How to apply percentage adjustments?

[NC Values]

I am taking my Certified Residential exam tomorrow and I am confused about the proper way to apply percentage value adustments. What is the correct order in applying adjustments (eg. conditions of sale, financing, date of sale, property characteristics). What determines if the effect of two or more percentage adjustsments are compounded (multiply/divide) or simply additive/subtractive?

For example, if a comp sale was foreclsosure property with motivated seller that sold the property at a 10% discount for quick sale, there was favorable financing was 2% superior to subject, and the sale occured 1 year ago and local real estate values have risen 4% and the comp is judged to be superior in quality to subject by 5% but has an inferior location to subject of 15%, and comp sold for $100K? (for illustrative purposes only)

 

[Crunch Hardtack]

W.......T.........F Just skip that question and go on to the next one.

Also, I think you are thinking of priority of adjustments, to wit:

1) Financing Concessions

2) Terms of Sale

3) Date of Sale

4) Location of Comp.

5) Physical Features or Differences.

Just order your adjustments and then do the math.

 

[Lawrence R.]

Look at your URAR....they are in order on the sales grid. Start at the top, what is the first box for an adjustment? Second, and so on. They go in that order, and yes it would change th outcome if you do them in the wrong order.

 

[Crunch Hardtack]

Test Advice

Courtney,
By this time, either you know the material or you don't. RELAX. In most states you can repeatedly take the test as fast as you can send the test fee back. I always approach tests of this nature as if I could care less if I pass or not. Even if you fail it a couple of times, with proper study and perseverance you will eventually pass so RELAX. Have a good breakfast and get to the test site 30-45 minutes early and try to account for construction delays, if any.

Also, if you have a question that you become immediately flustered on, skip it and go back to it later. You have more time than you think to complete the test. RELAX

 

[Mr Rex]

In NC you have to wait 30 days between exams. Also, if she doesn't pass before the end of the year, the new 2008 requirements kick in.

 

[hastalavista]

If I remember correctly, there are two types of adjustments- transactional and property. Transactional are all the stuff we usually stumble over; rights being conveyed, financing, etc. Property adjustments are those we do routinely; GLA, location, age, etc.

Transactional adjustments are compounded and should be done in sequence.
Property adjustments are not compounded.

Private First Class Expects to Make low Pay.
Unadjusted Sales Price adjusted for....
P = Property rights conveyed
F = Financing terms
C = Conditions of sale
E = Expenditures made after purchase
M = Market Conditions
P = adjusted Price

Property adjustments are then applied to the transactional adjusted sale price.

 

[Mr Rex]

Google is a wonderful tool:

http://appraisalnewsonline.typepad.com/appraisal_news_for_real_e/2007/09/sequence-of-adj.html

 

[NC Values]

Thanks for everyones input. I am confident I will pass the test. This topiic was not addressed in my Appraisal textbook, but I found the answer in a study guide the following sequence of adjustments
1) Property rights
2) Financing terms
3)Conditions of sale
4)Market conditions
5)Location
6)Physical Characteristic



which is close to Denis Desaix mneomic:

 

[CANative]

I can't figure out where Denis keeps coming up with this stuff.

I'm just glad to sit next to him in class so I can copy his notes. He's like a 250 pound Hermione Granger... with a beard.

 

[hastalavista]

I can't figure out where Denis keeps coming up with this stuff.

From one of those worthless books I have in my library! :laugh:

And, I actually screwed it up; the last "P" was physical characteristics (I couldn't read my own writing!).