https://activerain.com/blogs/houseval en-us https://activerain.com/blogsview/2399141/what-is-a-bedroom-- I am periodically asked if a room qualifies as a bedroom. There are a number of sources I refer to for the answer. First, is the International Building Code (IBC). "The International Building Code (IBC) is a model building code developed by the International Code Council (ICC). It has been adopted throughout most of the United States. Since the early 1900s, the system of building regulations in the United States was based on model building codes developed by three regional model code groups. The codes developed by the Building Officials Code Administrators International (BOCA) were used on the East Coast and throughout the Midwest Since the early 1900s, the system of building regulations in the United States was based on model building codes developed by three regional model code groups. The codes developed by the Building Officials Code Administrators International (BOCA) were used on the East Coast and throughout the Midwest of the United States, while the codes from the Southern Building Code Congress International (SBCCI) were used in the Southeast and the codes published by the International Conference of Building Officials (ICBO) covered the West Coast and across to most of the Midwest. Although regional code development has been effective and responsive to the regulatory needs of the local jurisdictions, by early 1990s it became obvious that the country needed a single coordinated set of national model building codes. The nation's three model code groups decided to combine their efforts and in 1994 formed the International Code Council (ICC) to develop codes that would have no regional limitations. After three years of extensive research and development, the first edition of the International Building Code was published in 2000. The code was patterned on three legacy codes previously developed by the organizations that constitute ICC. By the year 2000, ICC had completed the International Codes series and ceased development of the legacy codes in favor of their national successor. Legacy codes •·     BOCA National Building Code (BOCA/NBC) by the Building Officials Code Administrators International (BOCA) •·     Uniform Building Code (UBC) by the International Conference of Building Officials (ICBO) •·     Standard Building Code (SBC) by the Southern Building Code Congress International (SBCCI) Per the International Residential Code of 2006, "Bedrooms have minimum dimensions, light, ventilation, heating and emergency requirements. No requirements for closets as furniture may substitute for such.A bedroom shall have a floor area of not less then 70 square feet. (R304.2) Bedrooms shall not be less then 7 feet in any horizontal direction. (R304.4)Bedrooms shall have a ceiling height of not less then 7 feet. The required height shall be measured from the finish floor to the lowest projection from the ceiling. (R305.1) For a room with sloped ceiling, at last 50% of the required floor area of the room must have a ceiling height of at least 7 feet. And no portion of the required floor area may have a ceiling height of less then 5 feet. (R305.1)All habitable rooms shall have an aggregate glazing area of not less then 8% of the floor area of the room. Natural ventilation shall be though windows, doors, louvers or other approved openings to the outdoor air. Such openings shall be provided with ready access or shall otherwise be readily controllable by the building occupants. The minimum are that can be opened to the outdoors shall be 4% of the floor area being ventilated. (R303.1)Emergency escape and rescue openings must have a sill height of not more then 44 inches above the floor (R310.1). The size of the opening should be at least 5.7 square feet (R310.1.1), measuring no less then 24 inches in height (R310.1.2) and no less the 20 inches in width (R.310.1.3). Bars grilles, covers, screen or similar devices are permitted provided the minimum net clear opening complies with R310.1.1 thru R310.1.3, and such devices shall be releasable or removable from the inside without the use of a key, tool, special knowledge or force greater then that which is required for normal operation of the escape and rescue opening.Smoke detectors shall be located (in addition to other areas) in each sleeping room and outside each separate sleeping area in the immediate vicinity of the bedrooms (R313.2). They should be connected in such a manner that the actuation of one alarm will activate all of the alarms in the individual unit.When winter temperatures are below 60 degrees F every dwelling unit shall be provided with heating facilities capable