Comments on: If I Cannot Support a Small Adjustment, I Just do not Make it

By: Baggins

Baggins — Wed, 11 Feb 2015 18:48:18 +0000

Only when decks and fireplace services become free of charge for me as a home owner, will I quit making those adjustments in the appraisal grid. The proper purpose of the appraisal grid is not to satisfy some one elses expectations regarding appraisal development. The proper purpose of the appraisal grid is to break apart the whole home, and analyze the financial influences of the various little parts. You don’t need any market evidence to prove a deck has worth. All you have to do is call a contractor to get a quote for a new deck. If it had no value, it would be free or carry a labor only charge. Some amenities have limited terms of effective value contribution, like pools, and decks, etc. I think it’s an important point to make that the effective age of the materials has a lot to do with their potential to bolster market valuations for their parent homes. It’s rarely as simple as just pool to pool or deck to deck comparisons. I will continue to pop in penny nickle and dime style generalized adjustments for all the little things, so long as they are not standard market items. If someone bothers to put something nice into their home, they deserve the credit for that, regardless of what some avm computer data base says is the area norm. UCDP is not going to bring any additional security to mortgage backed securities markets, as long as lenders can pass their losses back to tax payers and insurers. If FNMA tracked defaults and denied lender participation based on excessive foreclosure records, then we’d be making progress. Dare anyone to google mortgage servicing fraud. It’s an excercize in futility, because such actions are ongoing. All this focus on the appraisal process is one big smoke screen so the primary participators in real estate don’t have to miss a single step or sacrifice a single dollar. If UCDP was concerned about same neighborhood comparables, it would not have hijacked the line previously used to state neighborhood names, and replaced it with a static letter rating. Any presumption that the commission based lenders will use UCDP data responsibly as a standard, would be illogical. UCDP is synonymous with a government funded AVM. Wake me up if rules which protect appraisers are ever enforced. Good article with a positive message, although I disagree. UCDP is going to change the game, and create an even wider gap in methodology from one appraiser to the next. The government can keep it’s nifty little computer print outs, and the clerk reviewers can get an appraisal license themselves if they think the job can be done better.

By: David Buckley

David Buckley — Tue, 10 Feb 2015 19:33:53 +0000

The adjustment process is all about bracketing, small adjustments can add up and give a better indication of where the value should be in the broad range of things. The very idea that an adjustment can be supported either by match pairs or regression is a complete fallacy and intellectually dis-honest.

By: Bill Cobb

Bill Cobb — Tue, 10 Feb 2015 16:18:35 +0000

This was the entire point of the 7 Hour CU class I took 2 weeks ago and based on conversations I’ve had over the past 3 years with FNMA reviewers. FNMA believes Appraisers are making too many adjustments to comps, especially those smaller adjustments in fields below GLA like for fireplace. In my market, 75%+/- of new homes built don’t have fireplaces anymore. So, should Appraisers be making those $1,000 to $3,000 adjustments for fireplaces we were taught as trainees? Maybe if you’re in the Midwest and it’s a more expensive brick or brick hearth style. What about that famous $5,000 to $10,000 adjustment for IG Pools….is there really support for it? It depends on predominance of pools in that market and buyer expectations. Certainly in some older subdivisions where pools are being filled in, they don’t have value and may have negative value impact because of cost to fill them in. I think what FNMA wants to see is concentration of adjustments on the big items like location, site, view, age, quality, condition and GLA. And honestly, their logic makes sense to me.