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Review Appraisal Comment

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Kenneth Stovall

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I had a review on one of my appraisals. The reviewer says, and I quote, “Comp #1’s Spanish design is a “character” home that is in greater demand than the conventional design of the subject”. The subject is located in South Gate, LA., and if anyone is familiar with this city, there are all different types of “character”. My question is; is there any literature that would support this reviewer’s comments. It’s always been important for me to do the right thing but I don’t like when people shoot from the hip with comments that aren’t supported.
 

c w d

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Oct 2, 2006
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Florida
I had a review on one of my appraisals. The reviewer says, and I quote, “Comp #1’s Spanish design is a “character” home that is in greater demand than the conventional design of the subject”. The subject is located in South Gate, LA., and if anyone is familiar with this city, there are all different types of “character”. My question is; is there any literature that would support this reviewer’s comments. It’s always been important for me to do the right thing but I don’t like when people shoot from the hip with comments that aren’t supported.

I would not rely on publications to rebut a reviewer. You should have noticed a higher demand for similar homes in the market. If you didn't note any greater demand (i.e. price) of those types of homes then you didn't note any. When you rebut make sure to indicate that the reviewer needs to provide supportive data. You can't provide data that doesn't exist so it's on his shoulders. Unless of course, you over looked the demand for those properties.

Remember, higher demand means higher price. If there isn't a higher price, then how can there be a higher demand? Thats economics 101. Perhaps you could demonstrate support for that position and slam dunk your reviewer making him look stupid and foolish? If you can make your reviewer appear stupid and foolish then the rest of his commentary should be suspect.
 

Fred

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Retired Appraiser
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is there any literature that would support this reviewer’s comments.
Why not just analyze the market? Either the prices and square-foot prices are higher for the "character" design or they aren't.
 

Kenneth Stovall

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California
That's my point. There is no data supporting the comment.
 

Mztk1

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Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
Very often the Spanish style is more costly to build. Key things a Spanish style house has that increases cost are the tiled roof, arched doorways and windows, they are usually concrete block and stucco and often have a large courtyard in the front as well as casement windows.

In some of my markets it is as close to axiomatic as you can get in appraising that the Spanish style is going to have more appeal. It seems a lot of appraisers know this when appraising one, but forget about it when using one as a comp.

I have other neighborhoods though that show no reaction.

My guess is the reviewer felt that comp #1 inflated the value and that his proof was in his own analysis of the market (perhaps in his grid). Literature isn't going to help you one way or the other. Only a well supported reading of the market reaction to the Spanish style vs the style of your house is going to the settle the dispute.
 

Mztk1

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It may make the reviewer look bad or not. Probably the better way to come out good in a review dispute is to take the higher road. There is a burden of proof by the original appraiser for the original adjustments or lack thereof for the Spanish style. If the style is different a comment should have been made. If you saw no market reaction for the style difference, then that is all I'd repond with. "The style differences were noted at the time of the original inspection but the market preference, if any, was not measurable and adjustments were not warranted".
 

Mike Kennedy

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Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
Higher Demand may not produce an increased SP$ but often can be measured by abbreviated DOM. The "literature" you seek is the local market data. The detailed analysis in support of your opinion that the market does not demonstrate premiums for Style, Design, and Quality should have been in the report. If so - cite it, if not..reply with it. Close the door - shifting the focus by requiring the Reviewer to provide specific detailed analysis to substantiate that Assertion.
 

Marcia Langley

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Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
That's my point. There is no data supporting the comment.

If there is no data supporting the reviewer's position then there must be data supporting your own position.

A comparison of subject-styled house prices to comp1-styled house prices should do the trick.

I agree that it should be on the review appraiser's shoulders to provide the supporting data for his opinion. And that should already be in his report. I'd ask for it before making my rebuttal. Simply asking for it may make it go away. But don't burn your bridges. You may get caught off guard by whatever they send you. Get that first before you commit to a response.
 

Metamorphic

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Mar 15, 2008
Professional Status
Certified Residential Appraiser
State
California
If there is no data supporting the reviewer's position then there must be data supporting your own position.

Ditto.

Figure out how to tease as many years as possible of data out of your MLS with "spanish" style as a variable and without. Graph the spanish's against the other's (2 curves on the same graph- date vs time w/spanish, and a date vs time w/out spanish). If you've got enough data you might even do a 3rd curve of the specific style of the non-spanish one you're looking at. You'll probably want to plot $/sf rather than raw price if this is a conforming neighborhood where there's not a lot of major non GLA amenities (horse facilities, water access, acreage, mega view,etc), and you'll probably want to filter the set down to some reasonable approximation of you subject. Just make sure you dont dip below a reasonable sample size with your filtering.
 
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