GLA Adjustments

[Zoe]

Can't remember I ever got called out on my GLA adjustments.
It's called appraiser intuition based on art. Some have it many don't.

I knew you were the great Fernando. Costco should put you in Commerical.

 

[Zoe]

I have not heard of people adjusting for SF based on a % of the price. To be honest, this whole appraisal has so many problems that if I were an UW or reviewer, I would probably just ask for another appraisal to be done.

The sf adjustment seems to be around $190 per sf which is very high for that price range where the land comprises half f more of the value due to large sites. In your first posting of this grid, you had a mix of positive and negative market ondin atindutmens, now they are all negative. One barn/workshop is adjusted at 50k and another at 10k ( why? ) and so on.

IDK who your mentor is but are they spending enough time with you....get your other adjustments right and the $ per sf adjustment is easy to extract. Do a cost approach - if the cost to build is $200 a sf, then the depreciated cost might be X$ $ and the contributory value of sf might be half the cost to build as a starting point, you can change it as the report develops, of course, but at least it makes sense. Then there re all the other problem child adjustments that send the sale prices up and down further apart from each other - weird small garage adjustment, land adjustments that seem rote rather than a contributory value of acrage and weird comp 3 a 1.69 acre sale that sold higher than comp 1 with 7 plus acres for no appranat reason - and so on. Why did a much smaller lot sale sell for so much more than larger acre sales ? Why did Comp 1 with the biggest acreage sell for less? Find the reasons and adjust for them.

Yeah, don't submit this report to upgrade to licensed appraiser. Just act like you never did it.

Your sick. I can't complete the assignment. Don't send invoice.

 

[RCA]

Appraisers use these services to do Sales Grid adjustments, without understanding what they are doing. You can see that from the questions that come into this forum. They have no idea how these services calculate the adjustments. And believe me, even Zillow with its high-paid engineers, can get things wrong - probably because the engineers don't understand WTF is supposed to happen with adjustments. I betcha, in many cases, the time adjustments are screwed up, not so much perhaps taken in isolation from other features, but features have overlap, time overlaps with all other features, I would bet that at least from time to time they are indeed getting time adjustments messed up. I know this because I see multi-million-dollar homes that I appraised several years ago, with prices that take off into the outer space, which indicates mistakes are being made, big mistakes.

The appraiser must obtain statements from the services regarding the algorithms they are using and promise to be notified of any changes to these algorithms. Not just that they are using multi-linear regression, but also how they are utilizing the model provided by the statistical analysis tool to calculate the adjustments. They need the model and the code that performs the adjustments. You should be able to answer, as an appraiser, how the adjustments were calculated for a given comparable.

You know, you DO know, the whole system is screwed up. And the GSEs sit back and let it happen - Well, they clearly are not doing their job. They know it. And their excuse is? Reality? They don't need more than 5-10% accuracy, because it's not that important to them ---> "all in all." They have credit checks, they rely more directly on the purchaser's income than the property value. Sure, they do get screwed over at times, but they can take the loss; Well, as long as the taxpayer can rescue them if they get into deep ****. And so, that is the way it is.

It's a frigging mess. There is, in fact, no hope—except to replace the current appraisal system, lock, stock, and barrel.

But the world is changing. Times are going to get very, very hard; the economy may collapse in another 10 years or so.

 

[Tim Hicks (Texas)]

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.

So, you are saying a 1800 sf house on 1 acre is comparable to a 1800 sf home on 20 acres?

 

[Fernando]

So, you are saying a 1800 sf house on 1 acre is comparable to a 1800 sf home on 20 acres?

Fortunately in my area, I don't need to deal with 1 acre let alone 20 acres lot.
Most lots in SF are small about 2,500 sf. Imagine if I got a comp with smaller 1,200 sf. Not a good comp.
Suburbs usually less than 10,000 sf.