of maintaining a minimum room temperature of 68 degree F at a point 3 ft above the floor and 2 feet form exterior walls in all habitable rooms at the design temperature. The installation of one or more portable space heaters shall not be used to achieve compliance with this section." Of course not every property we encounter in the market place fits nice and cleanly into this definition and more critical to appraisers and real estate agents is how HUD and FNMA require these rooms to be defined. They are also interested in market acceptance so where the IBC may say that the presence of a closet is not required however the market may demonstrate limited acceptance of bedrooms without closets within a particular market segment or locale. In those cases an appraiser may approach the problem by still characterizing a room as a bedroom but adjust the value based upon a cost to cure, if curable, or a market derived adjustment to value. Fannie Mae Guidelines state that "dwellings with unusual layouts, peculiar floor plans, or inadequate equipment or amenities generally have limited market appeal. A review of the room list and floor plan for the dwelling unit may indicate an unusual layout-such as bedrooms on a level with no bath, or a kitchen on a different level from the dining room. If the appraiser indicates that such inadequacies will result in market resistance to the subject property, he or she should make appropriate adjustments to reflect this in the overall analysis. On the other hand, if market acceptance can be demonstrated through the use of comparable sales with the same inadequacies, no adjustments are requiredFunctional depreciation (which is traditionally referred to as functional obsolescence) is a loss in value that is caused by defects in the design of the structure-for example, inadequacies in such items as architecture, floor plan, or sizes and types of rooms. It also can be caused by changes in market preferences that result in some aspect of the improvements being considered obsolete by current standards-for example, the location of a bedroom on a level with no bathroom, or access to a bedroom only through another bedroom."FHA Guidelines state that "as a rule basement space does not count as habitable space. If the bedroom does not have proper light and ventilation, the room can not be included in the gross living area. The following requirements apply to the valuation of below-grade rooms: The windowsill may not be higher than 44 inches fromthe floor. The windowsill must have a net clear opening (width x height) of at least 24 inches by 36 inches. The window should be at ground level; however, compensating factors may allow less. In all cases, use reasonable care and judgment. If thesestandards are not substantially met, the basement area cannot be counted as habitable space. All bedrooms must have adequate egress to the exterior of the home. If an enclosed patio (solid walls) covers the bedroom window, it is possible that the bedroomwon't qualify as a habitable bedroom. Security bars are acceptable if they comply with local fire codes. Occupants of a bedroom must be able to get outside the home if there is a fire. Bedroom windows with security bars require a quick release mechanism for emergency egress." In summary, the classification of a room as a bedroom largely rests upon market acceptance and safety issues relative to egress. Other physical short comings can often be accounted for by either market based or cost to cure based adjustments to value. Ref; HUD 4150.2 , Appendix D HUD 4905.1, General Acceptability Criteria International Building Code (IBC) International Residential Code of 2006 FNMA Selling Guide, Appraisal Guidelines, Part B, Subpart B4, Chapter 1, Section.4 ANSI, Gross Living Area Measurement Frederick R. Giebel, Jr. IFA, ASA (Preferred Appraisers, Inc.) Wed, 13 Jul 2011 05:36:06 -0700 https://activerain.com/blogsview/2399141/what-is-a-bedroom-- https://activerain.com/blogsview/1537596/a-little-humor As an element in preparing appraisal reports I cite recent sales of properties similar to the subject of my appraisal. In doing so I include photographs and descriptions of those comparable sales. The other day I am standing outside of a WAWA Store where I stopped to get a drink and was calling my office. As people streamed out of WAWA at noon and walked passed me I told Eileen back at the office that "I made a mistake and shot the neighbor and would have to go back". Needless to said the stream of blank unconcerned faces passing by me at that moment suddenly turned my way in surprise. Of course, I was referring to taking a photograph of a house. Frederick R. Giebel, Jr. IFA, ASA (Preferred