Why can't we band together on Feb 4th?

[sputnam]

Appraisers aren’t the ones looking for shortcuts. Shortcuts would be sending unlicensed people out to do appraisal inspections. Shortcuts would be just waiving the entire process altogether. Shortcuts would be looking for a cheaper system where their AMC friends can make more money at the same time hammering the ever loving **** out of the appraiser for more nonsense.

True... but appraisers are the ones that sometimes... are taking the shortcuts. And there are lots of shortcuts that get taken. Be honest... not with me or the forum... with yourself. When is the last time you actually extracted a fireplace adjustment from the market data for the appraisal assignment?

 

[chad hampton]

Haven’t made a fireplace adjustment in over a decade. But I agree some appraisers are better than others. That’s true of every profession.

 

[Fernando]

Haven’t made a fireplace adjustment in over a decade. But I agree some appraisers are better than others. That’s true of every profession.

I made fireplace adjustments when I first started appraising. What was I thinking.
Well, times have changed. Environmentalists don't like fire burning chimneys.

 

[Terrel L. Shields]

When is the last time you actually extracted a fireplace adjustment from the market data for the appraisal assignment?

When I first started, I made a fireplace adjustment occasionally. But when I adopted MLR techniques I used dummy numbers and tried to extract a value - 0 (no fireplace), 1 (fireplace). And the results opened my eyes. First my R square went to pot and secondly, the indicated value could be -15,000 to plus 50,000 or so. Made absolutely no sense. OTOH, brick exterior was a good proxy for quality and most brick houses seemed to have fireplaces. So, the adjustment was an overall adjustment for quality rather than simply having brick siding. In the end, the primary items of value except land and outbuildings, pools etc, was SF size, effective age, bedrooms, bathrooms, brick or not brick (again 0,1 input), and garage capacity. This provided sufficient adjustments to close the gaps between comps and resulted in a small range from which to pick a number based on the most similar comp. Over the years, I tend to find homes that have the same bed and bath count and hopefully same garage capacity and thus size and effective age are the dominant adjustments I make besides land value and any adjustment for outbuildings, pools, etc.

 

[sputnam]

Sheeesh.... My 'fireplace' comment was an example to illustrate a point. It wasn't the point.

 

[alebrewer]

You also mean Alsie 35 and Alebrewer.

That hurts a little, Fern.

 

[DWiley]

It was good that Fannie has clarified what it wanted - a 12 month analysis. It's a start in setting a standard for appraisers.

Just to be clear, the 12 month analysis should be the basis for the response on page 1 of the URAR indicating the price trend (stable, increasing or declining). So, if prices have risen over the past 12 months, then the trend would be indicated as "increasing."

As you noted, this clarification was made because research with appraisers found that no consistent methodology was being applied.

Also, just because the trend is increasing, that does not necessarily mean market condition (time) adjustments must be applied to every comp. Consider a market where over the past 12 months prices increased for the first 6 months and then were stable over the next 6 months. The report would state that prices were increasing, because that is the year-over-year trend. But, for comps that sold during the the most recent six months (the period when prices were stable), no market conditions (time) adjustment would be applied.

 

[Bobby Bucks]

Sheeesh.... My 'fireplace' comment was an example to illustrate a point. It wasn't the point.

Most understood your point, however; the gentleman on the west coast with a fondness for Teslas is eager for a number rounded to the nearest thousand that can be inserted in the URAR.

 

[chad hampton]

In some markets I’m sure a fireplace adjustment is necessary. And might be significant. In the north I wouldn’t buy a home without one. Local experience and geo competency is everything in this profession.

 

[alebrewer]

Most definitely its important to understand a particular market's preferences. The decision to adjust or not, though, should be made for each assignment - not as a general rule of thumb. And the methodology for said adjustment should be quantifying support for the adjustment. To Terrel's point, if adding that variable into the regression results in janky R's or a larger residual, or low t (not testosterone), etc., then fireplace shouldn't be an element of comparison. In Texas - that will generally be the case, unless - again to Terrel's point - you could transform 'quality' into a binary variable and add that to the model. In any case, some data sets may suggest fireplace adjustment and others not. That's part of the analysis.