So Punk, Can You Prove Your Adjustments, Go Ahead Prove Them !

[Joe Flacco]

Paired sales can work, can be misleading. Pairing 1 & 2 =$40/SF Pairing 2 & 3 =$70/SF. Pairing 1 & 3 = $55/SF....Which pair is right?

It depends. But sounds like you found a reasonable adjustment range of $40 to $70 per SF. Depending on what 1, 2 and 3 are, maybe one of the pairs are more reliable than the other.

 

[ucbruin]

Sorry, you are incorrect in your whole premise. If the only difference is GLA and you bracket with differing GLAs then you have created paired sales. While true paired sales are not common they do exist.

"While true paired sales are not common they do exist."

Yes they do....
In CE courses......

 

[Ahhhh Yeahhhh]

The "only" difference is never the "only" difference. Paired sales analysis is a theory only.

 

[Joe Flacco]

Pretty sad that some do not understand something so basic and common sense as paired sales analysis. Some fools are actually out there trying to line up every item like fireplace and color of paint on the house to find a "true" paired sale. SMH

 

[ucbruin]

Appraising is mostly "common sense".....

 

[Joe Flacco]

House A traded for $100k. It is 1000 SF and dated. House B traded for $140k. It is 1200 SF and renovated. Solve for the difference in GLA. The remainder is adjustment indication for condition. That is still paired sales analysis. You don't need perfect pairs.

 

[Joe Flacco]

Appraising is mostly "common sense".....

Paired sales is as common sense as it gets.

 

[Ahhhh Yeahhhh]

House A traded for $100k. It is 1000 SF and dated. House B traded for $140k. It is 1200 SF and renovated. Solve for the difference in GLA. The remainder is adjustment indication for condition. That is still paired sales analysis. You don't need perfect pairs.

A paired sales analysis without "True" paired sales isn't a paired sales analysis.

Paired sales analysis is only a theory upon which adjustments are based. They cannot be based on actual paired sales as there is no such thing unless the exact same buyer and seller were involved.

The adjustments are based on the theory of a paired sale. However since paired sales do not actually exist, then the adjustment cannot ever be based on actual paired sales.

Why do we say the adjustments are based on the THEORY of the paired sale??? To keep some morons from making market adjustments on depreciated cost or income basis. A theoretical paired sale is a market based adjustment whereas depreciated costs and income based adjustments have no place in the market approach.

 

[Terrel L. Shields]

It's hardly calculus and what 3 pairs will look better than a sensitivity chart of the comps?
I am not saying sensitivity is rigorous math, but the issue is to make it look complex enough that the underwriters won't say anything because they are not bright enough to understand what you did... I mean they are working for an AMC, right? They can't be too sharp. It only takes a minute or two to have both presented in the report and how are they going to stip you then? Adjusting for age and condition? I have that in the same spreadsheet and it is based on effective observed age.

 

[Ahhhh Yeahhhh]

Terrel.. What you did and what you are referring to is called bracketing... Not paired sales analysis.

Also, if you will notice... You would likely reconcile to the same number regardless of what (if any) GLA adjustment you applied.