I keep getting push back on this stipulation from a reviewer

[George Hatch]

Not sure how to answer this? GLA adjustment is $40 per S.F. How was my GLA adjustment supported? Everything is bracketed and its pretty clean report, but they won't let this go. Any suggestions or help is appreciated. What do you use to support your GLA adjustment?​

Your user is telling you that what you have provided so far is not enough. There's only one way to fix that, which is to tell them how you did it. If you compared the sales to each other over a series of iterations until they lined up with each other then that's a legitimate mode of analysis. Although better when using a larger dataset of truly comparable properties.

 

[Mark K]

After looking over the attachments, in addition to the $40/sf issue, I'd be much more inclined to question the $2,000 adjustment for the 1 vs. 2 car garage. Around here, the adjustment is MUCH higher; people like garages.

 

[Joyce Potts]

Simply explain your $40 psf adjustment.

 

[The Bob]

Based on your total $/sf of $323, if you extracted a true difference of $40/sf, then that tells me you have a very high land/value ratio which could explain the relatively "low" $40 adjustment. Most of the time my adjustment for $/sf comes out at around 25-35% of the total $/sf. Your adjustment is only 12% of the total $/sf, which looks low to me.

 

[gregb]

GLA adjustment is $40 per S.F. How was my GLA adjustment supported?

Easiest method-

1. Paired Sales Analysis: This involves comparing two or more properties that are nearly identical in all respects except for the GLA. The price difference between these properties can be attributed to the difference in living area, allowing the appraiser to derive an adjustment rate per square foot.
   • Example: If two homes are identical except one has 200 more square feet of living space and sold for $20,000 more, the appraiser can infer an adjustment rate of $100 per square foot.

 

[CGinMN]

There are no rules of thumb for developing a GLA adjustment. You can use depreciated cost based adjustments, sensitivity, linear and multiple linear adjustments, matched pairs, grouped pairs. In some markets GLA doesn’t drive value to the degree that condition, features, or location do. In other markets GLA strongly correlates to cost, or is the primary driver of value. Part of the job is to know which method to use based on the subject characteristics and the quantity and quality of available for analysis.

 

[Dublin ohio]

How did they get a price per sf of the provided sales

Are you new?. If it is a 1004 it is right at the top of the grid for the subject and each sale

 

[Tim Hicks (Texas)]

Every market is different, but it would have to be junk to require a low $40 GLA adjustment around here. GLA adjustments typically support $80-120 per foot for most areas here for a few years now. Some area, even more. Maybe they haven't seen a GLA adjustment that low and want to know why? Unless land to value ratios are really high there, I would probably question it too. But, every market is different!

If you have been using $40 per foot for 10+ years, you might want to consider why you think living area is not a major factor of value. Here, GLA is king and has high importance. But every market is different.

 

[Non Sequitur]

When are the GSEs going to start to crack down on unsupported adjustments? I have yet to see an appraiser in my area support any of their adjustments or make a single market condition adjustments in the past four years even though some of my markets have increased between 20-30% during that time.

You're about to get your wish.

I'm sure you listened to Phil's last podcast. The appraiser culling later this year he's referring to is FNMA/Freddie are ready to roll out their AI in the sky photo recognition tech. Word is, based on the AI's assessment of Q and C ratings, automatic complaint letters will be sent if the appraiser is "too far off." And it gets better, I've read several posts from people who are helping work out the bugs, 2025 looks like the year the government owned enterprises will give their blessing to borrower inspections via apps similar to the ones used during Covid. All of this just in time for the new "forms" roll out. The future is almost here.

 

[Surf Cat]

FNMA/Freddie are ready to roll out their AI in the sky photo recognition tech.

It'll short circuit and start on fire from the couple of reports I recently had a gander at....