Rounding Numbers In Your Appraisal

[Joe Masin]

I would guess any M/B would have NO problem if you round up to next thousand or even a couple of thou on any SF.

However, within commercial appraisals, it's NOT unusual to round up (or down) several thousands of dollars (but be realistic).

For my commercial associates, don't dismiss thinking a buyer has a fixed price and that's it! I'm doing a warehouse appraisal where the selling price is $2,100,852???? However, when we have a warehouse at 31,356 SF, the whole number is $67. Buyer wasnt going above that # and that was that!

Jersey Joe

 

[FRANK PERKINS]

In the comparison grid I round to the nearest $500. I think it makes it easier for the reader, no tens digets. Any reason that doesen't make sense?

 

[Steve Wyrick]

Cost Approach, let the program calculate to nearest dollar.

Final value, round to nearest $500.

In narrative reports I round all indicated values to nearest $5,000. Depends on size and value, smaller ones maybe nearest $1,000.

Good topic.

 

[fdjaynes]

IMHO I believe that your final reconcilation rounding should reflect what the market recognizes. If most sales are rounded to a $100, $500, or $1,000 value, then your estimate of value should indicate a similar degree of precision.

Fred Jaynes
Farm Credit Midsouth
Jonesboro, AR

 

[Richard Carlsen]

Cost approach: The calculation that comes out stays. No rounding except on 1004C which does it automatically.

Sales grid: No rounding of the indicated sales price at the bottom. The number as added in the grid is what shows on the bottom.

Sq Footage: No adjustment for under 50sf

Final Opinion of Value: 99.9% of the time, final opinion of value is an even $1000 number. I'm not smart enough nor is the data generally specific enough to get below the $1000 mark.

 

[Randy Beigh]

Greg is right. It wasn't the rounding that caused the problem. It was the resulting math error that caused the problem for the lender and rightfully so. You can round adjustments and/or the bottom line figure, but the math has to add/subtract correctly.

 

[Larry Lyke]

Ray --

You started a new post, that's the reason I didn't see my other response.

My response about rounding was/is:

Round at the top of the column instead of the bottom of the column. This is primarily predicated on the fact that appraisal software have a built-in automatic calculator(s).

So there won't be any arithmetic errors.

A slight rounding at the top is the way to go, in my opinion.

L- in MN

 

[Tim The Enchanter]

I round the SF lot and GLA adjustments to the nearest $500. Estimated values are usually a multiple of $5,000. Of course entry level houses are in the $400k range and condos in the $300k range. It only goes up from there, for the most part.