GLA Adjustments

[Rumrunner]

I have been around for 12 years and have a new client that is requiring that the calculations be shown in the report. How my GLA adjustment was obtained (sometimes its $25 others it's $50). I must have missed that class! How would you, the brain trust, answer this within a report??

 

[andrew81]

https://appraisersforum.com/forums/threads/how-to-calculate-GLA-adjustments.218519/

 

[Terrel L. Shields]

I use sensitivity analysis. I have a spreadsheet to do it. I can do paired sales on it too. I use 3 or 5 comps and do a dual sensitivity using effective age as a proxy for condition. I stick with homes of the same quality. This one was posted here several years ago by someone. You will have to unzip it as this site does not accept .xls files

You can copy and paste into a report as a picture in Excel

 

[residentialguy]

I have been around for 12 years and have a new client that is requiring that the calculations be shown in the report. How my GLA adjustment was obtained (sometimes its $25 others it's $50). I must have missed that class! How would you, the brain trust, answer this within a report??

So, you made GLA adjustments but can't explain how you got them. Do you pull all of your adjustments out thin air?

 

[Joyce Potts]

Condition differences are based on MLS photos and comments when available. Adjustments are based on a combination of AVT Multi-Linear Regression, Aggregate Comparisons, Matched Pairs, Sensitivity and/or Trend Analysis with no two approaches returning consistent results with adjustments deemed 'reasonable'. While not always 'strongly' independently supported, collectively, the adjustments serve to narrow the adjusted value range of the comparables in support of the subject's 'most probable selling price' commensurate with the definition of Market Value set forth herein. Regression is a better indicator of the final value 'range' and less supportive of the contribution of the independent variables. Any regression model is not weighted into the final value opinion, rather is merely a supplemental tool used to cross-check the reasonableness of the results of Sales Comparison Approach or other approaches to value.

 

[Rumrunner]

Guy, why are you always such a je>k? Yep, pulled those suckers right out of the air. BTW: As typical with your comments they were of no help. Must have been the class clown. You're always trolling for the next person to insult.

 

[Rumrunner]

Terrell & Joyce, Many thanks for your positive input. I sincerely appreciate your time! Respectfully,

 

[Artemis Fowl]

Just respond like you did in the original post. Sometimes it's $25...sometimes it's $50. Just explain why you picked which...you decided at some point which was more credible...explain the reasoning.

You initiated this thread. What you communicated is the basis for any response you may receive. It appears that you are finding this client request difficult to answer. If our responses lead you to an uncomfortable place perhaps a rethink of your process is in order.

If you've been around that long...and around here that long...you had to know this thread was going to generate some uncomfortable responses. To many the OP reads: I have been doing this for 12 years and don't know how to support a GLA adjustment. I guess this makes me a jerk too.

 

[Terrel L. Shields]

Estimating a SF adjustment can be done by simple reasoning and experience. Basically you are doing sensitivity analysis by working thru the number that fits best, I.e.- the lowest spread between adjusted numbers and you are doing it by changing the SF adjustment in the grid until you have it as tight as possible. But that isn't documentation. All a sensitivity analysis or paired sale does is document what you are doing in the first place. There is no need to slam someone for doing what even some of us old heads did for half our career before reviewers became myopic and couldn't see the obvious.

 

[glenn walker]

Terrill & Joyce are leading you down the right path - I also included a basic comment I use under my reconciliation often on page-3 of the 1004 or on an-addendum and then lay out what my adjustments were and how they were extracted. I know this will get criticized but when regression analysis became the craze a few years ago it became common for reviewers to ask how the adjustment was derived. Unfortunately I messed with regression for about a year and it did not seem to work very well on residential in my market area - So I went back to good old matched pairs and sensitivity analysis. There are some good classes out there and take a few when you get a chance. I included a comment I use below which gives a basic idea to the reader on the methods I employ to extract adjustments.

Adjustments:
The appraiser employs a market-based system that relies upon the results of matched pairs when available and a percentage-based system accompanied by sensitivity analysis to assure the amounts that are reconciled the market to the Subject property were neither greater or less than the market called for and would support.

Then lay out your adjustments so the reader knows what they are and most questions will be answered without needing further explanation but always try to never paint yourself in a corner and make adjustments that cannot be supported or defended because then it's the rabbit trail to appraiser hell.

Example:
* Gross Living Area (GLA) at $zzz per Sq.Ft. where variance is 100 Sq.Ft. or more.
* Bathrooms adjusted at $zzz or $zzz on half baths.
* Bedroom count was adsorbed into the gross living area adjustments * OR * adjusted at $zzz
* Physical conditions adjusted at $XX to $XX based on MLS interior photos, contact with agents and visual from street
* Locations at $zzz to $zzz based on traffic volumes, site elevations and positive or negative external factors.
* Views at $XX to $XX or included in location adjustments so duplicate adjustments not being made.
* Garages at $zzz per car space.
* Lot size variance considered where variance is over XXXX Sq.Ft. at $zzz per Sq.Ft. or acre.

* NOW I CAN SIT BACK AND GET ATTACKED LIKE THE POOR GUY WHO ASKED THE QUESTION ON POST #1