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Ranking Prevalence and Value Impact of Appraisal Adjustments

Monday, October 19, 2015

In a recent post on its blog CoreLogic points out it is the rare appraiser who comes up with a perfect comp - i.e. a house of the same size and condition, close to the subject property, with similar amenities and that has recently sold.  Therefore adjustments must be made.  And in fact they are made in 99.8 percent of appraisals.

Adjustments credit or debit the subject property for the existence or absence of given features.  Jon Weirks, writing the Insights article, uses the example of a deck being one thing that distinguishes the subject from a close comp.  The comp has one, the subject does not.  The appraiser would determine the value of the deck and subtract it from the comparison property's sale value - arriving at an approximation of what that comp would have sold for without a deck.  Conversely if the subject had a deck and the comp did not, the value of the deck would be added to the sale price of the comp.

 

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