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Un supported adjustments

litchke

Freshman Member
Joined
Sep 9, 2008
Professional Status
Licensed Appraiser
State
Minnesota
I had a client ( a large nation wide bank) review my report and state that my adjustments were unsupported. I use Synapse by spark which runs multiple analysis and then i attached their results to my report as support. I also outlined throughout the addendum each adjustment that was applied and referenced which analysis was weighted most. So I am confused, what more is the underwriter looking for?
 
Maybe you had the wrong numbers, not the right adjustments, but the wrong lender numbers. Just put an addendum cover page once again referencing your pages where you explained it, or follow the addendum with those pages again. Nothing you can do with stupid.

Non human reviews can't find that info.
 
I had a client ( a large nation wide bank) review my report and state that my adjustments were unsupported. I use Synapse by spark which runs multiple analysis and then i attached their results to my report as support. I also outlined throughout the addendum each adjustment that was applied and referenced which analysis was weighted most. So I am confused, what more is the underwriter looking for?
Maybe spark seems too generic -if you literally take their results and dump them into your report, where is your analysis? How do Spark 's adjustments look on the grid applied to the comps?

Imo, a program like Spark should support the adjustments we extract from our comps and additional similar sales if need be,
 
Maybe you had the wrong numbers, not the right adjustments, but the wrong lender numbers. Just put an addendum cover page once again referencing your pages where you explained it, or follow the addendum with those pages again. Nothing you can do with stupid.

Non human reviews can't find that info.

Absolutely. There has been a marked uptick lately in underwriters with less to do making ridiculous revision requests on nitnoid stuff in order to justify their jobs. It just goes with the times. :unsure:
 
Sounds like they missed it somehow or are getting pressure to ask for more 'proof'. I get these requests too lately, so I simply put something like as referenced in paragraph XX above, and copy/paste what I already stated and bold it. There's been an uptick in these types of requests from everyone. I do everything you do hopefully these will go away soon.
 
I had a client ( a large nation wide bank) review my report and state that my adjustments were unsupported. I use Synapse by spark which runs multiple analysis and then i attached their results to my report as support. I also outlined throughout the addendum each adjustment that was applied and referenced which analysis was weighted most. So I am confused, what more is the underwriter looking for?
Synapse provides a range of calculation methods, including paired sales, grouped data, sensitivity, depreciated cost, different regressions etc. This allows you to select the most relevant and suitable methods for your specific market and property types.

It sounds as if you might be throwing "all" the different methods at them instead of selecting selecting one and then possibly backing it up with another in your conclusion, based on your local knowledge.

If you're running the tool and just slapping in the report what it regurgitates without any analysis, without it making sense between the gross and adjusted sales, you're making it hard for the underwriter to follow you. In other words, you have to do the work.

Another thing I've seen is that some appraisers take the entire zip code with no filters (GLA range, year of construction range, site area, etc.) And slam it through this thing expecting it to give you the magic number.

You "have to" select the specific market area, you "have to" scrub the data of anomalies for the numbers it spits out or it's not going to be any better than pulling from your behind, and guessing.

One last item, you have to sell it. You have to convey to the underwriter, in writing, with your reconciliation of how you came to your conclusion. Of course your report is going to come back to you if the underwriter has to figure it out.
 
In your analysis, did you just say, "Spark/Synapse was used to estimate the adjustments" and then paste in the relevant graphs? If so, that's not really analysis. You need to exxplain how you arrived at each adjustment. It's ok to use Spark, but to Surf's point, did you apply sensitivity analysis, grouped sales analysis, paired sales analysis, regression? When you applied the adjustments, did they tighten the adjusted range or make it more broad? That's what they're looking for.
 
I had a client ( a large nation wide bank) review my report and state that my adjustments were unsupported. I use Synapse by spark which runs multiple analysis and then i attached their results to my report as support. I also outlined throughout the addendum each adjustment that was applied and referenced which analysis was weighted most. So I am confused, what more is the underwriter looking for?
Ask the Underwriter. I haven't seen your report so, I don't know exactly what you did. I do see many reports where the appraiser apparently thinks that writing 'GLA adjusted at $40 per square foot' is support. A statement like that is not adequate to support an adjustment. Appraisers need to state what they did. I doubt the Underwriter is impressed by the name of the analysis software you used. They may, or may not, know what it is or even have heard of it. As alebrewer suggests, the support needs to read something like... 'Adjustments were extracted from market data using linear regression or paired sales or depreciated cost analysis... or whichever of the more than 30 time tested methods is most appropriate.
 
Some of this i put together, a good part came from better brains here than mine, for which i thank them.

A data set may have more than one mode. It is one of the measures of central tendency.

The Appraising Residential Properties, 4th Edition, Appraisal Institute, "Other Quantitative Adjustment Techniques”, Page 344 further states: “…In instances where paired sales analysis is not conclusive, the appraiser may apply judgment to resolve the problem." The adjustments resulting from the appraiser's judgment is based on a study and understanding of historic or past buyer preferences. It further suggests that cost and depreciated cost data may be used with the appraiser arriving at the value contribution (not cost new) of certain features. The process of supporting the contribution of individual variables (features) is limited and often difficult to quantify, with adjustment deemed to be qualitatively supported unless otherwise addressed. All methods of supporting adjustments are usually limited by inherent uncertainties within the applications themselves.

Adjustments, in this report, are based on a combination of Paired Analysis with Sensitivity and/or Trend Analysis & on a study and understanding of historic or past buyer preferences. Support for adjustments may be based on multiple applications and rarely do two methods return identical results with a high degree of accuracy. While not always 'strongly' independently supported, collectively, the adjustments serve to narrow the adjusted value range of the comparables in support of the subject's 'most probable selling price' commensurate with the definition of Market Value set forth herein.

Generally, GLA adjustments are treated as contributory value, not cost to build. The GLA adjustment is the last adjustment made on the market grid. The proper SF (GLA- gross living area) adjustment is that which tightens the range of adjusted values, that results in the smallest range of adjusted values, determined by using simple regression & sensitivity.. I followed the ANSI Z765 standard when I measured the house. However, with obstacles around the house that precludes direct measurements, such as junk, debris, landscaping etc, and set-backs on upper levels or steep inaccessible walls with drop-offs, GLA is estimated and not guaranteed. The ANSI Z765 standard is not intended to supercede any locally imposed system of residential measurement. It may, in many places around the country, challenge longstanding paradigms. The sketch is an approximation, and may not be exact.

If you use regression:
Regression is a better indicator of the final value 'range' and less supportive of the contribution of the independent variables. Any regression model is not weighted into the final value opinion, rather is merely a supplemental tool used to cross-check the reasonableness of the results of Sales Comparison Approach to value. A simple linear analysis was used, with regression on appraiser's “curated” data sale set, giving support to the appraised value. Using regression software for appraiser curated data is as reliable as conventional methods, where as I am instead relying on non-parametric statistics, and of course judgement.

The problem is lender, and their tolerance level. The sensitivity of the underwriter, or reviewer, is based on the tolerance level of the lender. Another one of these requests from the same lender, and it's goodbye to them. I have a low tolerance level for constant stupid. But i only speak from my own way of business, and easy big urban life.
 
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