What's with the "appraised value over predominante value for the neighborhood" stip?

[Metamorphic]

Me too. I throw in a comment about median values and standard deviations, and and how the subject falls within the standard distribution of values for the market and they seem happy. Of course its all BS because they have no idea what they are talking about anyway.

See, that's my problem with it. HALF of the homes in the neighborhood are over the predominant. That, in and of itself is such an un-interesting, metric of home and market measurement that you'd have to be desperate for something to write a comment about to even consider it.

If they said "the home is 3 standard deviations from the mean, how marketable is it" that would be a reasonable question. But less than 2 SD's is by definition, not all that unusual.

Also, if you're bracketing the price and all the important amenities in the SCA, the answer to the question of marketability should be obvious. On the other hand, if you're not able to bracket the subject's price and amenities, then hopefully you've said a lot more about marketability than some dumb canned comment.

 

[sputnam]

It's a reviewer (probably an in-house reviewer) considering lender guidelines. To the institutional lenders, the perfect universe has every subject property falling in the middle of the value range for the area. Properties that are worth more than the middle aren't loan worthy...unless of course, the appraiser has made some comment about it. And, it doesn't even have to be an explanation. An acknowledgement that the subject is more valuable than the predominant value will usually do.

I doubt very much that the guideline was written by anyone with significant field appraisal experience.

 

[TC]

Predominant

There is no E at the end.

Sheesh, I leave for a while and this place goes to hell.

 

[residentialguy]

I have a canned comment in my appraisals that covers this. It was a popular stip 15 years ago and it has come back as of 2 or 3 years ago. It is buttcuss, but put in a canned comment and never hear about it again.

Ditto that

 

[444nutman]

There are some clients that require it no matter if the appraised value is one dollar more, which means to me they have no clue about the definition of over improvement.
It gets better. I spoke to a reviewer about 3 to 4 months ago about another issue. We were chatting and he asked me why my predominate value never equaled the appraised value and since he does all the reviews in my area, could I make it easier on him to have my predominate value equal my appraised value like all the other appraisers in my area.
I fell out of my chair, and educated him on the fact.
This long story leads me to my point. Appraisers are now appraising to guidelines.

 

[Metamorphic]

There are some clients that require it no matter if the appraised value is one dollar more, which means to me they have no clue about the definition of over improvement.

That's the sad part. Anybody that's actually competent to appraise (or review the appraisal) a truly over-improved or under-improved property is going to have made such a to-do over the whole thing that some canned comment would be superfluous........ maybe even "over-improved".

 

[Mr Rex]

Probably because the reviewer is used to seeing the predominate value exactly match the subject's value. Amazing how often that happens in reports I see...:new_smile-l:

 

[DMZwerg]

Is that just the weakest cheese reviewer comment ever?

Half of the properties in the neighbored are above the predominant value. And for that matter 1/2 of the properties are below the predominant value.

Not necessarily.
I have seen neighborhoods were 10% or more at AT predominate value. :mellow:


:laugh:

 

[Alan H]

Just for the record.
Predominate means the Mode NOT the Mean nor the Median, therefore it is the number which appears most often in a dataset.
So in the case of the URAR the Predominent is the sales price which has appeared most often in the neighborhood within the timeframe that you choose as the sample of the neighborhood.
I include a simple statement in every appraisal where my Opinion of Value is above or below the Predominant Sales Price: "Although Opinion of Value differs from the Predominant Price within the Neighborhood, The Opinion of Value is significantly within the Low and High ends of the Price Range for the neighborhood and is therefore not considered either an over-improvement nor an under-improvement in this neighborhood".

 

[DMZwerg]

Just for the record.
Predominate means the Mode NOT the Mean nor the Median, therefore it is the number which appears most often in a dataset.

Yeah, but I was hoping he would figure that one out for himself.
Last appraisal I did the predominate age was <10 years old but the oldest was 150+ years old. I think 70% of the homes in that neighborhood were constructed between 2000 and 2005.