Residential real estate appraisal question?

Question

When using the comparable sales approach, where does the adjustment rate come from? Is it a standard rate for an area? or an average rate? or best guess? or ?????

For example, if the comp property is 100 square feet smaller than the subject property and the adjustment is $48 per square foot, then the total adjustment is +$4800.

From where does the $48 in this example come?

Thanks in advance.

Answer 1

The $48 per square foot is an estimate of value per square foot of building area. As an appraiser myself in NY it depends what area but we use use around $100 per square foot. The figure is derived from land residual techniques or market extraction. When a property sells for say $500,000 for a 2,000 sf home it can be broken down like this example:
Land Value $300,000 (based on comps of vacant lots or tear down properties)
Improvements $200,000
Complete Value $500,000

You would next divide $200,000/2,000 SF= $100/sf

We just don't pull the number out of a hat. Every area is different and there is no rule of thumb. In some areas the land is worth a higher percentage of the value than the improvements and it works vice versa. In NY where I'm from the land is worth 60-75% of the total property value.

Answer 2

A price opinion that a Broker does, is not an apples for apples comparison like an appraisal. The figures we use to adjust are based on the area (county) most times that the property is in.

Answer 3

it may never take place, in keeping with federal regulation. The appraiser isn't allowed to talk to sources proprietor or all people concerning to the appraisal different than the lender. you may desire to get carry of a duplicate of the appraisal from the lender and that they could desire to grant you a duplicate in keeping with the reality in Lending act. The appraiser can no longer deliver you a duplicate.

Answer 4

Appraisers have guidelines that they use, but appraisals are just opinions and can very greatly.

Realtors do price opinions for free using basically the same, but less detailed methods, and it's always good to get at least 3 opinions before selling, etc.