The word "Average" in the improvements section - possible bias?

[Terrel L. Shields]

Seems to me that to describe a house in cold factual terms leaves one rather uninformed as to what the house really looks like and how it compares to the neighborhood and comparables. A sterile description of the improvements doesn't paint a particularly great picture.

The house was built in 1992. The 2 ton AC was replaced in 2010. The roof is metal over shingles. Original shingles were damaged in 2003 by storm and the roof replaced at that time. A few specks of rust noted on the roof. The soffits are painted plywood with aluminum covering the exposed wood. The attic has blown in insulation that appears to be settling some. There were no visible broken trusses. The siding is vinyl, and one side reportedly was hail damaged and replaced in 2019. There were several holes noted in the vinyl siding possibly from pebbles thrown by a mower. The windows were replaced in 2004 with vinyl Simington single hung, double pane. The entry door shows signs of rust. The rear screen door handle is broken and tied in place.​

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The interior is sheetrock and never been repainted. The ceiling is wood decorative 'car siding'. There was a water spot in the rear bathroom and bedroom where it leaked when the roof was damaged. The landline phone is disconnected. The fireplace is 8' wide and brick with an insert. 5 ceiling fans all work. There is a damaged door on the cabinets which are knotty pine. The sink is stainless steel. The appliances are dated colors but appear to function. The kitchen light is out. The 110v smoke detector is missing but a 9v unit is in the hall. Interior doors are six panel. A closet light does not work. There is no crown molding. The trim is painted. The carpet is reported to be original but in fair condition and no frayed places. The vinyl floor covering show some cuts. The bathrooms are 3 fixture, with all fixtures original except one faucet.​

 

[Surf Cat]

Seems to me that to describe a house in cold factual terms leaves one rather uninformed as to what the house really looks like and how it compares to the neighborhood and comparables. A sterile description of the improvements doesn't paint a particularly great picture.

The house was built in 1992. The 2 ton AC was replaced in 2010. The roof is metal over shingles. Original shingles were damaged in 2003 by storm and the roof replaced at that time. A few specks of rust noted on the roof. The soffits are painted plywood with aluminum covering the exposed wood. The attic has blown in insulation that appears to be settling some. There were no visible broken trusses. The siding is vinyl, and one side reportedly was hail damaged and replaced in 2019. There were several holes noted in the vinyl siding possibly from pebbles thrown by a mower. The windows were replaced in 2004 with vinyl Simington single hung, double pane. The entry door shows signs of rust. The rear screen door handle is broken and tied in place.​

​

The interior is sheetrock and never been repainted. The ceiling is wood decorative 'car siding'. There was a water spot in the rear bathroom and bedroom where it leaked when the roof was damaged. The landline phone is disconnected. The fireplace is 8' wide and brick with an insert. 5 ceiling fans all work. There is a damaged door on the cabinets which are knotty pine. The sink is stainless steel. The appliances are dated colors but appear to function. The kitchen light is out. The 110v smoke detector is missing but a 9v unit is in the hall. Interior doors are six panel. A closet light does not work. There is no crown molding. The trim is painted. The carpet is reported to be original but in fair condition and no frayed places. The vinyl floor covering show some cuts. The bathrooms are 3 fixture, with all fixtures original except one faucet.​

That's Average.....Oh wait...

 

[Terrel L. Shields]

That's Average.....Oh wait...

Or, typical I would reckon. So, the only thing we are left with is to do one of two things, right? A- we can make our own subjective estimate of the Observed effective age and total economic life... or, B-we can use the comparables to extract their effective ages and assign them as proxy for our subject's effective age. I fail to see why/how that subjective determination is any worse than making "subjective?" statements about quality. Ironically, in the 1990s, FHA review appraisers (from FHA not teachers from elsewhere) were telling us they wanted a comparative analysis of the comps to the subject, and we should use "Superior" "Equal" and "Inferior" in the grid and we should describe items as Excellent, Good, Average, Fair, and Poor.