Appraisers, Inc.) Tue, 09 Mar 2010 20:37:23 -0800 https://activerain.com/blogsview/1537596/a-little-humor https://activerain.com/blogsview/1537221/market-conditions--washington-twp--gloucester--nj----date--03-2010 Market: Washington Twp. Gloucester County NJ     Date: 03/2010 An analysis of sales data from year to corresponding year indicates a change in: Sales Volume from 432 units to 432 units, Median Sales Price From $236,660 to $230,732, Exposure Time: Median Days On Market from 86 to 98 (Diluted by re-listing) Current Inventory Accumulation is 11 Months. The market is still in a state of oversupply however the trend in values is toward stabilization. Submarkets within this area may have different results. Preferred Appraisers, Inc. We provide real estate appraisals in the New Jersey counties of: Camden, Burlington, Gloucester, Salem and Cumberland. Reasonable Fees, Fast Service, Quick Response, FHA Approved Customer Service is the hallmark of our firm. We can prepare appraisals for mortgages, estates, marital asset distribution (Divorce), PMI Deletion, IRS etc. Call our office and speak to Eileen. She will help you navigate through all of your options and guide you to the appraisal format that will best serve your needs at the most reasonable cost. Frederick R. Giebel, Jr., NJ Certified General Appraiser, (RG42000946000) Ph 856-232-0971 <> Fax 856-227-0693 <> Email: houseval@comcast.net Website: http://houseval.net/ Frederick R. Giebel, Jr. IFA, ASA (Preferred Appraisers, Inc.) Tue, 09 Mar 2010 12:22:58 -0800 https://activerain.com/blogsview/1537221/market-conditions--washington-twp--gloucester--nj----date--03-2010 https://activerain.com/blogsview/1537162/market-conditions--winslow-twp--wilton-s-corner----date--03-2010 Preferred Appraisers, Inc. Frederick R. Giebel, Jr. NJ Certified General Real Estate Appraiser (42RG00094600) Website:  http://houseval.net/ Market: Winslow Twp. Wilton's Corner    Date: 03/2010 An analysis of sales data from year to corresponding year indicates a change in:  Sales Volume from 63 units to 43 units, Median Sales Price From $241,700 to $236,150, Exposure Time: Median Days On Market from 77 to 70 (Diluted by re-listing) Current Inventory Accumulation is 17 Months.This market is heavily influenced by "Short Sales" and foreclosures. The market is still in a state of oversupply  but the trend in values is toward stabilization. New constructions is ongoing. Submarkets within this area may have different results. Frederick R. Giebel, Jr. IFA, ASA (Preferred Appraisers, Inc.) Tue, 09 Mar 2010 11:48:04 -0800 https://activerain.com/blogsview/1537162/market-conditions--winslow-twp--wilton-s-corner----date--03-2010 https://activerain.com/blogsview/1536158/pittsgrove-twp----single-family-residential-market-03-2010 An analysis of sales data from year to corresponding year indicates a change in:  Sales Volume from 43 units to 41 units, Median Sales Price From $235,000 to $234,900, Median Days On Market from 85 to 95 (Diluted by re-listing) Current Inventory Accumulation is 14.6  Months. Submarkets within this area may have different results. Values appear to have stabilized however the market is remains in a condition of oversupply. Frederick R. Giebel, Jr. IFA, ASA (Preferred Appraisers, Inc.) Tue, 09 Mar 2010 03:26:28 -0800 https://activerain.com/blogsview/1536158/pittsgrove-twp----single-family-residential-market-03-2010 https://activerain.com/blogsview/1533507/pennsauken--delaware-gardens--single-family-residential--march-2010 Pennsauken: Delaware Gardens, Single Family Residential, March 2010 An analysis of sales data from year to year indicates a change in:  Sales Volume from 94 units to 68 units, Median Sales Price From $152,000 to $149,900, Median Days On Market from 62 to 51 (Diluted by re-listing) Current Inventory Accumulation is 13 Months. Submarkets within this area may have different results. Values appear to have stabilized but the market is still in severe oversupply and foreclosure activity is significant. Frederick R. Giebel, Jr. IFA, ASA (Preferred Appraisers, Inc.) Sun, 07 Mar 2010 22:25:51 -0800 https://activerain.com/blogsview/1533507/pennsauken--delaware-gardens--single-family-residential--march-2010 https://activerain.com/blogsview/1532051/verifying-the-appraiser-s-credentials- Bad Appraisal?               Don't Get Scammed!             