature seems indeed to have outdone herself. It is well known that Nature manages, rather mysteriously, to keep constant the relative frequency of certain natural phenomena. For instance, whether men proliferate at the North Pole or at the equator, whether the matching couples are developed or developing, whether they are black or white, the female to male ratio among the newly born is a constant, with a very slight prevalence of males. We do not know how Nature achieves this remarkable result but we know that in order to achieve it Nature must operate with large numbers. The most remarkable fact about the frequency of stupidity is that Nature succeeds in making this frequency equal to the probability σ quite independently from the size of the group. Thus one finds the same percentage of stupid people whether one is considering very large groups or dealing with very small ones. No other set of observable phenomena offers such striking proof of the powers of Nature. The evidence that education has nothing to do with the probability σ was provided by experiments carried out in a large number of universities all over the world. One may distinguish the composite population that constitutes a university in five major groups, namely the blue-collar workers, the white-collar employees, the students, the administrators, and the professors. Whenever I analyzed the blue-collar workers I found that the fraction σ of them were stupid. As σ’s value was higher than I expected (First Law), paying my tribute to fashion I thought at first that segregation, poverty, lack of education were to be blamed. But moving up the social ladder I found that the same ratio was prevalent among the white-collar employees and among the students. More impressive still were the results among the professors. Whether I considered a large university or a small college, a famous institution or an obscure one, I found that the same fraction σ of the professors were stupid. So bewildered was I by the results that I made a special point to extend my research to a specially selected group, to a real elite, the Nobel laureates. The result confirmed Nature’s supreme powers: σ fraction of the Nobel laureates were stupid. This idea was hard to accept and digest, but too many experimental results proved its fundamental veracity. The Second Basic Law is an iron law, and it does not admit exceptions. The Women’s Liberation Movement will support the Second Basic Law; as it shows that stupid individuals are proportionally as numerous among men as among women. The “developing” of the “Third World” will probably take solace in the Second Basic Law as they can find in it the proof that after all the developed are not so developed. Whether the Second Basic Law is liked or not, however, its implications are frightening: the law implies that whether you move in distinguished circles or you take refuge among the headhunters of Polynesia, whether you lock yourself in a monastery or decide to spend the rest of your life in the company of beautiful and lascivious women,
you always have to face the same percentage of stupid people—which percentage (in accordance with the First Law) will always surpass your expectations." [Cipolla, Carlo M.. The Basic Laws of Human Stupidity (pp. 16-18). Knopf Doubleday Publishing Group. Kindle Edition. ]
Most large organizations, instill mediocrity and stupidity in their employees and managers. Once employees feel absolutely safe in their jobs, they turn into morons.
Of course the best organizations keep EVERYONE running a race, destroying families in the process, leading to a childless world that dies away. No solution - except that.