Someone tell me again how that all those appraisals back then were so inaccurate compared to the valuation of property today under FNMA mandates.

 

[Tom D]

I'm funny confused. Thw word average is not to be used in terms of the neighborhood, it's surrounding or it's flavor.
I haven't seen anywhere that it can't be used for physical material descriptions. And i get the anal stuff to read from some AMC.
Are we off the track here from boredom and lack of work.
I have been reading this thread knowing some brilliant thinking from some of yous would give me a condition word to use.
This thread has lost me.
An avm gives you a simple number for simple minds to understand. We are going in a different dirrection with these edicts of rightness.

 

[RCA]

Yes, that is correct, as explained in the UAD materials. However, there are also other sections of the Selling Guide that lenders must also adhere to, and one of those is 5603.4, which specifically identifies as unacceptable appraisal practice:

Use of unsupported or subjective terms or statements to assess or rate, such as, but not limited to, “high,” “low,” “good,” “bad,” “fair,” “poor,” “strong,” “weak,” “rapid,” “slow,” “fast” or “average” without providing a foundation for analysis and contextual information

Does that connect the dots for you, or can we all just expect another ad hominem laced rant?

Absolutely not. All of the adjustments, for both measured and unmeasured variables, must be tied to the net sale price, the adjusted sales prices and the SCA value conclusion - unequivocally - and your method needs to be subject to mathematical proofs.

So you are so far from understanding this, despite your degree in mathematics, it is absurd. Ad hominem? Well, it is just a question of time before I make your statement more ludicrous than you can imagine.

At least you have the courage to respond. I thought maybe you had me on ignore. I find it hard to believe you haven't figured out the math yet. But, yeah, I guess we can't be that surprised.

Certainly, within the unmeasured variables, you can have a certain amount of explanatory adjustments so that the appraiser can explain as well as possible why the residual is what it is. Whatever he does, his residual or subjective adjustments for the unmeasured variables such as condition, quality, functional utility - or whatever he feels is appopriate must be derived from corresponding value contributions for these variables. -and the sum of such value contributions must exactly equal the residual for that property with the sum of the measured value contributions equaling the regression price estimate for the property and the sum of both subtotals equal to the net sale price. In this case, if the work is done correctly all adjusted sale prices will be exactly equal - no weighting required - and would equal as well the final value conclusion from the SCA. That is all dots connected.

 

[RCA]

Absolutely not. All of the adjustments, for both measured and unmeasured variables, must be tied to the net sale price, the adjusted sales prices and the SCA value conclusion - unequivocally - and your method needs to be subject to mathematical proofs.

So you are so far from understanding this, despite your degree in mathematics, it is absurd. Ad hominem? Well, it is just a question of time before I make your statement more ludicrous than you can imagine.

At least you have the courage to respond. I thought maybe you had me on ignore. I find it hard to believe you haven't figured out the math yet. But, yeah, I guess we can't be that surprised.

Certainly, within the unmeasured variables, you can have a certain amount of explanatory adjustments so that the appraiser can explain as well as possible why the residual is what it is. Whatever he does, his residual or subjective adjustments for the unmeasured variables such as condition, quality, functional utility - or whatever he feels is appopriate must be derived from corresponding value contributions for these variables. -and the sum of such value contributions must exactly equal the residual for that property with the sum of the measured value contributions equaling the regression price estimate for the property and the sum of both subtotals equal to the net sale price. In this case, if the work is done correctly all adjusted sale prices will be exactly equal - no weighting required - and would equal as well the final value conclusion from the SCA. That is all dots connected.

View attachment 89757

I have left out the method for deriving the subject residual. It would be nicest to put in a real example, with real comparables (addresses) so that you could access the photos of the 100+ comparables that went into the analysis - with 6-12 comparables in the sales grid. And I do have many real appraisals to choose from. But there is a problem: In this method, you wind up scoring the 100+ comparables as in a beauty contest, - although this is completely and objectively done by the R program ..... But do you think I want to publish quality/condition/aesthetics(design)/etc for 100+ properties? No, that would be a major liability. Besides, I think it better to leave something for the reader to figure out at this point. I have given you enough of what is necessary, to bring the idiots in the profession to their knees.