Appraiser from outside the area? On May 1st 2009 when the Home Valuation Code Of Conduct was implemented by Fannie Mae it sent waves of appraisal orders to third party middlemen. These middlemen sliced the appraiser's fees and imposed Draconian completion deadlines on appraisers forcing many out of the business and causing others to cut corners, or in some cases engage in scams. The proliferation of the use of unlicensed property inspectors has exploded since then and so has the numbers of disgruntled agents and homeowners seeking fair and accurate appraisals. Many agents have lost income and homeowners have lost their homes. The way the scam works is that an unlicensed individual inspects the home but the appraisal report is signed by a licensed or certified appraiser who has never set foot in the home. Often times these are appraisers of dubious reputation who are from distant areas or even out of state who have no or little knowledge of the subject neighborhood. When meeting an appraiser you should request his business card if it has not been offered to you, AND a copy of is ID. Appraiser's state licenses and certifications all come with a wallet sized ID card. In the absence of a copy of his or her wallet state appraiser's ID look at their license and match the name to the business card. You can go to the Appraisal Subcommittee website (ASC.gov) or specifically the following search page and enter the appraiser's name to find out if they are legitimate: https://www.asc.gov/content/category1/standardSearches.aspx?queryType=2 If you find that you have been scammed you should contact the lender and the New Jersey Board of Appraisers: Board of Real Estate Appraisers, P.O. Box 45032, Newark, N.J. 07101, (973) 504-6480 http://www.njconsumeraffairs.gov/real/ Frederick R. Giebel, Jr. IFA, ASA (Preferred Appraisers, Inc.) Sun, 07 Mar 2010 02:05:30 -0800 https://activerain.com/blogsview/1532051/verifying-the-appraiser-s-credentials- https://activerain.com/blogsview/1531362/measuring-the-effect-of-limited-exposure-time-on-value- Limited Exposure Time and Value I was recently asked by an intern how to determine value when the client has specified the requirement for a 90 day market exposure limitation. That value may under some circumstances be defined as follows: Liquidation Value: the most probable price that a specified interest in real property is likely to bring under all of the following conditions: 1. Consummation of a sale will occur within a severely limited future marketing period specified by the client. 2. The actual market conditions currently prevailing are those to which the appraised property interest is subject. 3. The buyer is acting prudently and knowledgeably. 4. The seller is under extreme compulsion to sell. 5. The buyer is typically motivated. 6. The buyer is acting in what he or she considers his or her best interest. 7. A limited marketing effort and time will be allowed for the completion of a sale. 8. Payment will be made in cash in U.S. dollars or in terms of financial arrangements comparable thereto. 9. The price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale." This definition clearly differs from that of market value due to the motivation of the seller and the limited marketing period factors. The first task is to study the entire volume of sales within your delineated neighborhood and determine the median and average days on market. If that is greater than 90 days then look at a smaller but significant sample of homes that are nominally comparable to your subject and determine the average and median days on market. If those Days On Market are still greater than 90 then select three nominally comparable sales and compare them to sales that are most similar to each of them that sold in less than 90 days. Grid the three pairs make adjustments for the incremental value contributions of the variables that they do not have in common. Adjust "to" the sale that is the less than 90 day sale. Look at the difference in adjusted sales prices between the three paired sets and determine using your judgment which is the most credible isolated difference and either use the one from the paired set that is most similar to our subject, or an average, or a median and then apply that as an adjustment to all your comparable sales which sold in more than 90 days.                