Income Property Review

[George Hatch]

It's a cafeteria, not a marriage.

 

[TMcR]

J.G., would you prefer not to do so in the IA or just the SCA?

Deriving an adjustment in the SCA is difficult if there are no similar unit sales. Can I derive a unit adjustment from the IA?

 

[J Grant]

J.G., would you prefer not to do so in the IA or just the SCA?

Usually the price difference is so large between 2 and 4 units that im the support comes from the IA of a unit-

for sales I would use a triplex or go back in time or out of area for a 4 unit/fourplex

 

[George Hatch]

The contributory value of the land component is different when divided by 2 vs divided by 4. Depending on local market conditions the owner-occupancy factor can be higher for 2un properties that for 4un.

 

[J Grant]

If I have to use a duplex or triplex for a four-unit subject, in addition t ote IA,
in the SC grid, I adjust for the # ot units , such as 3 unit comp to the four unit subject - which is a large adjustment .

 

[George Hatch]

If the site value contributes 30% or 50% or 75% to the whole then the residual is attributable to the improvements. That kinda points in the general direction of how to apply a GRM to the difference in rent between units of different room count. It's an indirect way of adjusting a GRM and perhaps only suitable as a check against the indicators from a direct comparison between comparable sales, but its better than using the adj factors from SFR appraisals in the same neighborhood.

 

[sputnam]

Prior appraisal reports are often distributed by RE Agents often times unsolicited. With that said.... My question to the appraisal community concerned Unit adjustments for 4/units in comparison to 2/duplexes and how the community arrives at an adjustment. I have received great comments from the community and like the majority of appraisal reports by others I choose to ignore.

Your basic question has been answered in the forum over and over and over. The answer is.... in the market. Appraisers do not control what data is available at the time we develop and report an appraisal. We find the available data and analyze is. The comparables we select should be the sales that are the most similar to the subject... regardless of guideline requirements. Do the value analysis first then, worrying about meeting guidelines. All adjustments should be extracted from market data. Is it easy? Not always. When it's not is when you actually have to earn your pay. There are always comparables. Sometimes there are no comparables that are recent or close by or have a high degree of physical similarity to the subject.

 

[Tom D]

No larger single family around converted to a 2 unit or 3 unit that has a lot of bedrooms and bathrooms with a closer gba number.
I like looking at other appraisals, maybe can pick up something that i can use. Also, like to look at the drawing to see if we are alike.
When i reviewed, i learned what not to do from the bad work i was looking at. Before USPAP & lender had an easy pencil in form.

 

[Cob]

Nor does anyone but sometimes you can find some tidbits you were not told and investigate accordingly. Further, never hurts to double check sketches etc. And finally, if you have significant differences with the prior report, then you can either address the issue with some emphasis or better yet, be prepared to answer the clients' questions about it. Just because I get someone else's viewpoint on a property, does not mean I have to believe it. I to suppose you refuse to look at the pictures in the MLS for subjects and comps so it doesn't taint your view?So, am

When I was doing a lot of REOs (or as non-FNMA calls them OREs) for a bank, a prior report or MLS listing was handy in the event we were going pre-foreclosure drive-bys.

Exactly.

sometimes perhaps we should

****if you have significant differences with the prior report, then you can either address the issue with some emphasis or better yet, be prepared to answer the clients' questions about it.****

Unless when the client engaged me, they told me about a previous appraisal report and that I was expected to comment on it, that's NOT part of my Scope of Work, if you want to get involved to that level with your client, go right ahead, that's your choice.

***** I to suppose you refuse to look at the pictures in the MLS for subjects and comps so it doesn't taint your view?****

This has to be one of the MOST absurd comments I have seen on AF, I'll just leave it at that. I NEVER said looking at another appraisal report that I was never asked to look at would "taint my view" if I did, please point out to me where I did. It is simply "MY" way of doing things, when I am assigned an appraisal on a property, that's EXACTLY what I do, I do not perform an appraisal report and then go over someone else's appraisal report unless I am being asked to and paid to before I have accepted an appraisal assignment.

As I have told you before, you do WHATEVER you want to do in your appraisal practice and I'll do things in my appraisal practice as I see fit, we all do things different, if you want to accept an appraisal assignment and also look over another appraisal on the subject property, go right ahead, that's your business.

It has been my experience, that whenever I am given another appraisers appraisal report, there's a reason behind it and I can assure you that 99% of the time, the reason isn't to somehow help me out with my appraisal, there is usually an ulterior motive, I will gladly view another appraisal report if the assignment is an REO property as you mentioned, but that's usually NOT why a client, Realtor or homeowner is providing me a copy of someone else's appraisal report.

Again, you make what business chices you want, I personally have certain procedures that I follow and rarely veer away from them.

 

[Cob]

Prior appraisal reports are often distributed by RE Agents often times unsolicited. With that said.... My question to the appraisal community concerned Unit adjustments for 4/units in comparison to 2/duplexes and how the community arrives at an adjustment. I have received great comments from the community and like the majority of appraisal reports by others I choose to ignore.

EVERY market is different, I'm not familiar with the Arizona market, but I know how the Austin area where I work reacts to Duplex and 4-plex properties, the market reaction is for bedroom counts on sales and rentals, parking amenties like garages and caports are also very important in my market, the size of most Duplex and 4-plex properties in the Austin market is not really a factor, it's mainly Bedroom, Bath count and parking.