Order of operations for market trend analysis

[Fernando]

Best comps would be in similar location thus no location adjustments needed. Too subjective.
Same as time adjustments since many appraisers don't understand statistics relevant to their subject.

 

[Fernando]

This year, I used a 3 year old comp and reviewer didn't like it even though I had conservative time adjustment.
If Fannie advocates time adjustments, what stopping appraisers from using 10 year old comps.

 

[Joe Flacco]

Yeah, if site/locational differences are significant, that is one to analyze up front. If appraisers do that plus well supported market conditions and GLA adjustment, then 80% of the puzzle is solved and the rest is just tinkering to fill in the blanks.

So true. I typically don't have any adjustments below the structure size section. The exception is parking space adjustment which is very high confidence for condos.

The URAR sales comparison grid is actually laid out in the sequence of adjustments top down. I think I tend to look at the order in 3 sections rather than by individual items. You have the top section between terms of sale and view, then you have the main section for the improvement which is from quality of construction to the structure size section, then you have the bottom miscellaneous section.

 

[Terrel L. Shields]

It makes sense that location and physical conditions should be adjusted. Buyers look at those factors

In my area, "location" is not necessarily a big factor. I mean a buyer may want in a certain school district, but that district might be 8 miles wide and 15 miles long. Pretty big area. Some want inside the city limits, but many buyers want within 10 miles of work, or some limitation like that. Not a biggie really. Being near the state lines, there are buyers that simply want in one state or the other...few other limitations except cost. They are not looking for property outside of their budget.

 

[Terrel L. Shields]

If Fannie advocates time adjustments, what stopping appraisers from using 10 year old comps.

Common sense.

 

[Fernando]

I rarely adjust for the terms of sale unless subject had financing concessions in which case, appraiser should look carefully if purchase price is "overvalue".

 

[George Hatch]

This is more/less how the commercial forms are laid out

 

[Fernando]

Common sense.

If appraiser has stats showing percentage increase from 10 years ago, why not use that comp. Fannie has advocated appraisers to have analysis to back time adjustments.

 

[Dublin ohio]

This year, I used a 3 year old comp and reviewer didn't like it even though I had conservative time adjustment

Why?

 

[Fernando]

This is more/less how the commercial forms are laid out
View attachment 96845

If I was a commercial agent and wanted high price, I would give early concessions at time of lease and then get "above market rents" with a long term lease.
Using typical cap rate for such property, I can fool the appraiser.