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The Appraiser Coach Podcast

Listen while you drive to and from appraisal inspections as Dustin Harris, The Appraiser Coach, gives you helpful tips, tricks, ideas, and principles which will make you a better appraisal business owner. Dustin has been a successful real estate appraiser for many years. As the Appraiser Coach, he has made it his life’s mission to teach other appraisers across the country to also succeed and thrive as real estate appraisal business owners. Join Dustin each week as he keeps you informed with the latest in the appraisal profession, interviews movers and shakers, talks to your peers about what is important to them, and shares with you his secrets to incredible success.

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148 Should We Really Be Making Adjustments?

Aug 17, 2016

An appraiser inspects the subject.  An appraiser chooses comparables.  An appraiser makes adjustments.  An appraiser reconciles the report.  Right?  What if an appraiser did not make adjustments?  Would it change the outcome?  How accurate would appraisals be without the adjustments?  Can you support your adjustments?  I mean REALLY support your adjustments?  

Show Archived Comments

Don
seven and a half years ago

Agree. More like this than that is real. Some things like acreage can be extracted, however condition is really not market derived since the way in which you make the update/repair and the labor and materials is so subjective. I redid a kitchen for about $5,000. Had estimates from $4,000 to $10,000. What would the buyer create in their mind about what it would take to make equivalency? Would they over compensate? Condition adjustments are so not market driven.

Doug
almost eight years ago

Thanks for your semi-strawman podcast on adjustments. Here are a few things to consider:

1). You did do adjustments, just in your head and on the paper. If you are arguing that you don't need/want them in the report, then that should probably more clear. You should also figure out another semi-strawman about how developing the adjustments and not reporting is the most credible solution.

2). Most importantly, the only reason that you were able to complete your exercise by selecting the best comps is because you had prior/past knowledge of what features have market value. You got this through adjustments that your have figured out in the recent past. If you truly stropped figuring out adjustments, then your ability to correctly selected the best comps would fade over time and became farther from current market. Without the regression, matched pairs or other methods of analysis, you will become an RE Agent (sorry for the harsh equivalency).

The instructions on the top of the 1007 are pretty good... which instruct to make macro/major adjustments that are well-seeded in the market. We have all seen report that adjust on nearly every line that go too far, but not doing any is probably too far the other way.