Sale 1A      Sale 2A      Sale 1B     Sale 2B      Sale 1C      Sale 2CSales Price 100K          110K        110K         115K         100K           110KDOM           90             120           90            130            89              126Garage       No             Yes -5K      No          Yes -5K        No           Yes -5K 2ndBth       No             No             No          Yes -5K        No               No__________________________________________________ _________              100K        -105K      100K       -105K     100K       -105KAdjVal Diff         5K                         5K                         5K5K / 105k = 4.76%Subtract 4.76% from each of the Comparable Sales you cited in the appraisal which had been exposed for more than 90 days.With the current trend toward forensic appraisals the more explanation the better. Today my appraisals are ending up containing almost as much data and analysis as my workfile. If you do all that work to isolate the incremental adjustment attributable to limited exposure time then you might as well cut and paste your analysis into the addendum to illustrate the methodology you used and to enhance the credibility of your conclusions to your client. For appraisers the limitation should be added as a "Supplementary Requirement" of the client. It should be included just after the Scope of Work in your addenda. If you are an agent or if this is an appraisal for listing purposes then your job is not done. An analysis of offering prices and their relationship with limited exposure sales prices is necessary to determine the market supported offering price. Frederick R. Giebel, Jr. IFA, ASA (Preferred Appraisers, Inc.) Sat, 06 Mar 2010 10:29:25 -0800 https://activerain.com/blogsview/1531362/measuring-the-effect-of-limited-exposure-time-on-value- https://activerain.com/blogsview/1397724/what-is-the-difference-between-an-appraisal-and-an-automated-valuation-model--avm-- The answer to your question is that the AVM is based upon dated, raw unverified data and has not taken into account the physical and locational characteristics of the subject. The appraiser has been engaged to prepare an Opinion of Market value, as defined "as the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale." AVMs, Automated Valuation models are a collection of objective facts that are based upon raw unverified sales data. The parties to the transactions have not been interviewed and the motivations of the principals investigated. The AVM has not evaluated the subject to ascertain physical condition. Nor has the quality of construction, functional obsolescence, or nuances associated with view, location or offsite influences been uncovered and evaluated. The AVM has not investigated and confirmed that the comparable sales that it has based its value conclusion on are in compliance with numbers 1,2,3,4, and 5 making them reasonable illustrations of market reaction to the location, structure and amenities of the property which is the subject of the valuation analysis. Per FNMA: "At present, though, we believe AVMs have generally not evolved sufficiently to fully replace traditional appraisals and human judgment for the origination of first lien mortgages. https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/avms/ "Fitch Ratings is imposing a devaluation, of the homes backing mortgages in bond pools if they have been performed by "automated value modules" (AVM's), broker price opinions, desk reviews, tax assessments or drive-by's.AVM's have proved to be highly unreliable--returning valuations which have proved to be 15-20% inaccurate...even in so-called "cookie cutter" neighborhoods. Fitch Ratings said it would discount by 10 to 15 percent securitizations of loans backed by homes in softer markets calculated by Automated Valuation Models" (AVM). -Washington Post, Kenneth R. Harney; syndicated columnist The Fitch Group is a financial corporation whose divisions include Fitch Solutions, an advisory firm offering products and services to the financial industry and is one of the major risk-assessment firms for the global bond market. Fitch Ratings, Ltd. is an international credit rating agency dual-headquartered in New York City and London. It was one of the three Nationally Recognized Statistical Rating Organizations (NRSRO) designated by the U.S. Securities and Exchange Commission in 1975, together with Moody's and Standard & Poor's. An AVM may be a useful tool to reveal potential comparable sales or to discern the trend in values. It is however by no means comparable in terms of accuracy and comprehensiveness to an appraisal performed by a well seasoned certified appraiser with years of experience in a specific market who has inspected the subject property and comparable sales, and verified data, as well as taken into account both onsite and offsite conditions. The AVM that is the subject of your query is devoid of critical and relevant facts pertaining to value and has formulated a value conclusion without consideration of their impact on market reaction. The question is akin to asking why pacing off a measurement is not the same as the measurement made by a laser measuring device. Pacing may be accurate on occasion but a laser measuring device is consistent and verifiably accurate. This is the source of the variance between the appraiser's USPAP compliant Opinion of Value