During a conversation with a real estate agent, I was asked how we support time adjustments when a market is hot and prices are increasing. I started to explain how we use InfoSparks how it is a valuable tool for me as an appraiser. It allows me to look at different segments of the market very quickly and then use that information in my reports by depicting the trends graphically with charts. While there are many different ways we can use this tool as an appraiser, there are four main ways I use it on every appraisal we do. I go into more detail in the video above.
Median sale price change - This give great support for time adjustments or lack thereof. This is crucial in increasing markets with low supply. Have you ever had an appraisal come in below contract price and there were no time adjustments? If you were selling in a hot market with low supply, increasing median sale prices, and multiple offers, my guess is that the appraiser could have used this tool to support time adjustments to account for the increasing market.
Market time - This will show how quickly homes are selling and which direction the trend is going. This can be helpful in explaining a Comp that may be an outlier. Maybe the average Market time for the market is 90-120 days and this home sold in 1 day. Maybe it was under priced?
Supply of Inventory - This is also a big one. This can be a really good indicator of which way the market will be headed. For example, inventory levels under 3 months is often indicative of a shortage and indicates prices could be going higher.
Type of Sale - This can show the amount of distressed sales in relation to traditional sales. Using REO/Short sales as Comps when they make up less than 10% of the is typically not the best choice. But during the crash, there were certain neighborhoods that were predominantly distressed sales and this had a big impact on the market. This allowed me to illustrate this to the reader of my reports.
If you are interested in learning more, I go into more detail in the video above.
Appraiser Helping Real Estate Agents Facebook Group!
I have created a Facebook group for local Realtors who have appraisal questions. I will be sharing some great information that will help you understand things from an appraisers perspective and some tips to help you in your business. You are encouraged to jump in and ask any questions you have. We are here to help! Just click below and then click the "Join Group" button.