Friday, November 21, 2014

Homebuyers MUST Choose Least Adjustment over Distance or Sales Recency. Homequant Enlightens!

Of the three methods to evaluate comparable sales ("comps") - distance radius, sales recency and least adjustment - least adjustment is the most powerful method. 

Since most comps are pooled from a limited distance within the same neighborhood and older sales are generally time adjusted, distance and sales recency become less powerful methods than least adjustment which, in addition to sales time adjustment, incorporates adjustments for property features as well. 

1. Least Adjustment

(Click on the image to enlarge)

Note - while determining least adjustment, signs are ignored. Therefore, +3,000 and -3,000 are tied. In the table above, +2,940 is a smaller number than -8,510, hence being considered the best comp here requiring the least adjustment.

2. Distance Radius

3. Sales Recency

Visit the Homequant site to learn how to use these methods to value subject properties using comp sales:

Other Related Posts:
Homebuyers MUST Demand to See the Comps, Spatially. Homequant Illustrates!

Three Sales from Three Prior Quarters – Unadjusted for Time - are NOT Comps. Homequant Describes!

Homebuyers MUST Use Five Best Comps to Value a Subject. Homequant Demonstrates!

Homebuyers MUST Verify Appraiser’s Values in Four Easy Steps. Homequant Reveals!

Homebuyers MUST Validate Home Values at Self-directed Sites. Homequant Pioneers!

No comments:

Post a Comment