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trend anaylsis adjustments

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Renee Borne

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I am using the xcel spread sheet. I purchased the "nuts and bolts" instructions by Anthony Young.

I have a question about applying his calculation. On the cd his pool adjustment was 11%. Now do you multiply the 11% by the sale price of the comp Ex: SP $800,000 than pool = $88,000. Would I make an adjustment of 88k or would I just put the % amount in the grid and let the software do all the work. Is it 11% of the SP?

The reason I am confused is if I had a pool adjustment of 11% then let say I had a Garage adjustment of 6%. My adjustments start adding up including SF, etc. I think a reviewer's head might explode. I know if that is the amount than that is it and I can back it up.

I was not tought this way so seeing such high adjustments are a little un-nerving.

any web sites to help me is appreciated.

thanks
 

Dennis J. Black ASA IFAS

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If the instructions are suggesting that pool adjustments should be a percentage of sale price I would throw away the instructions.
 

Terrel L. Shields

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Is that a "trend analysis'? sounds like you are doing a regression analysis.

My regressions would tend to have an adjustment appropriate to the adjustment I use, not percentages.
 

Artemis Fowl

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You have to have seen the pool. Would you pay $88,000 for it?
 

Michigan CG

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If the instructions are suggesting that pool adjustments should be a percentage of sale price I would throw away the instructions.

I wouldn't throw them away, I would tear them up first, and then throw them away or use in the guinea pig cage for bedding.
 

Metamorphic

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Anthony would be the first to tell you that the regression analysis is just a perspective on the market. Once you're done with that analysis, you have to put your appraiser back on and say "is this reasonable", "does it make sense".

Particularly when you first start playing with these techniques, you have to be real careful to make sure you're calculating things properly, that your data set is appropriate. Large enough to have statistical validity, narrow enough to pertain to your subject. If you get to crazy with it you can introduce bias into the samples that can be very misleading. One thing that helps if you're not sure is repeat the analysis with a larger neighborhood, then a smaller one, then a more generous filter size around the subject, then a more strict filter. If you get more or less the same answer it supports the idea that you're correctly measuring the market.

If you're doing a pool analysis, you're probably going to be comparing the $/sf of properties with and without pools to see if there's some sort of consistent price differential. You'll have a trend line for the no pools, and a trend line for the pools. The average gap between those 2 lines, scaled off of the Y axis, would be the $/sf adjustment. Multiply that by the size of the subject and you'd have a dollar value adjustment to stick on one of the blank lines at the bottom.

Its not clear from your OP if you're talking about Anthony's example, or if you actually calculated an $88k pool. If you did get something that high, I'd suspect you have some other factor in your data set you haven't controlled for. Like maybe a preponderance of the pool houses are in a better neighborhood, or have higher quality, better views, newer, etc. I could see that kind of pool adjustment if you're talking multi-million dollar homes where the pool is custom and integrated into extensive landscaping, pool house, spa, playboy bunnies, etc.
 

Metamorphic

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If the instructions are suggesting that pool adjustments should be a percentage of sale price I would throw away the instructions.

The concept is not entirely inappropriate.

Its been my experience that the higher end the home, the higher end the pool behind it is. So expressing it as a percentage of price would allow the adjustment to scale with house size which seems reasonable.
 

Dennis J. Black ASA IFAS

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Tim,

Shame on you. You are not seeing the big picture. Your suggestion may just lead to the guinea pig reading the instructions, attending some crap qualifying education, moving to a state with lax application review and next thing you know the little critter is churning out reports. After all, with a digital signature there is no need for the appraiser to be evolved to the point of opposable thumbs.
 
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Dennis J. Black ASA IFAS

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Metamorphic,

I think we all agree that higher value homes would tend to have higher value pools, but to suggest that such an variable is best addressed by a percentage methodolgy does not hold water. The primary problem is that such a method would incorrectly address the balance of the agents of production.
 

Ms. Janet

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Tim,

Shame on you. You are not seeing the big picture. Your suggestion may just lead to the guinea pig reading the instructions, attending some crap qualifying education, moving to a state with lax application review and next thing you know the little critter is churning out reports. After all, with a digital signature there is no need for the appraiser to be evolved to the point of opposable thumbs.


:rof::rof::rof::rof:
 
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