GLA Adjustments

[Surf Cat]

No. I'm just trying to figure out in a clear (SIMPLE!) concise manner if there is a way (read spreadsheet I can use) that will allow me to enter in certain data and out spits a "Per Foot" adjustment for GLA. May be "wishing" a bit here, but this is what I have come to think about this profession. In some instances, there are a number of ways one can do things vs. structured and universally accepted ways. Yet, they want us to be precise in our numbers. .....

Here is what I'm working with currently. Rural properties. Horses allowed.

How would you determine the GLA adjustment?

I'll preface this by stating I don't do a rural appraisals. With the way you have the adjustments now, comparing comps 2 and 3 or 1 and 3, you're over $200 a square foot difference in GLA to tighten things up.... which I don't think it is as those sales aren't truly pairs. That would mean, your time, site, bathrooms, garage and or workshops and barn adjustments are off.

Additionally, all your comps suck for the same reason in that the subject is only two bedrooms and all the comparables are three.... with more bathrooms to boot. Very unusual to have that large of a dwelling with only two bedrooms in my area. An underwriter out my way would want to see two bedroom comps.

I did a linear regression calculation on my HP 12C based on the cost per square foot at the top of the page right under the gross sales prices and square footage of each comp. In essence, a line cutting right through the three comparables in your grid. Based on that, the subject should be $222.55 a square foot or...$443,104.39.

I'm not saying that $443k is your value. There's other factors involved. But as you can see, it sits well in between all the gross sales prices.

I see that you're a trainee. Have your mentor help you on this one.

 

[OG80]

No line item adjustments for GLA indicates a problem. You have huge market condition adjustments.

LOL. I know that. That's what I'm on here trying to figure out the number per sq/ft. Once I get some intel on that I will put it in and re-upload to show it.

 

[OG80]

I'll preface this by stating I don't do a rural appraisals. With the way you have the adjustments now, comparing comps 2 and 3 or 1 and 3, you're over $200 a square foot difference in GLA to tighten things up.... which I don't think it is as those sales aren't truly pairs. That would mean, your time, site, bathrooms, garage and or workshops and barn adjustments are off.

Additionally, all your comps suck for the same reason in that the subject is only two bedrooms and all the comparables are three.... with more bathrooms to boot. Very unusual to have that large of a dwelling with only two bedrooms in my area. An underwriter out my way would want to see two bedroom comps.

I did a linear regression calculation on my HP 12C based on the cost per square foot at the top of the page right under the gross sales prices and square footage of each comp. In essence, a line cutting right through the three comparables in your grid. Based on that, the subject should be $222.55 a square foot or...$443,104.39.

I'm not saying that $443k is your value. There's other factors involved. But as you can see, it sits well in between all the gross sales prices.

I see that you're a trainee. Have your mentor help you on this one.

Appreciate that. BTW, went out 14 miles (if memory serves me correct) and not 1 Comp within 20% of Subject with 2 bedrooms. Sometimes, you just can't bracket something.

 

[Dublin ohio]

No. I'm just trying to figure out in a clear (SIMPLE!) concise manner if there is a way (read spreadsheet I can use) that will allow me to enter in certain data and out spits a "Per Foot" adjustment for GLA. May be "wishing" a bit here, but this is what I have come to think about this profession. In some instances, there are a number of ways one can do things vs. structured and universally accepted ways. Yet, they want us to be precise in our numbers. .....

Here is what I'm working with currently. Rural properties. Horses allowed.

How would you determine the GLA adjustment?

What market are you in where prices are increasing 36% annually. That seems somewhat unbelievable.

