Quality Adjustments +/-

[Paul Isolda]

True. Some are morons. Some are idiots. You can reason with a moron.

Love it!

 

[Rick Neighbors]

Quality

Here is an interesting excercise I did one time. Use your Marshall & Swift, and with the same GLA and improvments on an example home, change the Quality from Average to Good, and look at the results.

True this is new construction, but it may be an eye opening experience to some.

Here locally, most folks buying a home can tell the difference between vinyl floors, and cheap carpet and ceramic tile, hardwoods, and good carpet, etc.


Rick

 

[fifteen]

If the comps are truly comps with some physical differences, I usually go with the cost of the physical differences using M & S as a reference. Quality for me is either, $1k, $2k, $5k, $10k, rounded since we don't actually see the inside of the comparables and can't be that exact. Especially when the realtors pictures of the comparables interior only show the highlights. Hardwood floors!! Yeah, in the entry, the rest is 60's shag over plywood

 

[Mike Boyd]

Just support it (superior upgrades, granite vs. solid surface countertops, cast stone fenestration vs. none, etc).

But, how do you obtain the dollar amount of the adjustment? You will very rarely see the inside of a comp....or the rear of the exterior, either. The listing data might not have all the superior materials and the agent may not be able to describe them. More often, the listing data will describe fluff!

 

[fifteen]

Roof lines is a good way to tell quality, that and roof material and exterior- Homes are typically constructed with the exterior reflecting the commensurate interior amenity quality. If someone can afford 5 different roof line trusses they can afford quality inside.

 

[CANative]

If the comps are truly comps with some physical differences, I usually go with the cost of the physical differences using M & S as a reference. Quality for me is either, $1k, $2k, $5k, $10k, rounded since we don't actually see the inside of the comparables and can't be that exact.

If there is enough difference in quality rating to warrant an adjustment you should go big or stay home. IMO (and the way I do it at this time) I use the difference in $/psf between the relevant characteristics causing the difference and apply that figured (adjusted for market reaction) to the total reported GLA of the sale comp. e.g. Subject average and cost is $125 psf; sale comp is good and cost is $150 psf. Difference of $25 psf, market willing to pay $40 psf for the quality. GLA is 2,000 sf so adjustment would be -$80,000.

 

[fifteen]

No problem as long as you can back it up with M & S or some other creditable service. But, at $80k, is that really your best choice for a comparable? or one that makes it work. Over 10% for one adjustment? You're not considering that the quality difference doesn't go down to the studs - it's facade

If there is enough difference in quality rating to warrant an adjustment you should go big or stay home. IMO (and the way I do it at this time) I use the difference in $/psf between the relevant characteristics causing the difference and apply that figured (adjusted for market reaction) to the total reported GLA of the sale comp. e.g. Subject average and cost is $125 psf; sale comp is good and cost is $150 psf. Difference of $25 psf, market willing to pay $40 psf for the quality. GLA is 2,000 sf so adjustment would be -$80,000.

 

[CANative]

No problem as long as you can back it up with M & S or some other creditable service. But, at $80k, is that really your best choice for a comparable? or one that makes it work. Over 10% for one adjustment? You're not considering that the quality difference doesn't go down to the studs - it's facade

Facade, appliances, fixtures, appointments, floor coverings, windows, doors... it adds up fast.

Choices for comparables? lol

Sometimes I have to do whatever I have to do and hope for the best. So far, so good.