New USPAP Q&As published March 6, 2025

[Surf Cat]

Many residential appraisers know how to work a grid and refine their adjustments to tighten a range and get to a credible result without knowing to describe what they’re doing as sensitivity analysis

Agree. It's going to get harder with the new 1004 with the lack of net and gross adjustment percentages. Many times I give most weight to the sale with the least amount of net and gross adjustments indicating the most comparable to that of the subject.

Hopefully, Alamode will keep that in play...

 

[CGinMN]

That is why what Tim is saying is stupid. I have addressed the actual date built which also includes design trends around the time it was built in the selection of the comparable sales.

But how did you address the difference between 1990 and 1997?

 

[Joe Flacco]

But how did you address the difference between 1990 and 1997?

I don't address that nor do I find it to be necessary. If there were some actual differences between the properties resulting from the difference in date built, then I may discuss it qualitatively.

 

[CGinMN]

But you put a little zero in the grid, you made a quantitative adjustment without addressing the data analyzed to support it!

 

[CGinMN]

The path to improving residential is not USPAP nerds doing the GSEs bidding. It is GSEs and lenders incentivizing good work instead of other metrics.

 

[Mark K]

This is a good example. How do you know it is $0 if ages are different? What you say is data analysis another appraiser might just say, my logic and experience tells me this.

Yep. Maybe some will settle down a bit if the phrase "based on the appraiser's experience" is replaced with the phrase "based on the qualitative analysis performed by the appraiser.."

 

[J Grant]

But you put a little zero in the grid, you made a quantitative adjustment without addressing the data analyzed to support it!

I write something like, "No adjustment made between comp's minor age/year built differences because the effective age is similar, and after extracting for other key items, the market is not showing a measurable adjustment for it."

This is the case in the real market - if the subject was built in 1994, most buyers would not pay more or less for a comp built in 1991 vs. built in 1998. They will pay more for upgrades to a comp or pay less for comp of similar age with nothing replaced and maintenance.

If I included, for some reason, a comp built in 2010 or a comp built in 1960 to the above 1994 built subject, I would likely adjust those sales and comment on why the sales showed significant differences in year built and thus long lived depreciation or trend in building materials had an adjustment applied ( assuming it made sense in the market of course )

 

[Joe Flacco]

I think the main reason people struggle with adjustments is because they are over-adjusting. I think many are attempting to make insignificant adjustments and then are not able to support it. It is perfectly fine to have a 10-15% adjusted range in the sales comparison approach. And then based on your reconciliation of the sales comparison approach, your two best comps might give you a 5% range within the 10-15% quantitatively adjusted range.

I really think that over-adjusting is what unsupported adjustments are about.

 

[CGinMN]

I disagree. I think the main issues with unsupported adjustments is that many appraisers do not understand their adjustments bear relationship to the range, and ideally tighten it to even 10%, even more in homogenous segment. From time to time I see wide ranges due to under adjustment and using adjustment lists. It is a very clear problem, and if our numbers are going to shrink these are the appraisers that need to be expelled.

 

[Tim Hicks (Texas)]

I wonder how many appraisers are still adjusting $20 per foot for GLA and have been for 30+ years?