Stip to add specific comp to grid or a different comp within 1 mile of the subject

[RCA]

It seems like each year I read more and more articles about appraisers getting in trouble for not being able to support every adjustment or cost approach value with hard market data. Maybe I need better data sources or more experience but I can never seem to adjust all my comps to the exact same value and still support all those adjustments with market data. I would love to be able to do that.

Bert Craytor @ Pacific Vista Net

Videos on how to appraise properties using R with multivariate adaptive regression splines (MARS) and my variation of the Sales Comparison Approach (SCA) I call the Residual Cconstraint Approach (RCA).

www.youtube.com

 

[RCA]

Bert Craytor @ Pacific Vista Net

Videos on how to appraise properties using R with multivariate adaptive regression splines (MARS) and my variation of the Sales Comparison Approach (SCA) I call the Residual Cconstraint Approach (RCA).

www.youtube.com

Note 1: There is a transfer error: The first symbol of the second proof should be RA[c] rather than CR[c]. RA[c] is the residual adjustment for comparable c, where RA[c] = SR-CR[c].

Note 2: I need to update the video and extend it ... I just keep getting tied down with other things. But it will get done sooner or later.

 

[Dublin ohio]

You should be able to add ANY comp to the sales grid and it should adjust to exactly the same value as the other comps.

Are you talking actual comparables or just all sales. If you note from the OP's posts. The subject is a 2 story home. The client wants them to use an inferior Bi-Level. Hardly truly "comparable".

 

[J Grant]

It seems like each year I read more and more articles about appraisers getting in trouble for not being able to support every adjustment or cost approach value with hard market data. Maybe I need better data sources or more experience but I can never seem to adjust all my comps to the exact same value and still support all those adjustments with market data. I would love to be able to do that.

The point of an appraisal is not to get everything to adjust to the exact same value.

The comps are market extracted and produce a range and we choose the range according to which comps are most like the subject or share a key high value feature or defect and take into consideration the market conditions. He has his own math program he uses and it is outside the peer practice of appraisal development - track his posts and decide for yourself.

 

[J Grant]

Need some advice here please.
A lender client who sends me the majority of my assignments sent a stip to add specific comp to grid or a different comp within 1 mile of the subject.

From his first post, the client did not instruct him that he must use that comp; they asked him to add it or that he could add a DIFFERENT comp within a mile.

If the OP believes a smaller bi-level with a pool is not a good comp, then have the guts and integrity to professionally explain why. And then add another comp from the immediate area - or even 2 - which you should have done in the first place. Are there any similar 2-story sales in the immediate area waiting the past 18 months ? Even if they are a bit bigger or smaller or have a pool. The client perhaps got a CU flag on the appraisal,- or their own internal review flagged it.

It is stupid to add it and give it no weight if there are other sales that could be comped within a mile that could be used - of course, it begs the question why they were not used the first time - location is a crucial aspect and a sale could need an adjustment for size or upgrades but including it because of location helps develop the value with credible ssupport- there are some subject properties are very unique or not at all similar to the others sold in an area which is a legit reason not to use the other closers sales, but for a more generic subject property that is not the case. It is ideal to compare a 2 story with other 2 stories, but a ranch one story with similar sf , upgrades and amenities in close location can be a comp as well.

 

[Raven59]

Could you be more proactive and responsive to the client? It seems your ego is preventing good business practices.

I have included a comparable property within a 1-mile radius to address your request. This property has been added to the analysis, comparing it with the subject property and the other comparables initially included in the report. Although this property is closer to the subject property, it differs significantly, which could impact its suitability. These differences include [state differences], which affect its relevance. It has been included to address your concerns, but based on my professional analysis, the initial comparables selected provide a more accurate reflection of the subject property’s market value. These initial comparables better bracket the Gross Living Area, adjusted sales, and overall adjustment percentages, ensuring a credible and reliable valuation.

This approach demonstrates responsiveness to the client's request while maintaining the integrity of the appraisal report.

 

[Raven59]

Delete

 

[sputnam]

Need some advice here please.

A lender client who sends me the majority of my assignments sent a stip to add specific comp to grid or a different comp within 1 mile of the subject. To me this seems to "limit the scope of work to such a degree that the assignment results are not credible in the context of the intended use." It also confuses me because the completed assignment resulted in the opinion of value being above contract price, albeit 7k above, and the comp they want me to add would bring the opinion of value well under contract price. The comps I used were 0.8 miles, 1.6 miles, 2miles and 3 miles from the subject and were extremely similar substitutes which also bracketed GLA, adjusted sales and overall adjustment percentages. In short they were the best comps available.

My first inclination was to tell them to stop trying to influence assignment results and pay me for what I felt was a job well done. My problem is that I don't want to "bite the hand that feeds me" and it could be that they have legitimate concerns about surrounding subdivision values that I did not find in my research. Before I get blacklisted by my best client by refusing the stip and telling them that I think adding any other comps from a 1 mile radius would produce misleading assignment results, I wanted to get some other perspectives. Am I making too big a deal out of this or thinking about it wrong? How would you handle or have you handled situations like this? Thanks

The Client can certainly ask you to include a specific sale in your adjustment grid. Be clear that it's a sale which may, or may not, be a comparable. The appraiser decides what sales are comparable. Not the Client. I would look at their request as an informal Reconsideration of Value. Grid it if you choose. I might just add comments explaining why the sale provided isn't comparable to the subject or why it wasn't used in your grid.

 

[Tom D]

it's the comp they want me to use that has an in-ground pool, the subject and all other comps have no in-ground pool. I'm going to give them what they ask for and assign no weight to it. This whole thing reeks of realtor influence.

lenders don't want to lower values. it is probable one of CU comps that asked, why wasn't this one used. and yes, i have seen CU pick terrible sales. a good client, and you are complaining about 1 deal. stop the crying and make that sale look good for your value. you can put in as 4,5,6 as a secondary sale and you comment as to why it is not a comparable. i like the 1st level idea being a basement, but you know your area. pools have no value where pools are not common which you explain, they can actually be a negative not wanted factor. so comp sp is lower, your buyer wouldn't have even looked at it, maybe. but CU isn't always that smart. and the lender can override any CU flags. but maybe in this market they are nervous. some days you get the bear and some days the bear get you. just do it and get it out of the way.

 

[Surf Cat]

Isn't the value of my subject is determined by what properties a typical buyer, in the market for properties similar to the subject, would consider acceptable substitutes?

My bold. The sale 3 miles away may be more similar in construction, but it's not in the immediate neighborhood. It's like what J Grant stated earlier in the thread.....it appears you are cherry picking sales. The lender is not convinced as you're skipping over sales in close proximity to the subject. So, they picked one for you.

Stop being stubborn and dig deeper. Also, don't roll over like a dog and just insert the sale the client gave you....Go back in time and find something more suitable and not just within a mile....but the immediate neighborhood. I know I sound like a broken record, but this is what the client wants. Will it be the cream puff the subject is? Possibly not. But more suitable than the bi-level they picked.

It also appears you may be lacking commentary on why you picked the comps you did and why you skipped over sales in the immediate neighborhood.

Not an AMC? Dude.... you can be replaced in a nanosecond. Write the report of your life. Show them that you can provide a thorough analysis.