Room and GLA adjustments

[TW Gray]

In the sales grid I have always adjusted for room counts i.e. differences in the total room counts of the comparables vs subject. I have also adjusted for the differences in bathrooms. I then also adjust for gross living area when the difference between the comparables and subject is more than 100 square feet.

I also state in the report why I have made the various adjustments. I here that some appraisers also make this adjustment, others don't, and still others only adjust for bathrooms.

It is my contention that differences in room counts, like gross living areas are a reflection on the overall utility of the dwelling and adjustments need to be made for the additional value these different rooms add or detract. Just like bathrooms.

Am I off base or what and why?

 

[Fred]

I would say you are doing almost everyone does. However, I would ask this. Does the house have more rooms because it is larger, or is it larger because it has more rooms? The point is, more rooms and larger is usualy the same thing. How do you know you are not double-dipping and adjusting for the same thing twice?

 

[TW Gray]

Becuase I am adjusting for 2 differnt reasons. One for the rooms and the additional utility and value that they provide and the gross living area for the additional value and utility provided by the additional square footage. The reason I do not adjust for less than 100 square feet is because we all know how Realtors measure.... Or do we. Assessors seem to be very accurate and even then we do not match perfectly!!

 

[Mr Rex]

Depends on your market and where you might be getting the room count. Not uncommon here for Realtors to call any space big enough to stand in a "room". I don't county Foyers, Laundry rooms etc in my "room" count in most cases as they really aren't big enough to "live" in they are just "spaces". For instance one Realtor said a 1200sf house had 11 rooms, I said 6. There is a market preference here for 3 BRs over 2, but really no difference for 4 BRs over 3 and certainly no market preference for a Realtor calling a 4x4 foyer a room or the little area in the corner of the kitchen a breakfast room when you can't get a table and 4 chairs in the space and still open the stove etc. So as always, it depends. GLA is king, all others must follow the king.

 

[Mike Kennedy]

Total Rooms typically are reflected in GLA Adjustment; Bedroom Utility, and Bath Utility variance - IF indicated by the Market - may require specific adjustments above GLA. .....or represent Functional Obsolescence.......let the Market guide you not Brokers, Agents, or Assessors. :icon_idea:

 

[Wally Jones]

Do you have market data that supports adjusting for a different number of rooms? I would think that an adjustment for differences in gross living area plus adjusting for room count might be "double dipping" as Steven pointed out.

In the case of bathrooms, an additional adjustment is warranted due to the added cost of plumbing fixtures. What would justify adjusting for an additional room when the extra living area has already been accounted for in the living area adjustment? I'm not saying it can't be done, just be sure such adjustments are supported by market data.

 

[TW Gray]

2 bedroom homes with similar square footage has less utility than a 3 bedroom home and as long as I am backing off on the square foot adjustment to compensate I am not seeing the issue. Again in my room count adjustment it is about the additional utility that the additional room provides. A dwelling with a family room and a living room is more disireable in our area than just a living room. 3 bedrooms are more desirable than 2 bedrooms and 4 bedrooms more than 3. After that the utility and value lessens. In higher priced homes dining rooms and offices are important whereas in the lower valued homes there not as necessary.

Bathrooms, again, when it comes to this adjustment its about the desire of buyers to want to have more than 1 bath. Mainly because of children or company and everyone wantiing to use the bath at once. Also, many people desire a tub not a shower and this, in our area also makes a difference.

 

[Chris Bradford]

In the case of bathrooms, an additional adjustment is warranted due to the added cost of plumbing fixtures.

Point 1. Cost does not always creat value. Are you sure you are not adjusting for the added utility?

Point 2. Be careful with the "C" word around here, the thread will explode into 497 posts overnight.

 

[George W Dodd]

I think it would be difficult to support an adjustment based just on the number of rooms. Like Mike said it should be for a differences in utility that is not already reflected in the adjustment for GLA. Generally baths and bedrooms might require an additional adjustment over GLA, based on the market data. B

 

[TW Gray]

Yes, I am adjusting for utility and what home owners in our market desire and are looking for.