and the value formulated by the analysis of raw, unverified data provided by the AVM. Frederick R. Giebel, Jr. IFA, ASA (Preferred Appraisers, Inc.) Tue, 22 Dec 2009 11:38:18 -0800 https://activerain.com/blogsview/1397724/what-is-the-difference-between-an-appraisal-and-an-automated-valuation-model--avm-- https://activerain.com/blogsview/1377990/what-is-a-reasonable-offer-to-make-on-a--260-000-asking-price- What is a reasonable offer on a $260,000 asking price?Property in Question: XXXXXX Ave, Sample Twp., NJAnswer: This is a common question that often causes quite a bit of anxiety. I will answer this question in a general sense since I don't have all the specifics of the property in question.As an appraiser when I am advising a client I would prepare an appraisal to first ascertain if the property is appropriately priced. If you have toured a number of like competitive homes nearby you might already have a sense that a home is priced competitively and from there you just need to fine tune your offer. Within that appraisal I would include an analysis of the prevalence and amounts of common and typical sales concessions currently being paid by sellers to facilitate sales. I would consider the median and average "List to Sold Price Ratio" for the subject's market segment for the past 6 months. I also consider the current market exposure period relative to the average and median exposure periods for this market segment. I would then include in the analysis how much competition there is with the home in question and advise my client to base their offer to purchase on a figure derived from the reconciliation of those factors.If the home appears appropriately priced relative to its peers and there are no unusual conditions then I would suggest they closely follow the List to Sold Price Ratio. If it is more competitive or has some unusual condition I might suggest being more liberal with their offer.To sum it up1. Is it competitively priced?2. What is the common amount in this market, at this time, if any, being paid to the buyers to assist with closing costs? How prevalent is this?3. How long has our subject been on the market relative to the average exposure period?4. What is the average and median List Price to Sold Price Ratio for homes in this area and price range for the past 6 months? 5. What are the conditions if any that make this property more competitive than the average home currently on the market? For example; in the typical situation at this point in time homes in this locale are selling at 96.5% to 97% of final list price. 22% of the homes in that value range sold with sales concessions with the typical being about 2% of sold price. That would suggest that if a home in this locale is appropriately priced (is it?) and has average competition, a reasonable offer would be 95% of List with no sales concessions Frederick R. Giebel, Jr. IFA, ASA (Preferred Appraisers, Inc.) Thu, 10 Dec 2009 01:32:29 -0800 https://activerain.com/blogsview/1377990/what-is-a-reasonable-offer-to-make-on-a--260-000-asking-price- https://activerain.com/blogsview/1376349/kings-grant---evesham-twp----marlton Kings Grant - Evesham Twp. - Marlton -12/2009 An analysis of sales data from year to corresponding year indicates a change in:  Sales Volume from 120 units to 126 units, Median Sales Price From $188,450 to $185,000, Median Days On Market from 67 to 57 (Diluted by re-listing) Current Inventory Accumulation is 3.8 Months. Submarkets within this area may have different results. Values appear to be stabilizing. Frederick R. Giebel, Jr. Certified General Real Estate Appraiser ((NJ,42RG00094600) Frederick R. Giebel, Jr. IFA, ASA (Preferred Appraisers, Inc.) Wed, 09 Dec 2009 03:01:24 -0800 https://activerain.com/blogsview/1376349/kings-grant---evesham-twp----marlton https://activerain.com/blogsview/531422/what-is-the-appraisal-process- Three Approaches to value are considered: The Cost Approach whereby the value of the lot is estimated based upon Sales, Allocation or Extraction methods. The cost of the developed site is then added to the cost of the building and site improvements computed using quarterly updated builder's construction cost services. Estimated depreciation is then subtracted. This method is more relevant for new construction or homes that are just a year or two old. The Income Approach is an analysis of market rents and their relationship to sales prices. This is particularly important in the appraisal of income producing properties like resort homes, multi-unit properties or commercial properties. The appraisal of your home will most likely rely solely or in large part upon the Sales Comparison Approach. The Sales Comparison Approach