Market Extraction and the Adjustment Process
How did the appraiser come up with that adjustment?
Most commonly, appraisers use the Paired Sales Technique, or Market Extraction, to justify the adjustments made for the differences between the comparable sales and the subject property. Attached is an oversimplified example, but one that illustrates that it is the market that dictates the appeal of a feature or condition and that there is no standardized adjustment value.
Proper implementation of the Paired Sales Technique requires that all of the subject's marketable features be represented in at least one of the comparable sales selected. This may sometimes explain why the appraiser traveled further away in distance or farther back in time, to use one "oddball" comparable.
Using comparable sales to provide a reliable range of value is kind of like a puzzle. Try your hand at making adjustments the way that appraisers do!
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Your Instructor
Megan Johnson Judd is a State-Certified Residential Real Estate Appraiser, RD3035, and has been appraising all types of residential properties in Central Florida for over 29 years. A Candidate for Designation with the Appraisal Institute, she receives near constant education from the world's leading appraisal education resources. Megan is a court appointed expert and specializes in complex assignments, litigation support, court testimony and education. Her formal training as a Review Appraiser has resulted in a skill set that not only enables her to use a multitude of tools by which to analyze data and develop her own reliable and concise appraisal reports but also to review the work of others in an effort to strengthen their work product.
Megan approaches all of her work with a focus on ethics and education, rooted firmly in the belief that no dilemma is so great that it cannot be solved by honest and fact based communication. Her career has been the result of many years of great advancements and small setbacks, each met with the same attitude that through collaboration and education we can all obtain proficiency.
Megan has given lectures to the Orlando Regional Realtor Association, the Orange County Bar Association and the Central Florida Bankruptcy Law Association, as well as to several area real estate and mortgage brokerages. She has acted as a Mentor/Supervisor to many Trainee Appraisers and is the author of several Residential Real Estate Appraisal based courses.
A mother of three and the owner of Metropolis Real Estate Solutions, LLC, an Orlando based real estate brokerage and appraisal firm, she has become a master of multi-tasking. Her hobbies include reading, travel, writing, cooking, camping, and interior design. Oh, and eating. Eating all of the things. Don't forget about eating.
Course Curriculum
Frequently Asked Questions
Thank you for participating in this course offering. Of all the Appraisal Basics downloads, this one should provide you with the most clear representation of how to read an appraisal, from start to finish, and arrive at a logical conclusion that mirrors that of the author. For other insight into how you can determine the quality and reliability of an appraisal report, check out some of our other course offerings over at www.AppraisalBasics.com.