 

[OG80]

Okay, how did you do market condition adjustments? How did you get such huge market condition adjustments? You didn't even have a GLA adjustment in first grid you posted.

Suddenly we have huge GLA adjustments.

Duh, that's what I was asking about originally and working on. That's why I didn't have anything in it. The MKT is going down 16+% over 12 months. Here is the table. That's why.

 

[OG80]

I have not heard of people adjusting for SF based on a % of the price. To be honest, this whole appraisal has so many problems that if I were a UW or reviewer, I might ask for another appraisal - or have a lot of questions about this one.

The sf adjustment seems to be around $190 per sf, which is high for that price range, where the land comprises half or more of the value, due to large sites. In your first posting of this grid, you had a mix of positive and negative market ondin atindutmens, now they are all negative. The market is declining?
One barn/workshop is adjusted at 50k and another at 10k ( why? ) n.

IDK who your mentor is but are they spending enough time with you....

Get your other adjustments right and the $ per sf adjustment is easy to extract. Do a cost approach - if the cost to build is $200 a sf, then the depreciated cost might be X$ $ and the contributory value of sf might be half the cost to build as a starting point, you can change it as the report develops, of course, but at least it makes sense. Then there re all the other problem child adjustments that send the sale prices up and down further apart from each other - weird small garage adjustment, land adjustments that seem rote rather than a contributory value of acrage and weird comp 3 a 1.69 acre sale that sold higher than comp 1 with 7 plus acres for no appranat reason - and so on. Why did a much smaller lot sale sell for so much more than larger acre sales ? Why did Comp 1 with the biggest acreage sell for less? Find the reasons and adjust for them. If you do that, the prices may start to make sense as adjusted.

Let me respond to your comments please.
A % of GLA is common where I am from.
So, if sf adjustment is 'high' in your opinion, give me a % you feel would be better.
The market (went out further, etc) is declining. 16+%
If you look (know) barns (it's really for the Wkshop/Barn) then they can certainly be different. One has 3 bays, one has 1 I believe. One is newer. Barns/Wkshops are all different. You can't just say they are all the same $$$.
Cost To Build is $98/sf.
"weird small garage adjustment" - its for a carport.
Land adjustments are taken from sales 2.5 mile radius of subject. Can't get any better than that imo.
Sometimes, people have to sell and sometimes people get a great deal. It happens. I can't make it up. So, how would you adjust?
I just did a quick AVG of GLA's within 6 miles on 2+ acre lots and the Avg GLA is $257.92
There are a LOT of comments on here, but not a lot of solutions / help. Just saying it's easy to get on here and tell them how bad their doing and not offer anything that may prove to be helpful. Just sayn....

 

[J Grant]

Let me respond to your comments please.
A % of GLA is common where I am from.
So, if sf adjustment is 'high' in your opinion, give me a % you feel would be better.
The market (went out further, etc) is declining. 16+%
If you look (know) barns (it's really for the Wkshop/Barn) then they can certainly be different. One has 3 bays, one has 1 I believe. One is newer. Barns/Wkshops are all different. You can't just say they are all the same $$$.
Cost To Build is $98/sf.
"weird small garage adjustment" - its for a carport.
Land adjustments are taken from sales 2.5 mile radius of subject. Can't get any better than that imo.
Sometimes, people have to sell and sometimes people get a great deal. It happens. I can't make it up. So, how would you adjust?

There are a LOT of comments on here, but not a lot of solutions / help. Just saying it's easy to get on here and tell them how bad their doing and not offer anything that may prove to be helpful. Just sayn....

I did suggest things if you re read my posts - I appreciate your courage in coming on here and showing your work and training in;t easy.

