:icon_lol: Incoming ! Just kidding, because everyone is going to ask you where your mentor is.
Time adjustments are based on what the market has shown historically. I don't work off depreciation on comparables at all (?), I have no way of verifying with any accuracy what their depreciation is. Maybe that wasn't your insinuation, but I thought I would comment on that.
But I can calculate what the market has done for the subject and the comparables market area to figure out whether to adjust the comparables for changes in the market since they sold. If the market has appreciated over the past 12 months at a rate of 12%, then that calculates to 1% appreciation per month. If my comparable sold 6 months ago, then that would mean a time adjustment of 6%. Same in reverse for declining markets.
Here's my advice: Get out of the habit of calling them "time adjustments" and get into the habit of calling them "market condition adjustments".
You are not adjusting for time differences. You are adjusting for the differences in market condition between two different points in time. This is a distinction with substance if you think about it for a while.
Make it easy on yourself and set up a little file in excel. Takes just a sec to put in formulas. After that you just have to enter the two dates and prices and tada! You get your monthly, annualized and total decline/increase.
There are several ways to make these adjustments but based on what is described above, one caveat, yuou do not adjust from the date of sale of the comparable...that is a common mistake. You adjust from the date of contract of the comp to the effective date of the appraisal.
When employing a time adjustment in that manner, typically I will determine the drop in values for the market segment over the course of the year, divide that by 365, determine the number of days from the contract to the effective date, multilpy that number by my daily % of depreciation, multiply that by the sale price, round it to the nearest $500 and make the adjustment.
There are ways you can do it by the sold date of the month, but it requires a large market segment of conforming houses.
Wrong. It should be 1% of the monthly accrued value (if appreciation) or 1% of the monthly diminished value if diminishing. It is not as easy at it might sound. I don't use percentages, I use the actual amount for each comp.