Rounding To The Nearest $1'000

[tim1962]

I had a lender email me yesterday asking why my indicated value in the sales comparison approach was not rounded to the nearest hundred dollars. I did explain that l had been trained to always round my numbers to the nearest thousand, which l've been doing for 15 years without question until today. I just wondered if anyone else had experienced any questions with their practice of rounding numbers?

 

[Michigan CG]

to the nearest hundred dollars.

Because we are not that good.

Lender asked that or AMC lackey asked that?

 

[ucbruin]

I round adjustments to the nearest $1,000. 99% of the time with appraised value.

 

[Meandering]

Because you are reflecting the market and the market rounds, depending upon what is meaningful

Yes you might find a sale that sold for $2,315,492.65, but that sale reflects a single buyer and seller and not the overall market for $2million dollar properties.

Just down loan a list of sales as evidence the market rounds within X zeros for sales within certain price ranges.

.

 

[tim1962]

Because we are not that good.

Lender asked that or AMC lackey asked that?

The lender, l did "correct" her when she said "l see appraisals where the appraiser rounds their opinion of value to the nearest dollar often". I agree, if someone thinks they're that good, they must be better than me, anyway.

 

[J Grant]

I had a lender email me yesterday asking why my indicated value in the sales comparison approach was not rounded to the nearest hundred dollars. I did explain that l had been trained to always round my numbers to the nearest thousand, which l've been doing for 15 years without question until today. I just wondered if anyone else had experienced any questions with their practice of rounding numbers?

Weird question, perhaps there was something else in the appraisal that bothered them.

I round to the nearest thousand, unless I am in the lower price ranges when I might round to nearest $500

BTW better response than "I was trained this way" is to tell the client "that is what majority of appraiser peers round to 1k"..because peer practice is in USPAP as an accepted standard .(I was trained this way is not in USPAP as accepted standard )

 

[cpalub01]

Rounding to the nearest $100 implies an accuracy that is not there and can be misleading if reconciling that way. It's simply a matter of significant digits. Depending on what the property is, I typically either end up rounding to the nearest $1,000 or $10,000.

 

[J Grant]

The lender, l did "correct" her when she said "l see appraisals where the appraiser rounds their opinion of value to the nearest dollar often". I agree, if someone thinks they're that good, they must be better than me, anyway.

I wonder if it's a case there they think they are "that good", to more of a case where they let a computer program do the math and spit out the value... and set it to the last dollar.

Rounding to a thousand or five hundred dollars reflects market contract prices from buyers and sellers who tend to round in those amounts. We tend to see sales contracts at $197,000 or $198,000 , or sometimes $197,500. We rarely see sales contracts of $197,388, though it's possible...most people just don't negotiate that way

Exception is new construction SC prices are line item added and can show $197,388.25. The builder adds up the line item costs cash register style. Other than new construction, a not rounded SC price can include a concession amount or personal property, or just a weird negotiation.

 

[Terrel L. Shields]

In rural LAND sales, the agreed unit acre price may be in hundreds and the price calculated to the penny. $3,600 x 56.87 acres....

 

[tim1962]

Weird question, perhaps there was something else in the appraisal that bothered them.

I round to the nearest thousand, unless I am in the lower price ranges when I might round to nearest $500

BTW better response than "I was trained this way" is to tell the client "that is what majority of appraiser peers round to 1k"..because peer practice is in USPAP as an accepted standard .(I was trained this way is not in USPAP as accepted standard )

Yes l did explain that very clearly and included this statement when l addressed the lender's concerns in the appraisal.

"Therefore; applying the methods and techniques commonly utilized by the appraisers peers to produce a credible appraisal and results that are not misleading, in compliance with the Uniform Standards of Professional Appraisal Practice, l rounded the adjusted sales prices of all comparable sales to the nearest $1,000, and the indicated value by the sales comparison approach to value to the nearest $1,000."