You can do rough math on similar tract houses between 10 and 25 years old based on short lived items such as roofs.

You’ve just given me a headache…

What’s the discounted rate of your multiplier and yada yada yada over under noi irv, and where the hell is my whiskey!

Simple is better. These are individual homes and we’re dealing with as is market value, not projected capitalization rate or whatever.

“I have applied a nominal but expected age adjustment, and focused more on the individual aspects of comparison and adjustment.”

Old, 100 per year, new, up to 500 per year.

Easy.

“Effective age” is better indicated as a C line or individual line item for quality of materials adjustment. Rather than play with effective ages just apply generalized reasonable market reaction estimates for the differences a buyer would pay for these deficient, superior, or inferior, whatever, aspects of an individual home.

I don’t like effective age, it presumes consistency in care but that’s not how people really manage their individual homes.

One guy will spend all his time outside and the exterior will be great, interior trashed. The next guy upgrades half is house and never finishes. The next guy all bells and whistles but never shells out the utility updates because they prefer to only spend a few thousand at a time and never actually afford the 10k for new electric panel revamp or whatever.

Individual line item adjustments are the winning play where the rubber hits the road. Effective age analysis is a tool for those looking in from far distances. Appraisers whom have been on site don’t need such loosely defined estimates, we would rather deal with verifiable individual facts and parsed but reasonable estimates for those individual considerations.

Welcome to the brave new world of collateral underwriter and digital review tools anyone can use. Red flag; there is an adjustment for this but not for that, and an observable difference for both. Red flag, the appraiser has shown a pattern of such inconsistent adjustments. Just tag in the minor adjustments to appease the digi reviewer and then go back to the art not a science approach. Otherwise there will be no end to the pushback and having to educate the next assignment clerk.

Amen!!

Well said…..we need more lines….. I learned in county where effective age adjustments were absolutely necessary, I no longer cover that County…….moved to a not so rural area, almost no competition.

My point was that the computers cannot figure out effective age adjustments.

Chris….no one ‘removed’ Effective Age adjustments (when using UAD). What FNMA said early on is don’t make an EA adjustment on the Age line. You can make a EA adjustment on one of the blank lines if you choose to use that. I don’t make EA adjustments at all, because those are SUBJECTIVE and not really based on market evidence. Age and Condition related to the same items and are subjects of depreciation.  Normally I only make an Age adjustment between properties because typically the Condition between properties is roughly the same. Age is quantifiable. Condition also has subjectivity injected.

yup…and the principal of contribution. I have reviewed many. It doesn’t matter what path the appraiser walks, we should all be able to get to the right market value within a few 1,000.

I believe you mean principle of substitution.

Exactly! This is a significant figures question and in my humble opinion market reaction can not be measured that precisely. I round all my adjustments to the nearest hundred and my final value opinion to the nearest thousand.

Also does anybody remember effective age, I wonder why they removed effective age from our appraisal reports.

Effective age adjustments would really mess up their computer derived adjustments for C1, C2, C3 C4 C5 C6 adjustments

That was the exact thing that caught my eye before anything else. $100 adjustment? Really? Is your ego so big that you can nail a market difference to within $100? Wow! I don’t even make and adjustment for anything less than $1,000.