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

[djd09]

I like appraisals with no adjustments. Why distort the truth.

 

[Terrel L. Shields]

I like appraisals with no adjustments.

That's almost impossible with rural property, but I like it...

 

[Michigan CG]

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

Why should you care, you just use your antiquated list?

Paired sales analysis is a theory only.

If you have two exact houses that are new, the same building plan and the only difference is GLA then you have a paired sale.

Real life paired sales are not common although many appraisers would tell you all of their adjustments are based on paired sales; those people would be dishonest.

Here are examples:

1. Small town north of me has a subdivision that has very similar plans for new houses. They also offer crawl spaces on the models and basements for an additional charge. It was very easy to extract the $15/SF adjustment for the basement. So easy US might be able to do it if he ever tried.

2. Town west of me has a subdivision with Phase 1 that has many houses that are the same model. The homes are 10-15 years in age. Multiple homes sold with finished basements and multiple homes sell without finished basements. Paired sales showed the value of the finished basement to be $10-$13/SF with the homes having a bathroom in the basement having the higher contributory value of the bathroom (1/2 or full).

 

[Ahhhh Yeahhhh]

Why should you care, you just use your antiquated list?




If you have two exact houses that are new, the same building plan and the only difference is GLA then you have a paired sale.

Real life paired sales are not common although many appraisers would tell you all of their adjustments are based on paired sales; those people would be dishonest.

Here are examples:

1. Small town north of me has a subdivision that has very similar plans for new houses. They also offer crawl spaces on the models and basements for an additional charge. It was very easy to extract the $15/SF adjustment for the basement. So easy US might be able to do it if he ever tried.

2. Town west of me has a subdivision with Phase 1 that has many houses that are the same model. The homes are 10-15 years in age. Multiple homes sold with finished basements and multiple homes sell without finished basements. Paired sales showed the value of the finished basement to be $10-$13/SF with the homes having a bathroom in the basement having the higher contributory value of the bathroom (1/2 or full).

In your example of the new construction paired sales... This only works because you have the same seller on each house. So, the value difference indicated between the two different items is a reflection of this particular seller rather than the market in general. This seller priced both houses to compete with each other... Not a good paired sale.

In order for a paired sale to work, you would have to have both houses be 100% identical. Then you would have to have buyers and sellers with the EXACT same motivating factors (never happens). Then by virtue of the fact that each sale is located in a different place there is a difference that could potentially have an effect on the marketability or value to one buyer over another.

Paired sales are a theory only. If one does exist (which I have never seen one) the data it yields will be too limited to be meaningful to the market as a whole.

 

[Michigan CG]

In your example of the new construction paired sales... This only works because you have the same seller on each house. So, the value difference indicated between the two different items is a reflection of this particular seller rather than the market in general. This seller priced both houses to compete with each other... Not a good paired sale.

In order for a paired sale to work, you would have to have both houses be 100% identical. Then you would have to have buyers and sellers with the EXACT same motivating factors (never happens). Then by virtue of the fact that each sale is located in a different place there is a difference that could potentially have an effect on the marketability or value to one buyer over another.

Paired sales are a theory only. If one does exist (which I have never seen one) the data it yields will be too limited to be meaningful to the market as a whole.

Your argument is absolutely ludicrous; the same seller one being the most ludicrous. The buyers of these homes had choices of other competing new properties they could have chosen. The motivations of typical buyers is to buy a home that fits their particular needs. If the seller was over-priced the market participants (in this case buyers) would have chosen a different development (principal of substitution).

Your argument about the homes being in different locations is false, they all were in the same small neighborhood.

Paired sales analysis is a proven theory even though exact paired sales are many times hard to come by.

Another new construction example is in another neighborhood and current. The homes are lower-end construction quality and the three-car garage is $9,500 more than the two-car garage option. Another example, however rare, of matched pairs. If one were want to use this for older homes in the neighborhood one would then apply depreciated cost to the sales to derive a very supportable adjustment.

 

[Riick]

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?

ROTFL... Just what I learned while doing my Demonstration report.
Sometimes, you can make paired-sales say whatever you like.

"When I use a word," Humpty Dumpty said,..."it means just what I choose it to mean
—neither more, nor less."
"The question is," said Alice, "whether you can make words mean so many different things."
"The question is," said Humpty Dumpty, "which is to be master—that's all."
​

 

[jay trotta]

Actually, yes.

However, USPAP states we must do as our peers do.

But, if our peers are following FNMA input on the matter, and FNMA is the Rule maker, then we all would be correct.......Less work, More pay....No Stips

 

[Michigan CG]

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

The guys who use this line are also the ones who say "Because of my 30 years of experience..." and are the ones using that list from 1990.

 

[J Grant]

Paired sales works by putting sales on a grid, adjust for all major items except one, and that yields an extracted $ amount for that feature. Gives a start point for the adjustments. Then back them up by depreciated cost, RE agent survey, or looking at additional sales with and without the positive or negative feature.

Paired sales like any technique can be well applied or poorly applied.

I view adjustments as part of the model of "most probable". Since different buyers might pay a different amount for a pool, for example, and paired sales or regression might indicate a range, what is the most probable amount most typically motivated buyers would pay for a pool amenity in X price range? There is the big spender who pays more, and the bargain hunter who pays cheap, but the most probable/typical is what we are looking for as the model for market value . On a superb quality property the most probable might be on the high end; on a modest starter home most probable might be on the lower end. The most probable does not always mean "the middle",. It means most probable relative to the type of property and market for that property .

 

[ucbruin]

The guys who use this line are also the ones who say "Because of my 30 years of experience..." and are the ones using that list from 1990.

And I thank you for updating the 2 chapters in my Book titled Bedroom and Fireplace adjustments.....
Reconfirming NO adjustments.....
EVER!!!!!
(Although I do enjoy an occasional fp adjustment)....

Could you please update/reconfirm the 2 chapters titled Garage and Half Bathrooms soon????