Ashley Craven
Freshman Member
- Joined
- Sep 15, 2006
- Professional Status
- Appraiser Trainee
- State
- Michigan
I have questions about the adjustment process. I primarily work on commercial reports as a trainee, and I am trying to grasp the most basic principle in appraising. I have tried to research the Lum Library on the Appraisal Institute website and pick appraisers brains, and I'm getting two conflicting schools of thought on the matter.
Idea #1- all adjustments must be extracted from the market via paired sales analysis.
This idea seems really wonderful in theory, but is basically useless due to the market I reside in. I am lucky to find three properties that have sold in the last three or four years that are somewhat similar, let alone identical enough to extract out any sort of data for the adjustment process.
Idea #2- adjustments are more or less subjective, and it takes time and experience.
This makes more sense than the first idea (though it seems like it violates USPAP)? Its nice to know that I think a property having 'X' characteristic is more valuable, but how do I get a dollar or percentage after deciding the characteristic to be superior (or inferior)? I do not have enough experience in the industry to make these conclusions. Also, even if I did arbitrarily pick a number it sure doesn't leave much for me to write in my explanation of adjustments
Idea #1- all adjustments must be extracted from the market via paired sales analysis.
This idea seems really wonderful in theory, but is basically useless due to the market I reside in. I am lucky to find three properties that have sold in the last three or four years that are somewhat similar, let alone identical enough to extract out any sort of data for the adjustment process.
Idea #2- adjustments are more or less subjective, and it takes time and experience.
This makes more sense than the first idea (though it seems like it violates USPAP)? Its nice to know that I think a property having 'X' characteristic is more valuable, but how do I get a dollar or percentage after deciding the characteristic to be superior (or inferior)? I do not have enough experience in the industry to make these conclusions. Also, even if I did arbitrarily pick a number it sure doesn't leave much for me to write in my explanation of adjustments
