CCP 04-29-2002 - Laserfiche WebLink

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I 'e I I I I I I I " I I I I I I '- I I Adjustment Process: Ideally, propercies selected for Direct Comparison similar enough that fev>!, II any, adjustments would be In reality, however, few such ideal markets exist, adjustment process is, therefore, highly critical to the of a property chrough Direct Sales Comparison. should be required. and the valuation All adj ustments are based on market trends, characteristics or demands. The appraiser must not permit personal bias to dictate adjustment, nor can the appraiser assume that certain adjustments are "automatic," simply because they are found in other markets or market segments. Common factors which often require adjustment (although not always), are such things as "time elapsed since the sales"; differences in "age and lor condition"; differences in "land to building ratios'; differences in "functional qualities" and, of course, "conditions of sale," which includes terms of financing. In the past few years, adjustments for terms of financing have recei ved much publicity in both the appraisal and the financial industries. Adjustments to "cash equivalency", or at least discussion of the subject, have been mandated by the Office of Thrift Supervision, and are required by numerous other financial institutions not affiliated with the OTS. In cases where such an adjustment is found to be warranted, it should be undertaken prior to the remainder of the adjustments, in order that all sales are analyzed on the same base assumption of cash value. In appraisal texts, as well as in demonstration reports, adjustments are isolated and supported in the market by the use of such devices as "paired sales." In most business reports, these lengthy and often difficult procedures are not undertaken. The appraiser, as a professional and an expert in his/her field, is generally accepted as having both the background, judgment and professional experience to make the appropriate decisions in the adjustment process, without these lengthy support procedures. This is certainly not to imply that the adjustments are not market supportable, but rather that the appraiser is trusted to utilize sound judgment ~n the process, and to be able to provide appropriate support if called upon to do so. The adjustments utilized ~n this report are based on the above considerations and are, based on our judgment and experience, supportable ~n the currenc marketplace. 14