Newz: Neighborhood Analysis, Death of the Appraisal Clipboard
What’s in This Newsletter (In Order, Scroll Down)
- LIA AD: Can’t Certify the Work
- Why Neighborhood Analysis Matters: Avoiding Costly Appraisal Mistakes By Timothy Andersen, MAI
- See the Churches That Make Divine and Affordable Homes
- Pulling comps in a softer market By Ryan Lundquist
- The Future is Now: Fannie Mae and Freddie Mac Announce UAD 3.6 Implementation Timeline and Policy Changes
- The Death of the Appraisal Clipboard By Tony Pistilli
- Mortgage applications increased 1.1 percent from one week earlier
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Why Neighborhood Analysis Matters: Avoiding Costly Appraisal Mistakes
By Timothy Andersen, MAI
Excerpts:
Neighborhood analysis is a critical component of real estate appraisal, providing insights into factors that influence property values, risk analysis, and investment decisions. A comprehensive neighborhood analysis involves delineating precise boundaries, understanding property types and architectural styles within those boundaries, assessing land use changes, and evaluating current and future economic trends.
Topics:
- Defining Neighborhood Boundaries
- Assessing Neighborhood Characteristics
- Monitoring Land Use and Development Trends
- Evaluating Economic Trends
Implications for Appraisers
Neglecting a detailed neighborhood analysis as part of the appraisal can lead to inadequate appraisal reports, potentially resulting in critiques from reviewers or issues with compliance standards (i.e., a state appraisal authority). Appraisers are advised to conduct meticulous neighborhood analyses, ensuring their reports reflect current market conditions and property characteristics accurately.
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My comments: Well written and worth reading. Includes references. Defining the neighborhood is critical for all types of appraisals. This article focuses on residential, but the topics apply to commercial and other uses.
The neighborhood is where you first look for comps and do the analyses above. Going to a similar neighborhood for comps may be needed, but can be tricky.