Wide Range of Value Reconciliation

[reelrebel]

Can someone give me some basic examples on reconciling a wide range of value. Example of comps: comp 1 being the best; comp 2 next best; and comp 3 least comparable and given little weight, but supportive. Lots of large gross, line, and net. I'm having a tuff time putting it in to words that would make sense to the reader and myself for that matter. Examples can be of prior appraisals, anything relavent, etc. Thanks for the help. m2:

 

[J Grant]

Does the wide range of value reflect a wide range of unadjusted sale prices? Are u sure about comp 3...if it is so different to be given low weight, why is it there...nothing else around?

What makes comp 1 the best..most like the subject? Least adjustments? Answer for yourself first, then it makes sense to explain to reader.

It relates back to why the comps are what they are and what searches you made for better comps, and why none were found that needed less adjustments. For example, explain features of subject...was it bigger, better view, what is it about subject that resulted in so few similar comps found, that the comps you did find need so many adjustments?

Those answers address the range of value...the range of value reflects market when no better sales were found/available .

If one or two comps are much stronger, reconcile mainly to them and mention comp 3 received little weight (and why).

 

[reelrebel]

limited similar comparable sales in the market. Comp 1 is the best and most similar with fewest adjustment.

 

[Deleted member 80407]

* The indicated adjusted sales range exceeds the norm of 10% to 15% which could not be avoided due to lack of recent comparable sales within the subject's defined market area.

* After considering for differences in (location, view, GLA, condition, BR/BA count, deferred maintenance), the most weight was placed on sale 1 due to having the most recent similarities to the subject with the least amount of net/gross adjustments.

 

[reelrebel]

* The indicated adjusted sales range exceeds the norm of 10% to 15% which could not be avoided due to lack of recent comparable sales within the subject's defined market area.

* After considering for differences in (location, view, GLA, condition, BR/BA count, deferred maintenance), the most weight was placed on sale 1 due to having the most recent similarities to the subject with the least amount of net/gross adjustments.

Thanks James, what I am looking for. Some kind of starting point to bring it all together.

 

[Mike Kennedy]

How wide are the ranges of:

1. unadjusted prices
2. adjusted prices
3. recommend reviewing the adjustments made, and adjustments not made to identify adjustments not made that should have been AND/OR re-adjust the adjustments made to narrow the range of adjusted values.
4. due to either property type, locale, geographic and/or density characteristics of the "Market", expand the comp search beyond "standard time and distance etc." variants to include more directly competitive sales (requiring fewer or lower adjustments) then summarize.

 

[residentialguy]

There are reasons that the adjusted values are not bringing them in close...which is typical for odd properties. You don't have the data to provide a precise quantitative adjustment, so you'll have to rely on qualitative analysis to reconcile this. Comp 1 is superior because... comp 2 is inferior because... etc.

 

[George Hatch]

The place to start talking about a small/diverse market segment or a subject property with atypical attributes for the area is on Pg 1.

A neighborhood summary that actually describes the composition of the neighborhood (including sizes and ages and site attributes) lays out what the neighborhood is actually like. In the event of "small" market segments then commenting on how few properties sell in total conveys that situation.

Be specific. Consider what a summary like this tells your reader before they even get to the site/improvements sections:

The subject's immediate neighborhood is part of a small town with a population of 6,000. Most of the residential neighborhoods were built between 1920-1960 except for a couple of small subdivisions that were added in 1986 and 2000, respectively. The subject property is part of the 1986 subdivision (25 units, with sizes ranging from 1,497 - 2,450 sf)), these homes being larger than most of the older homes and smaller than the homes from the newer subdivision (50 units, 3,100sf - 4,000 sf).

When you talk about the subject's proximate environment first you're providing the context for how well your subject does or doesn't fit in.


You do not want to "surprise" your reader by waiting until the Sales Comparison reconciliation to start talking about your square peg/round hole problem with comps. You want to set them up for that so that when they get to the SC they won't be shocked to see how far you had to extend your search and how much adjusting you had to do to try to reconcile for a value conclusion.

 

[ucbruin]

The place to start talking about a small/diverse market segment or a subject property with atypical attributes for the area is on Pg 1.

A neighborhood summary that actually describes the composition of the neighborhood (including sizes and ages and site attributes) lays out what the neighborhood is actually like. In the event of "small" market segments then commenting on how few properties sell in total conveys that situation.

Be specific. Consider what a summary like this tells your reader before they even get to the site/improvements sections:



When you talk about the subject's proximate environment first you're providing the context for how well your subject does or doesn't fit in.


You do not want to "surprise" your reader by waiting until the Sales Comparison reconciliation to start talking about your square peg/round hole problem with comps. You want to set them up for that so that when they get to the SC they won't be shocked to see how far you had to extend your search and how much adjusting you had to do to try to reconcile for a value conclusion.

Excellent!!!

 

[Amy Perkins]

The subject's market has a wide range of value. The subject is located in a coastal market where the area is built up nearly 100%. There is very little new land available to develop, properties are typically remodeled on a custom level. This is a high cost of living area and the cost of labor is high. The lot sizes vary in this area and large site size adjustments are unavoidable. This is an older area with lots of diversity in regards to quality and condition. The market is very slow at this time, there are few recent sales. Property values are wide in range due to views. These are all examples of why you might have a wide range in your grid.