How do you calculate "predominent value?"

[Dave Smith]

The URAR form requires the "predominent price" to be indicated. How do you establish it?

My MLS reported 84 sales last year between $65,000 and $685,000 (excluding the high end water view and shore front properties which are another market entirely).

The average price was $204,358 and the median price was $172,500. Sixty percent of the sales were between $128,975 and $255,000.

What is the predominent price?

I ask because some UWs want (insist) that the appraised value be consistent with the predominent price. Duh?

Sometimes that just can'b be.

What to do? Oh, what to do when dealing with UWs. :?: :!: :?:

 

[wyecoyote]

Dave,

When I first started out the appraiser that I worked with stated that. Was a hold over from the old FNMA days I guess. Since I left that office several years back I plug in the numbers from MLS as far as area market survey goes whatever the average is they also give three different numbers for average and I use one of them all the time to stay consistent. I have never had a call from a UW about the property appraising at above or below the "average" value. I also state in my reports where I get those numbers and that this is only current trends as reported by the MLS that might satisfy them then again you may have a UW with to much time on there hands that is nit picking your reports. I really haven't read the verbage in awhile I probably need to go through my entire report one of these days when it slows down and reread the entire common responses and filler that is located in the reports.

Ryan

 

[Mountain Man]

I have run into that UW before. I just made up some statement like: The predominate range is what is typical in the neighborhood. It is not meant to describe the absolute highest and lowest values, or age range. The fact that the appraisers' opinion of value, of the subject property, exceeding the predominate value does not make the subject an over improvement. The subject is bracketed by similar sales, in the market grid, with sales from the same or similar subdivision, and the value is well supported.

In other words, go find someone else to pick on.

 

[Ross (CO)]

Dave, are you sure the form asks for "predominant value" ? The word predominant falls within the field dealing with price (range) and age (range), and within the form category of ... the neighborhood. Since we are not appraising every house in the defined market area of the subject we will not have all those values, but we can turn to our database and see what has sold and at what prices. My MLS covers the metro area in gridded 1-sq. mile blocks so I can search to that small an area. For this field I will check sales within past 12 months, for all SFR's regardless of size, style or age, and see what comes up. I will logically kick out the oddball low sale as well as the one highest sale unlike the second-highest and post the remaining Low and High number with what the search gave as average sale price which I use for "predominant" price. The age category is not so easily searched and may require one's general knowledge of the market area (how old are the comps you got ? ) and declare a best-call for an average age. I will then check sales in same area in 6-month blocks of time from, say, Dec. 1st through June 3rd......and then June 1st through Nov. 30th. The average selling price in those two blocks helps establish the trend of increasing, stable or declining. The "stable" values determination does allow for a relative closeness of the two average sales prices, it is not absolute. Stable and declining are two boxes which have been "x"d more often than perhaps 1 to 2 to 3 years ago !

 

[Farm Gal]

Dave:
I have been know to use any of the three primary indicators of central tendency (mean, median, mode) to indicate predominate value in a report.

It depends on the area! Sometimes I use a fourth method developed by little old me: eyeballing the sales for the defined area, and counting sales within ranges, particularly when there is a multi-modal indicator (two or more clear 'groups' of sales of differing ranges). Fancy number crunching and basic definitons do not always tell the whole story: suppliment with more words where/if needed....

And I fuly agree that on occasion a nitpicking, ignorant LO or UW needs to be politely told to GO AWAY!~ :evil:

I usually accomplish this by consulting my file and killing them with three or four fast writ paragraphs of conflicting information about "predominant values" culminating with a nicely phrased

I chose method (fill in the blank) to insert in the little bitty slot because I as the appriaser thought it best fit the parameters of the assignment: to find the predominant value of the defined neighborhood...

If they can wade through all that and ask any intellegent questions more power to em, have NEVER gotten a return call... :twisted:

 

[Mike Garrett RAA]

God bless my MLS...it takes the guessing out of the problem. I do a cma and let the computer tell me the predominate value.

Some considerations....

One square mile grid
Eliminate the extremes
Use a reasonable time period (I like 6 months)

 

[Ross (CO)]

Dave, will bet you get the quarterly issues of R.E.V. magazine. I was looking in the March-April 2002 issue again today and there, on pages 12 -14, is an article written on the very issue....called "Predominant Price and Overimprovements". Should help ya'.

 

[Farm Gal]

The aforementioned article is well developed, and supports MY position: I run with whichever of the three seems to best: the give your snapshot picture a caption!

I run with whatever time frame and location parameters I needed to develop 'at least three useable comps'... I sort of consider that if I use anything save the 'most obvious measure of central tendency': the mean (arithmatic average), I best give a brief explanation of what I did use...


In my market the predominant value is often better represented by the mode, and in many cases there is a bi (or tri) modal situation that requires a sentence or two to describe... sometimes it just makes sense to count the comps and figure it out!