How do you handle granite gourmet kitchen adjustments?

[sputnam]

How do you handle granite adjustments? By that, I assume you are asking how do you figure out the magnitude of the adjustment. All adjustments are handled exactly the same way. You either have market data to support an adjustment...or you don't. If you do have data, the nature and quality of the data largely dictate the method used to determine the adjustment. Could be pairs, could be some sort of statistical analysis. Could be in dollars, could be a percentage. Come on. This is kind of appraisal 101.

 

[J Grant]

I personally love the newer surfaces and engineered surfaces. But granite is still by far the most popular, even among high end homes (though the ultra luxury or highly custom ones tend to more variety ( wood, quartz, engineered stone)

 

[Wayne Henry]

How do you handle granite adjustments? By that, I assume you are asking how do you figure out the magnitude of the adjustment. All adjustments are handled exactly the same way. You either have market data to support an adjustment...or you don't. If you do have data, the nature and quality of the data largely dictate the method used to determine the adjustment. Could be pairs, could be some sort of statistical analysis. Could be in dollars, could be a percentage. Come on. This is kind of appraisal 101.

I know how to make adjustments I am a Certified Real Estate Appraiser and did not buy my certification lol, The question was pertaining to the general statement in regards to understanding what a gourmet layout is and if other appraisers notice market changes for granite countertops. I would much rather constructive input but this is not my forum but I did create the thread.

 

[Tim The Enchanter]

I don't make adjustments for granite or gourmet kitchens.
They come under quality and condition imho.

After shopping this stuff for counters, and looking at natural and engineered stone,there's a lot of choices, and I could not tell by looking if it was "real or fake", natural or man made. Durability seems to be similar. Choose your favorite countertop. It's kind of like the propane vs charcoal decision.

 

[Michigan CG]

There are simply things that can't be measured quantitatively, and shouldn't be measured that way. The art of qualitative analysis seems to be lost on many in our profession. A few years back I read an appraisal of a commercial property where the CG appraiser had no numerical adjustments for a commercial property. All of his was by ranking which is an acceptable appraisal practice. Superior, inferior, similar. This is pure qualitative.

I know of a CG who uses percentages for adjustments. No hard numbers. It is a mix of both approaches.

Back to the granite counters and the adjustment. How does one adjust for this type of item numerically when there are so many unknowns? I have a total of about 75 linear feet of total counters in my home including bathrooms and kitchen island or say about 200 SF of counters (we have a lot of counter space). The neighbor across the street has a similar home to mine but I would estimate she has about 40 LF of counters or ~100 SF (no island and much smaller master bathroom).

If we agree that one can install nice granite for say, $50/SF then the COST of my counters would be ~$10,000 while my neighbor has a COST of ~$5,000.

If we agree that laminate counters can be installed for $10/LF my kitchen would be ~$2,000 and my neighbor would be ~$400. Remember our homes would be considered comparable.

The problem comes with confirming the amount of counter space (couldn't that also be some numerical adjustment) in the comparable properties and actually measuring the subject counter top area. What a can of worms that is.

How many want to measure counter space? How many want to estimate comps counter space? How many want to hang their hat on ANY adjustments with so many unknowns?

Let us say that some appraiser thinks that a good adjustment for granite is $5,000 and uses it in his lending work. No one questions it. Fine, you get away with it.

Now we have a divorce assignment and we throw in that same adjustment. Well, it is high profile, the husband and wife hate each other and there are now two appraisals (yes JGrant I am bringing up litigation again).

If I am the other appraiser and asked to review the other appraisal my review is going to ask where that adjustment comes from. My advice to the attorney is going to be to ask the other appraiser where the adjustment comes from. Then ask how many linear feet (or square feet) of counters does the subject have and how much counter space does each of the comparables have. I am also going to advise the lawyer to ask the appraiser what type of counters the properties have. Are they laminate, molded with sinks, stainless, corian, cement, plywood , etc.

After the lawyer is done beating the appraiser up over the counters we will go after the stupid fireplace adjustment that no one can prove. My neighbor only has one, while I have two.

