13 Mar Appraiser Adjustments – How We Find Your Home’s Value
Many appraisers have difficulty when deciding how to make adjustments for various subject versus comparable data differences. These adjustments are made on an appraisal form grid, and are done based on realistic differences in the market, as well as the opinion of the appraiser. adjustments can be confusing because they seem somewhat arbitrary . That is to say, any two or more appraisers given the same data on a form would make a different adjustment based on their own opinion. The somewhat confusing aspect of appraising, to the non-appraiser, is there does not seem to be any right or wrong in the area of adjustments.
For instance, a difference of square footage for a lower end home could run anywhere from $25 per square foot to $50 per square foot, depending on the whim of the appraiser. Another example of differences in appropriate appraisal adjustments and methodology is age-related difference. Some appraisers claim that there is a direct correspondence between the years difference in age between the subject and comparable sales; however, this does not always proved to be the case. There can be as much as a 5% percent variance for appraisal adjustments regarding age. Most appraisers take a very realistic approach regarding age adjustments. Homes can be adjusted at, for example, $1000 or $2000 per year difference. Quality design and appeal adjustments are also very nebulous, and can cause some confusion to the reader of the appraisal report.
Typically for a design and appeal difference the appraiser refers the reader to the pictures in the appraisal report. This allows the reader to ascertain the reasonableness and conjecture of an appraiser’s market difference. Sometimes this will show a home that is shaped like a box, as opposed to a home with more dimensions; or this can show a shake roof or a composition shingle roof.
Both of which would have differences in market appeal, and therefore would warrant and an adjustment. Any two appraisers can have very different grid adjustments such as location, age, square footage, lot size, and amenities; however, at the end of the day, appraisal reports usually have very similar estimates of value. relocation companies usually will accept an appraisal between two appraisers of the same assignment and within 5% of value of one another. This is common in the industry and recognizes the fact that real estate appraising is not a science, but is more of an art form.