Quality Adjustments +/-

[SunbeltAppraisals]

I make quality adjustments in the "Quality of construction" field on the sales grid. An simple example would be a $5/sq ft +/- adjustment in this field.

I had an underwriter request to move this adjustment to the "Condition" field of the sales grid.

The data reflects the condition of each sale to be average. The quality of 1 comp was inferior having vinyl flooring & fewer upgrades.

Any feedback on this method?

What process do other appraisers use???



Thanks

www.AlexOlmo.com

 

[Peter LeQuire]

Quality isn't condition: condition isn't quality. Why does this confuse the, er, underwriter?

 

[Metamorphic]

Underwriter is an idiot.

Quality = Quality of the materials, and in some cases methods, used in the construction of the home

Condition = How well the improvements are maintained, and how much useful life remains.

 

[BRCJR]

Quality isn't condition: condition isn't quality. Why does this confuse the, er, underwriter?

Quality is to the standard of materials used. These may be installed in a workmanlike manner or not.

Condition is to the standard of the state of repair or not. A floor covering may be of excellent quality in poor condition.

Underwriter is in need of appraisal education, in my opinion.

 

[Mike Boyd]

It is difficult, if not impossible, to support a market reaction adjustment for quality. It's possible the underwriter could not find any substantive reconciliation for a quality adjustment and was giving the appraiser an alternative way for accounting for a value difference. I'm not saying that would be wise, but we should not paint ALL underwriters with the same brush.

 

[Terrel L. Shields]

Why does this confuse the, er, underwriter?

and the correct answer is..

Underwriter is an idiot.

I would be so crass as to suggest that after a peer review, the concensus was that he/she is an idiot. I wouldn't mince any words. Just spit it out. You'll feel better, too.

but we should not paint ALL underwriters with the same brush

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

MORON - A person of mild mental retardation having a mental age of from 7 to 12 years and generally having communication and social skills enabling some degree of academic or vocational education.

IDIOT -A person of profound mental retardation having a mental age below three years and generally being unable to learn connected speech or guard against common dangers.

 

[SunbeltAppraisals]

Thats what is thought as well!

 

[Restrain]

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

 

[DWiley]

A contributing factor to the "idioacy" is that many appraisers do adjust in the manner requested by the underwriter. I often see this in appraisal reports that I review.

 

[CANative]

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

Wouldn't that be more like describing the difference rather than supporting the adjustment?

If and when I find that the market will pay more or less depending on quality it's usually supportable as a matter of common sense and I can support it from cost data. It's pretty easy and free to run cost data on www.building-cost.net using different quality ratings and use the difference on a $ per sf basis (GLA of the comp) with an appropriate amount of incentive.