 

[J Grant]

I'm funny confused. Thw word average is not to be used in terms of the neighborhood, it's surrounding or it's flavor.
I haven't seen anywhere that it can't be used for physical material descriptions. And i get the anal stuff to read from some AMC.
Are we off the track here from boredom and lack of work.
I have been reading this thread knowing some brilliant thinking from some of yous would give me a condition word to use.
This thread has lost me.
An avm gives you a simple number for simple minds to understand. We are going in a different dirrection with these edicts of rightness.

It is my opinion that the GSE's want to make appraisals so impossible to execute correctly and so vulnerable to a complaint for a petty housekeeping issue that their use will be untenable. Meanwhile, it is the appraisal, and only the appraisal, that communicates with the users WHY the value is what it is and HOW it was developed in plain language. That is impossible to do with simple words decreed as "subjective "- even when a context is provided.

The UAD should strike that sentence about words such as higher, lower,, average etc, rather than making appraisres turn themselves into pretzels either avoiding those words or being so caution with them that the appraisal becomes meaningless. Even with a context provided.

 

[Dublin ohio]

It is my opinion that the GSE's want to make appraisals so impossible to execute correctly and so vulnerable to a complaint for a petty housekeeping issue that their use will be untenable. Meanwhile, it is the appraisal, and only the appraisal, that communicates with the users WHY the value is what it is and HOW it was developed in plain language. That is impossible to do with simple words decreed as "subjective "- even when a context is provided.

The UAD should strike that sentence about words such as higher, lower,, average etc, rather than making appraisres turn themselves into pretzels either avoiding those words or being so caution with them that the appraisal becomes meaningless. Even with a context provided.

It is not that difficult to use words like "average" in the proper context. I just don't see why so many make it an issue. The only thing I see standing in the way is that some have a problem changing their mindset.

 

[Carnivore]

Average is an objective term. It's a statistical constant that represents a single value within a range of data that describes the whole. Objective terms are based on facts that are not influenced by personal beliefs or biases.

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Be objective when writing things like summaries or news articles, but feel free to be subjective for arguments and opinions.

So your Opinion of market Value in a 1004 is Subjective!

That is why Homeowners and others often don't agree with your Opinion.

 

[RCA]

Average is an objective term. It's a statistical constant that represents a single value within a range of data that describes the whole. Objective terms are based on facts that are not influenced by personal beliefs or biases.

Average can be considered objective if you use it in reference to a set of data according to its statistical definition. But note in this context it can also be called a relative term, as it is relative to a specific population. However, the term is often used in ambiguous way when describing features that don’t have an exact numerical measure. This often happens in appraisal because so many thing such as features are neither nor - they are in a grey area. In such cases “average” is definitely very subjective.

GSE appraisal standards (or guidelines as they call them) are dead poor at the core. Both Appraisal Institute and GSE will often tell you that the C1-C6 and Q1-Q6 ratings are “absolute” definitions. However if you look at the definitions of these ratings they are replete with undefined imprecise adjectives such as “many” and “significant.” Such people have told me that what they mean by “absolute” is that C4 in the Silicon Valley is C4 in Jackson, Mississippi. Well the problem is that is based on terms such as “many” and “significant” that really produce different results with boundary cases in these two quite different areas. Aside from the fact that UAD definitions are often useless for valuation, they are, generally speaking rubbish terms. They are garbage.

So much better to say: My market area is The City of Pacifica, CA and is represented by the MLS sales from 1/1/2015 to 8/1/2024, downloaded to file X. The Condition-Quality-Appeal Scores are 0.00 - 10.00, representing the percentage of properties in this data set or market area with lower scores. I get this score by ranking the properties by residual from lowest to highest and then assogning them a score that represents the percentage of properties lower in the ranking based on the premise that less appealing properties sell for less than predicted by the
MARS regression model and more appealing properties sell for more than predicted by the regression model.