SCA Lot/GLA "thresholds" ???

[ZZGAMAZZ]

The "lot" and "GLA" adjustment boxes in the ACI Sales Comparison grid [presumably all appraisal software] include a "Threshold" cell below which no adjustments are applied.

Although I hope to be the type of practitioner who questions everything I was taught, I never previously thought too much about it, and now I wonder "Why"?

 

[Terrel L. Shields]

If I have a house that is 2200 SF and a comp that is 2180 SF, is the 20 SF "visible" in the market place? Probably not. For me what is the least I will adjust for? Basically, I'm one of those who suspect that 2 to 3% difference isn't indistinguishable in practical math statistical terms but OTOH, a "safe" level might be 1%....or $2,000 on a $200,000 house. I am confident you cannot (mathematically) support an adjustment smaller than that. It is down in the statistical noise of the market.

 

[J Grant]

small variances in living sf or lot size.. the differences too minor to ( typically) have a measurable extracted adjustment or reaction in price Do buyers notice, or pay more, for a 2100 sf house vs 2130 sf, or a 10200 sf lot vs an 11000 sf lot? Probably no --- some appraisers mechanically adjust for that anyway which these days looks a bit old school - it is not a horrible thing to do but makes the report seem more generic and rote and too many of such adjustments in total can distort the value....

Of course there are those properties or areas that can be the exception -

 

[Terrel L. Shields]

too many of such adjustments in total can distort the value....

Yes, too many adjustments only increases the chance of skewing the adjustments

 

[Sid Holderly]

Option A is let the software (or formula) put in the figured adjustment; B round all to the nearest zzz; C use if less than or if greater than then a adjustment. On any of these trying to describe you method to an AMC reviewer may be problematic. Choose what you like for the problem at hand and be content if you have to choose another method for another problem. As the value goes up each minor amenity has less impact and other amenities may come into the mix that need adjustment.

It ranges from if there is a space there it needs an adjustment to the fewer adjustments the better. You can not please all the people (AMC's or Mortgage Co's) all the time. It may take a page of explanation to support a small adjustment that has insignificant impact on the final value. Know when to concede and go on.