Apraisal adjustements by region

10 Replies

Does anyone have any resources that can be used to access values for adjustments to be made when making appraisals in different areas.

I know that a pool or an extra bedroom in San Diego, California will merit a different deduction then Orlando, FL, but how much exactly?

Is there a public database for this kind of information that I can look up online or any other source?

Thanks in advance!

As an appraiser I can tell you there is no national database for adjustments, and if there was it would probably be illegal, if you have questions regarding a specific property or say a two car garage vs. a property with no garages, you should call a local appraiser to get their input...just my opinion !

Bill,

Thanks for your input.

Just curious, why would it be illegal? Seems like it could be a tool to fix a lot of variation in this industry?

Originally posted by @Bill Fennelly :

As an appraiser I can tell you there is no national database for adjustments, and if there was it would probably be illegal, if you have questions regarding a specific property or say a two car garage vs. a property with no garages, you should call a local appraiser to get their input...just my opinion !

Exactly...

One other suggestion I would add -- find some local investors and ask if you can have copies of any recent appraisals they had done.  Use those to determine what the typical adjustments are in your area.

I basically collect appraisals -- I get as many as I can to parse through and determine what is typical for my area(s)...

That's a great advice! Thank you J Scott!

@J Scott

 ahhhh I need to start doing this! I have been finding what might be great deals in odd areas that I do not know, and I feel like if i started a collection by zips this could really help.

Might as well utilize this network of title agent friends!

@Olga Levin

 

Bill,

Thanks for your input.

Just curious, why would it be illegal? Seems like it could be a tool to fix a lot of variation in this industry?

Olga,

My opinion is that a national standard for adjustments would take the objectivity right out of the appraisal analysis, for example a 2 car garage in Florida somewhere with a $120,000 house would not be worth the same as a two car garage at a house in La Jolla, CA at a property priced at $2,500,000.  Plus, land costs / values and construction costs / materials and labor are dramatically different throughout the country, so a set standard wouldn't apply.

For the sake of argument here, I refer to a term that I use quite a bit which is a "test of reasonableness".  Is it reasonable that a Buyer would pay $20,000 more for a home with a 2 car attached garage vs. the same home with no garage, quite possibly depending on the market area, would a reasonable Buyer pay $50,000 more for that same house with the two car garages, probably not if its the aforementioned $120,000 house in FLA and that same 2 car garage could be built new for $18,000...but in La Jolla, CA that $50,000 could be a deal and an able and willing Buyer would considered the pricing difference more than reasonable.

Hope that helps some, and...just my opinion !

Bill    

@J Scott

That's a great idea to keep and/or collect appraisal where possible, I bet there are those that barely even look at their appraisals that close when they come in.

Have a good weekend !

@Bill Fennelly

I completely agree with you that it will not make sense to apply the same values in different regions. I was thinking about a database that has different values for different cities which is based on the numbers that local appraisers are using. Do you think that would be illegal?

@Olga Levin

I completely agree with you that it will not make sense to apply the same values in different regions. I was thinking about a database that has different values for different cities which is based on the numbers that local appraisers are using. Do you think that would be illegal?

The powers to be at Fannie Mae & Freddie Mac, and the federal government would very likely take issue with such an approach, even though they track and secure data from appraisals on a national level for their research and review. 

It would take out the objectivity of the analysis as well. I live in a town with a median price point of $650,000, and a neighboring town with a median price point of $350,000 (example), the same two car garage adjustment would very likely be different in these two towns which border each other, and say the two properties being appraised could be 3 miles away from each other...the same could hold true for properties within the same town.

Often times adjustments can be based on the price band or level, ie. low end vs. high end, having an understanding of market conditions, gut feel (non quantifiable), market expectations, a test of reasonableness, and a host of other reasons.

There are cost manuals such as Marshall & Swift that can provide you with replacement cost data for various regions that may be somewhat helpful, just an idea and just my opinion !

Have a nice weekend...

appraisals are based …on market prices which are dynamic and are constantly changing. How can you create a constant? 

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