I am going with Water-View and would consider including the view and location adjustment into a package so duplicate adjustments are not being made. I try to think how a typical buyer would react in the open market. I have seen homes with great views but the overall location was not as good as others without views. On lake fronts there may be similar comparables with similar views and a view adjustment can be extracted BUT on Ocean front properties with custom homes its rare to find two similar sales with similar views and worse its even harder to find any sales that are similar in age, size and or quality of construction.
The large site built custom homes with Water Views are always difficult because Realtors and Sellers tend to hype the view up and pull some crazy numbers out of their hats. The buyers typically are out looking in spring and summer and they go when the View is at its best. After close of escrow along comes winter and they rarely see anything for 4 to 6 months due to rain or fog, So now its a seasonal view and even in California Lake and Ocean front properties can be real depressing in winter. And how can the appraiser measure that ?
My point is the appraiser has to kinda clear his/her brain because we tend to get to focused on the value of the view rather than teh value of the total location and it takes us down that rabbit trail to appraisal review hell. I like to work it backwards and View and Location adjustments are the last thing I concentrate on because once I have a value on the improvements its easier to now focus on Site elevations, Locations and finally Views.
When I got started I had an-old grumpy MAI who was my boss at a S & L and he called me in one day and said Walker how the hell did you come up with this BS View adjustment ? Of course I quickly responded with well I estimated any adjustments for the physical characteristics of the site, including the view, then I found properties that have similar characteristics and similar views and-after that any adjustments were made for any differences, and the remainder was attributed to the difference in physical characteristics or the view which was $35,000. He laughed and said can you repeat that again because it sounds like something you would try to throw at me and I wasn't born yesterday.
BOOM-NEXT The Chief-MAI screams hey Walker can you replicate that view adjustment for me ? I start to panic because I could not. The MAI says this is plain B.S. and you have no similar comp and views are very subjective so get back to your desk and take that view adjustment out and then cut-it in half and make it under location adjustments. Then he proceeded to tell me that any appraiser especially a stupid one like you can defend a combined View/Location adjustment much easier because, now the appraiser can ramble on about the fantastic location, lake front views and close proximity to the harbor and the reviewers focus is now on the location and not the view. So if he challenges you just tell him that a single line item View Adjustment was to subjective and you had no real matched pairs with similar views so you included the view in location as a package.
I respond with what if our reviewer asks what percentage of my $ 30,000 View/Location adjustment is attributed to the superior view ? The grumpy old MAI says tell the reviewer that 50% View and 50% for the Overall Superior location. I respond with will that fly ? The Grumpy MAI says sure if he doesn't like it then tell him you will change the percentage of the total to 25% view-75% location and throw in the word Site Elevation to further confuse him. I respond with whats this Site Elevation thing all about ? The Grumpy MAI says our reviewer like you is an-idiot and so you take his focus off the view/location adjustments and he will focus on Site Elevations and he has no idea what a Site Elevation is so he will just sign off and be done.
After the report was revised the grumpy old MAI looked it over and said good job knucklehead now when this gets reviewed by one of the other Knuckleheads he can't pin you into a corner or tell you to prove that view adjustment because we both know you cant prove anything because you have no real similar comparables with views. Now if the reviewer asks you to prove your combined view/location adjustment you can defend it all day long and your ebing taught how to wear him out. Here is your your S & L approved standard rebuttal which you can place in your S & L approved adjustment cheat sheets and after a year or so I will give you every canned response to throw at those pesky reviewers.
TO REVIEWER: The appraiser employs a market-based system that relies upon the results of matched pairs when available and a percentage-based system accompanied by sensitivity analysis to assure the amounts that are reconciled the market to the Subject property were neither greater or less than the market called for and would support.
( Note: The appraiser was unable to find more than one similar property which had a similar view or location and therefore in the opinion and judgement of the appraiser he elected to Combine the View-Location adjustments into one single line item adjustment. This was also done so duplicate adjustments were not being made. The appraiser also drove the comparables and took a long careful look to see what Views, Site Elevations and Traffic volumes were like when compared to the Subject property. Finally after a thorough and extensive analysis and making the required and necessary adjustments the combined adjustments made are adequately supported by the data.
Thank You: If you don't like my methodology tell me what the adjustment is and I can revise the report and you can rubber stamp it approved and then forward it back to the old Grumpy MAI so he can also rubber stamp it as approved and then fund this bad-boy because I need my Christmas Bonus like today
