Qualitative Adjustments

[CANative]

I just make stuff up as I go and call it "I don't care anymore" analysis.

 

[Terrel L. Shields]

a "program" really needed to figure this out??

Well...why not? It is quick usually. How consistent is your market? Really? Mine? This year I have done a 30 year old house on 10 acres. A 1200 SF MH, a 2200 SF MH, a 900 SF very old house, a 3,400 SF newer house, and a couple of single wide MH. Gonna use $50/SF adjustment for all? Nope

 

[ucbruin]

@Terrel L. Shields aka Dave


"...if one of your sales is "far out", then perhaps you need a better comp."....

I believe you know my response referred to "perhaps you need a better comp"....
When "one of your sales is "far out""....

But if you want to use a program to verify that the "far out" sale is truly "far out" who am I to discourage you....

 

[J Grant]

I just make stuff up as I go and call it "I don't care anymore" analysis.

Or the flip a coin method! Years in development and incorporating robust statistics , here it is :
One side of coin says 5k. the other side says 10k .
What is a bath worth?
Flip the coin.
The coin flip is neutral with no personal bias and can hold up in court as a method used for centuries to settle disputes

 

[NachoPerito]

In residential appraising one develops over time their own "lists" and should update those adjustments. The problem with a lot of the "book of adjustment" people is that the "book" they are using was never credible in the first place. I have read a couple reports lately where the appraiser puts in the report his/her list of adjustments...... $2,500 for a bedroom, $500/year, $500 for a deck or patio, $3,000 for a bathroom; $1,500 for a half bath, basements at $10/SF..............

Let us look at the deck. I am appraising a SFR with a sales price of $200,000. The home is 15 years in age and cost new of the property would be about $200,000 with a land value of $50,000. The subject home has depreciated 25% and the comparable properties show similar depreciation.

Cost new for a typical bathroom will be about $8,000 and about $5,000 for a half bath. The $3,000 bathroom adjustment indicates ~40% depreciation and the $1,500 half bath indicates about 70% depreciation. That deck that had a cost new of $5,000 has depreciated 90% and the patio 75%.

The $500/year adjustment would indicate a $7,500 age adjustment vs new while it is really $50,000.

The lists never make sense.

But there is no bigger embarrassment than the $30/SF square foot adjustment. Still seeing the $30/SF adjustment sometimes.... it just won't go away.

 

[ucbruin]

In MA there is the town of Wellesley, as of today MLS shows average sale price is $1,600,000....
And there is the city of Lawrence, as of today MLS shows average sale price is $283,000....

The cost to construct any item in a home could end up being the same in both locations....

 

[bnmappraisal]

In MA there is the town of Wellesley, as of today MLS shows average sale price is $1,600,000....
And there is the city of Lawrence, as of today MLS shows average sale price is $283,000....

The cost to construct any item in a home could end up being the same in both locations....

So you're saying the value is in the land?
(Edit to add: per Google maps, they're approx 40 miles apart)

 

[Michigan CG]

In MA there is the town of Wellesley, as of today MLS shows average sale price is $1,600,000....
And there is the city of Lawrence, as of today MLS shows average sale price is $283,000....

The cost to construct any item in a home could end up being the same in both locations....

What is your point?

Wellesley median income is ~$160,000 while Lawrence is ~$26,000.

 

[ucbruin]

What is your point?

Wellesley median income is ~$160,000 while Lawrence is ~$26,000.

Since you responded to my post....
You know what my point is....

 

[Terrel L. Shields]

Since you responded to my post....
You know what my point is....

Curious how people making $26k can afford even $250+k homes. We have lots of places where median income is about that but housing is mostly <$120k.