is prepared by researching sales that have occurred over a 24 month period to establish the trend in values. Homes sold in "non-arms length" transactions and under duress are eliminated from the analysis. This large volume of sales is then used to isolate the incremental value contribution to the whole of various features and to understand the forces at work in this market over a period of time. Although a large volume of sales were studied only the most relevant indicators of the subject value were selected and cited in this report. The other sales serve as supporting evidence retained in the appraiser's files. Because this is a "Summary" of a "Complete Appraisal" it lists only the most relevant data. Researching the appraisal is done by searching, reviewing and analyzing various data sources including MLS, municipal data and commercially available resources.  The appraisal relies on data obtained from these sources, much of which has been verified through multiple sources.  In addition, consultation with competent real estate professionals and government officials is made to obtain or verify information.  Comparable sales descriptions are obtained from these sources and the exterior observation of the sale properties.  A diligent effort is made to uncover and verify all relevant factors in describing and estimating the value of the subject within the time limitations of the assignment. The Sale dates noted are the settlement dates. The valuation analysis will contain cited sales that include sales of homes that are marginally superior to the subject and marginally inferior to the subject thereby establishing a narrow bracket of high and low value wherein your home's value lies between. A larger poplulation of sales is analyzed and paired sales analysis is used to isolate the incremental value contribution to the whole of features not shared by the subject and the cited comparable sales. The incremental value contribution to the whole of the various variables are then added or subtracted as adjustments from/to the raw sales prices of the cited comparable sales which further narrows the range of indicated value. Because settled sales can be very old considering that the actual agreement to purchase may have occurred many months prior to settlement and under vastly different market conditions it is also deemed prudent to analyze a significant number of expired, withdrawn and current listings to identify the upper limit of value, current market trend and competing supply. Expired and withdrawn listings of similar homes give evidence of what the market will not pay for a home with similar characteristics as the subject thus helping to establish the upper limit of value for the subject. Current listings reveal the direction values may be going and give an indication of supply and demand factors. They also indicate the lowest price one may currently pay for a comparable property giving additional support to the establishing the ceiling of the valuation bracket. An analysis of the current supply fo similar competing active listings provides and indication of the current absorption rate. Appraisals made for lending purposes intended for federally regulated institutions or transactions have strict guidelines regarding ratios and percentages of adjustments. Only settled sales can be used as "primary" data and they must have occurred within the past 12 months as a maximum. Older sales, active listings and expired listings can be cited in the analysis as "supplementary" data. The analysis and correlation of all this data is then used to provide a clear and accurate identification of the forces currently at work in the market and to provide a supported and defensible opinion of the subject value. The completed appraisal must conform to the Uniform Standards of Appraisal Practice and the appraiser must be able to prove he has the geographical competency, experience and appropriate license level to provide a supported and defensible Opinion of Value for this type of property if challenged by the state Board of Appraisers. In the case of appraisals for mortgage lending, the appraisal typically goes to a third party reviewer who will verify the ratios, percentages and math computations as well as compare it to an Automated Valuation Model.  When that is complete, usually within hours, the appraisal is forwarded on to a mortgage underwriter for further analysis required to render a loan decision and then it is on to the branch of your lender that is processing your mortgage. Frederick R. Giebel, Jr. IFA, ASA (Preferred Appraisers, Inc.) Sat, 31 May 2008 12:25:08 -0700 https://activerain.com/blogsview/531422/what-is-the-appraisal-process-