I keep getting push back on this stipulation from a reviewer

[Tom D]

Per reviewer - The Gross Living Area Adjustment(s) $39.92/SF vary significantly from the average price per square foot of the provided sales ($323/SF)

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?

simple answer to the person asking. the $39.92 is a mico adjustment for the GLA only. the $323 is a macro adjustment. it is a gross includes the ground, amenities, and everything about the property. they are two different units of measure. never got a question back when i explained it. you can embellish the sentence more.

 

[Terrel L. Shields]

If the land and outbuildings or site improvements are the bulk of value then the difference between the gross SF $ and the net GLA $ can be large.

That would be demonstrated by the cost approach which, of course, everyone thinks is worthless, except me and a few old die-hards.

 

[J Grant]

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

I was just surprised ot see a reviewer reference it , since the $ sf per sf includes the land, a pool, the house, a garage, and everything included in a giant lump sum, when price per SF on the grid is for the dwelling only, so of course it will be much lower. RE agents like to use the giant lump sum to divide the entire sale price by the dwelling sf - in which case man dwellings would cost 2 or 3 times as much cost to build as they actually do !

That said, $ 40 per sf might be a bit low but if that is what the residual contributory value showed, that is what it was.

 

[djd09]

The germane question is, what did YOU use to support the $40/SF? How someone else supported his/her adjustment is not really relevant.

If I had such a request, I would respond by supplying the data and analysis supporting the adjustment rate that I had applied.

how does ACE support their adjustments...

 

[CGinMN]

I think some misunderstood the OP. The reviewer asked why there was a significant variation between PPSF and GLA adjustment, not how the adjustment was developed. The appraiser wanted assistance answering this. The OP then said they supported their adjustment via bracketing (i.e. sensitivity), then asked for input from appraisers on how they supported their adjustments.

 

[J Grant]

I think some misunderstood the OP. The reviewer asked why there was a significant variation between PPSF and GLA adjustment, not how the adjustment was developed. The appraiser wanted assistance answering this. The OP then said they supported their adjustment via bracketing (i.e. sensitivity), then asked for input from appraisers on how they supported their adjustments.

If that is the case, it goes to show that the system is broken because a so-called "reviewer "asking about why there is a difference between the price per Sf, including lot size and a GLA adjustment, is asking an ignorant question. A "reviewer" is a generic label and need not be a licensed appraiser; it could be anybody who is handed a checklist of things to look for.- or a computer scan that spits a checklist of discrepancies out.

 

[CGinMN]

It should not surprise you that AMCs and lenders employ incompetents as reviewers. Just as they contract with appraisers that are incompetent.

 

[Mark K]

Assuming the $40/sf is correct and adequately supported, I'm inclined to think that there might be other facets of the report that need further research or that the land value is very high in comparison to the improvements value (as mentioned by others). If the land value significantly exceeds the value of the improvements the lender may be reluctant to make a loan on a property where most of the value is in the land.

$40/sf GLA adjustment in that price range tells me (or at least strongly implies) that the improvements have little contributory value to the site.


PS: this site is getting so glitchy that I used to think that using it was like kick-starting an old Harley. I'm beginning to think that its like push starting a 747.

 

[ucbruin]

Weird how everyone hates the Book of Adjustments....
Yet $40.00 30+ years ago was in the Book's range....

 

[J Grant]

It should not surprise you that AMCs and lenders employ incompetents as reviewers. Just as they contract with appraisers that are incompetent.

As more of the work hired this way entered the system in recent years, it skews the values and prices in the market,as does the waiver/value accept program.

WRT standards, USPAP has a standard where ( paraphrasing) it states an appraiser who relies on and uses an AVM or statistics or results to understand the method and be able to replicate the results. I bet many don;t and just click a key and let the software do it, then paste the chart in or use the results. IMo, statistics can be another tool but should not take the place of judgment and analysis,