If the market is declining, then you applied the appropriate downward adjustments. I still fail to see why you include sale 3, which sold for a higher price, having only 1.69 acres, then comps 1 and 2, which had 7 plus acres and 2.7 acres - there has to be a reason why comp 1 with the most acreage sold for the lowest price--- was it a desperate seller? Worse quality? Worse location ? -
Why is comp 1 on the smallest lot selling higher? Better lighting quality? Obviously, there are reasons for it, and putting them in and adjusting for them makes sense and brings teh adjusted range of the comps more into order that reflects the contribution of elements.
p s
Of course, we're working over the internet, and we don't know your area, so the suggestions are not as on point as if we were there, but basic principles apply.

Yes, barns and workshops can vary in size and quality, without your comments, we have no idea why one is adjusted at 50k and the other at 10k. Contributory value of extra acreage can sometimes be quite low and that might be the case in your area since applying larger lot size adjustments seems to trhgow things off.

I get the carpet adjustment I was referring t a two car garage adjustment of 16k - very specific and seems since you asked a larger garage adjustment is indicated - 20k or been more. You can clone the grid or copy it and try different adjustments as suggested see if they even out the adjusted values more.

 

[J Grant]

Let me respond to your comments please.
A % of GLA is common where I am from.
So, if sf adjustment is 'high' in your opinion, give me a % you feel would be better.
The market (went out further, etc) is declining. 16+%
If you look (know) barns (it's really for the Wkshop/Barn) then they can certainly be different. One has 3 bays, one has 1 I believe. One is newer. Barns/Wkshops are all different. You can't just say they are all the same $$$.
Cost To Build is $98/sf.
"weird small garage adjustment" - its for a carport.
Land adjustments are taken from sales 2.5 mile radius of subject. Can't get any better than that imo.
Sometimes, people have to sell and sometimes people get a great deal. It happens. I can't make it up. So, how would you adjust?
I just did a quick AVG of GLA's within 6 miles on 2+ acre lots and the Avg GLA is $257.92
There are a LOT of comments on here, but not a lot of solutions / help. Just saying it's easy to get on here and tell them how bad their doing and not offer anything that may prove to be helpful. Just sayn....

Did the GLA of $257.92 a sf come from RE agent GLA where they add in the land - it just seems high for a 450k avg price range where half of more of the value is land and workshops? Idk, I can not see the comps the quality or what they cost to build new.
Overall suggestion - I like to start out with smaller adjustments and see what develops and then enlrage the ones that need it per data and results , rather than start out with large aadsjumns throwing values all over the place and them maybe have to scale down -

I do small acreage equestrian zoned ( some folks do not keep horses they just like the acreage and privacy) land contributory value is often far lower per acre for developed properties then it is per acre of vacant land sales.

 

[OG80]

I did suggest things if you re read my posts - I appreciate your courage in coming on here and showing your work and training in;t easy.

If the market is declining, then you applied the appropriate downward adjustments. I still fail to see why you include sale 3, which sold for a higher price, having only 1.69 acres, then comps 1 and 2, which had 7 plus acres and 2.7 acres - there has to be a reason why comp 1 with the most acreage sold for the lowest price--- was it a desperate seller? Worse quality? Worse location ? -
Why is comp 1 on the smallest lot selling higher? Better lighting quality? Obviously, there are reasons for it, and putting them in and adjusting for them makes sense and brings teh adjusted range of the comps more into order that reflects the contribution of elements.
p s
Of course, we're working over the internet, and we don't know your area, so the suggestions are not as on point as if we were there, but basic principles apply.

Yes, barns and workshops can vary in size and quality, without your comments, we have no idea why one is adjusted at 50k and the other at 10k. Contributory value of extra acreage can sometimes be quite low and that might be the case in your area since applying larger lot size adjustments seems to trhgow things off.

I get the carpet adjustment I was referring t a two car garage adjustment of 16k - very specific and seems since you asked a larger garage adjustment is indicated - 20k or been more. You can clone the grid or copy it and try different adjustments as suggested see if they even out the adjusted values more.

I appreciate the clarification and comments. I haven't turned in the report yet so I can take out Comp 1.