The next question is why are we not adjusting for high end flooring? An exact floor plan house to mine sold in the spring of this year. 18 year-old home; 2,750 SF. Our houses are IDENTICAL in floor plan. The home has linoleum floors in the kitchen and bathrooms; I have wood throughout. The wood is $10/SF while laminate can be installed for $2/SF. We are talking about 800 SF or a COST of $8,000 vs. $1,600.

Finally, another neighbor just put in a new driveway and a new beautiful stamped patio. The patio has dye in it and is great. He spend $13,000 on the patio and driveway. He already has a patio and driveway. His patio is only about 200 SF. My 18-year old deck is ~600 SF and I have a driveway. Do we make an adjustment there?

I would suggest that appraisers consider overall quality and overall updates and address this in the reconciliation of value with a few paragraphs of narrative.

When I started in this business I was taught that every report had to be defensible in a court of law or before the state board.

If I am working for an attorney and there are random adjustments that have absolutely no support I am going to advise (and I have done so) the lawyer to go after the appraiser on the above issues and questions.

I can tell you it is not a pretty situation.

 

[residentialguy]

Gourmet kitchens make gourmet food. Insist they cook you dinner and then make your adjustments based upon taste and presentation.

 

[Mile High Trout]

Wayne good question. Mr CG really handled that answer for the specifics of real estate.

Just remember they're all going to toot their own horns about this and that. A realtor that is used to listing actual gourmet kitchens will still list gourmet kitchen in the trash example in the low end market. And in that lessor market a silly island top might constitute that.

You know good deal for the investor that slapped down the slurry top and competed with the guy who sold with marble. And raw deal for the guy who sold with marble because he was probably comped against regular slurry or stone tops. It's give or take that way you know. Just note if they've got it, and make an estimated adjustment based on opinion.

I like to have a special line item at the bottom when I'm dealing with that same scenario.

Line: K considerations? customs? / Grids: S: Y/Cstm.SS&Grnt / Comps: N/SS&noGranite (adjst - INF) / Y/KnownSimilar (noadjust - offsetting) / Y/assmdSimilr (noadjust - offsetting) / Y/InferiorDesigns (partial adjust in proportion to another example that required the full adjust).

So you know that's a simple example of the non specific comparison methods there. Don't get to hung up on the K/b stuff, but as they are most certainly selling points you can either: adjust for known info, or assume that informational point.

_____________

I thought the slurries did not need the constant sealing and that's why they are considered superior by the non snooty crowd who's happy with hardtops and don't give a hoot if the status symbol associated with actual cut quarry is present. You know it's value in use as much as anything else. It's a buyers preference concern item. Buyers who want k gourmet will probably peruse a few different offerings and pick the K that works for them. But they don't just pick the K, so it's just another in a long string of potentially offsetting and minor consideration points which all play up to the big picture of overall quality comparisons. Because sometimes the K is the feature area or whatever you'll call it, that can deserve a specific line item adjustment apart from the standard quality line, because that helps clarify the report to a 'grid reader', and also makes the grid look a side more sophisticated. The UW will say 'boy this guy really knows his kitchens!"

The whole superior / inferior / offsetting / similar. That's all the simplistic approach you're looking for there. Makes the Realtors happy that you've considered it. Keeps the overly critical analystss happy that you did not try to open the can of worms and predict the sq ft exacting details. etc, etc.

Hope that helps. Now I've got a question for you. How do I put my ugly mug up with your smile so I can have a charismatic picture like that?

 

[Mile High Trout]

My personal standard for an awesome kitchen contains a hunting magazine, an old fashioned boombox with megabass option, and must contain salt and vinegar chips.

So most kitchens fall short of the personal standard. It's like you can keep all that crazy dime stop backsplash, where is the properly elevated custom built inset cooktop?

I appraised a home once with a commercial grade cooktop surface like on the best cooking shows. Had propane and awesome iron slab pieces so you could use it in a multitude of ways. Deserved a 20k adjust over the next 'standard flatop cookers'. It's all about recognizing best features. And they always take the wine humidor or whatever that is with them. That slot is always empty when the move out.

 

[sputnam]

'Gourmet kitchen' is a marketing term. Chefs don't use it. I know that since my brother is a chef and in a former life, I was in the restaurant business. The only question is...as always...what particular features does your market recognize. It doesn't matter what any other market recognizes...just the market you are working in.

 

[JSmith43]

Oh heck, I decided to handle this with a PM