Square footage adjustment

[litch96]

I have a property that I have no matched pair sales for square footage and had ran across a simple percentage formula but I cannot find it and was wondering if anyone could provide.

 

[Terrel L. Shields]

There is no such percentage formula unless PFA. Try using a sensitivity adjustment. This one is published from long ago. Reduce the SF contribution by subtracting the land and site improvements as well as garage contribution.

 

[litch96]

ok how do I import the information

 

[alebrewer]

So long as your GLA is bracketed, and you've adjusted for the other elements of comparison, just use the GLA adjustment factor that minimizes the adjusted sales range (i.e. use sensitivity analysis). Most residential forms softwares have the ability to change the GLA adjustment factor on the fly, so figuring out which factor minimizes the range is pretty easy.

 

[David S]

So long as your GLA is bracketed, and you've adjusted for the other elements of comparison, just use the GLA adjustment factor that minimizes the adjusted sales range (i.e. use sensitivity analysis). Most residential forms softwares have the ability to change the GLA adjustment factor on the fly, so figuring out which factor minimizes the range is pretty easy.

So, do you mean: first, identify the truly and best comps, than apply your known, established or most comfortable grid adjustment ( like 10% location adjustment if a property is next to freeway), then see the adjusted value range, then leave GLA adjustment as last to lead adjusted value range min. Is it correct? In another word, IF you select the comps correctly, these comps should be paired comps themselves.

 

[Terrel L. Shields]

how do I import the information

Open the file in excel and use a pencil and paper with a calculator and estimate the various contributions vs SF.

 

[alebrewer]

So, do you mean: first, identify the truly and best comps, than apply your known, established or most comfortable grid adjustment ( like 10% location adjustment if a property is next to freeway), then see the adjusted value range, then leave GLA adjustment as last to lead adjusted value range min. Is it correct? In another word, IF you select the comps correctly, these comps should be paired comps themselves.

Correct. Remember - your goal is to reach an adjusted range of $0. In reality that is not possible (think of residuals in regression analysis), but that is nonetheless the goal. So, then, if all your other adjustments are correct, the GLA adjustment factor that minimizes the range will be the correct factor.

 

[sputnam]

Paired sales is not the only way to determine a GLA adjustment. Maybe the easiest is depreciated cost analysis.

 

[weird_limbs]

I use this free online tool for GLA adjustments and Time adjustments: https://the-adjustments-app.streamlit.app/GLA
It calculates the GLA adjustment using group data, regression, sensitivity, and ppsf.

 

[Mark K]

Break out the actual value of the living quarters in relation to the whole.

Sales price - (site value + land improvements including landscaping + driveway/sidewalks + patios/decks + well/septic + garage(s), etc.) = house value.

In typical homes I've found the dwelling to be about 50-60% of the total value.

Do this with several sales comps (maybe 20) with similar age and you'll have a good reference for your file to use later. Use various size homes so you can get to $/SF of each size house and use them for a matched pair analysis.

Terrel's attachment might be similar; I didn't open it.