 

[Tim Hicks (Texas)]

Monthly market trends are less likely to be reliable in rural areas. There needs to be lots of data to have proper monthly market trend adjustments when your subject and comparable sales are sparce and less and less similar. First of all, your carport adjustment is the wrong direction. I would throw out the monthly market trend adjustments unless you have plenty of data to support those numbers. The market trend adjustments are skewing the adjusted prices in the wrong directions. Workshops and barns come in all shapes and sizes and I never assign a $50,000 workshop/barn adjustment. I usually base them on size and quality of workshop and barns. Example. (a 2000 sf metal workshop with concrete flooring and full electrical would probably be around $20 per foot adjust whereas a 2000 sf barn with dirt floors and no stalls would be closer to $10 per foot). But every market is different, it could be totally different in your market. Your comparable sales selection does not appear to be very similar. The smaller home on smaller acreage sells for more than the larger home on smaller acreage. This could be about location or construction quality or condition adjustments that need to be made. Also, it is not uncommon to use an entire county or multiple counties to find like/kind comparable sales. You need to stick to the most important physical aspects of your subject to choose comparable sales (age, GLA, lot size and construction quality). Then whittle down from there. There is always a two bedroom home sale somewhere that you can utilize. You may have to greatly exceed typical lender guidelines in lot size or GLA adjustments, but you can have 1-2 sales with only two bedrooms. Remember, typical guidelines are just guidelines.

Appraisers cannot get all wrapped up into all these regression, market trend or adjustment support programs on rural properties. The more oddball your property, the less likely they will be effective. Appraisers are not AVM programs and may have to rely on our actual appraisal skills and sensitivity analysis and just explain what you did on these difficult assignments.

I would go shopping for more similar sales 20-30-40 miles away regardless of county lines to find similar sales on a rural property.

 

[Surf Cat]

I would go shopping for more similar sales 20-30-40 miles away regardless of county lines to find similar sales on a rural property.

Agree.....also go 18, 24, even 36 months back in time to find comparables that are more similar to the subject. The story will start to unfold when you find these elusive sales....

 

[Fernando]

If appraisers stay with comps with similar gross area, the GLA adjustments would be less significant.
One of my pet peeves is appraisers using very different size homes from subject. They're not good comps.

 

[Zoe]

Monthly market trends are less likely to be reliable in rural areas. There needs to be lots of data to have proper monthly market trend adjustments when your subject and comparable sales are sparce and less and less similar. First of all, your carport adjustment is the wrong direction. I would throw out the monthly market trend adjustments unless you have plenty of data to support those numbers. The market trend adjustments are skewing the adjusted prices in the wrong directions. Workshops and barns come in all shapes and sizes and I never assign a $50,000 workshop/barn adjustment. I usually base them on size and quality of workshop and barns. Example. (a 2000 sf metal workshop with concrete flooring and full electrical would probably be around $20 per foot adjust whereas a 2000 sf barn with dirt floors and no stalls would be closer to $10 per foot). But every market is different, it could be totally different in your market. Your comparable sales selection does not appear to be very similar. The smaller home on smaller acreage sells for more than the larger home on smaller acreage. This could be about location or construction quality or condition adjustments that need to be made. Also, it is not uncommon to use an entire county or multiple counties to find like/kind comparable sales. You need to stick to the most important physical aspects of your subject to choose comparable sales (age, GLA, lot size and construction quality). Then whittle down from there. There is always a two bedroom home sale somewhere that you can utilize. You may have to greatly exceed typical lender guidelines in lot size or GLA adjustments, but you can have 1-2 sales with only two bedrooms. Remember, typical guidelines are just guidelines.

Appraisers cannot get all wrapped up into all these regression, market trend or adjustment support programs on rural properties. The more oddball your property, the less likely they will be effective. Appraisers are not AVM programs and may have to rely on our actual appraisal skills and sensitivity analysis and just explain what you did on these difficult assignments.

I would go shopping for more similar sales 20-30-40 miles away regardless of county lines to find similar sales on a rural property.

Yeah, I don't see how they came up with the huge market condition adjustments. But I do depreciated cost on many things you mentioned in sales comparison approach. Perfectly acceptable in sales comparison approach. At least you have something.

 

[Zoe]

With all due respect to the OP, rural appraisals are different from suburban or urban appraisals.

 

[Zoe]

What market are you in where prices are increasing 36% annually. That seems somewhat unbelievable.

News this morning said FED may cut rates due to weak housing market. Think about that.

The Federal reserve bank has probably some of best economist alive that look at all kinds of indicators.