Appraisal Adjustments Guide

Use this as a pricing cheat sheet (not a formal appraisal). Build your case from data.

Instructor: Rick Williams—Designated  Managing Broker • Appraiser 

The 7 Golden Rules

1. 12‑month window first. Favor comps ≤ 12 months; go older only when truly necessary and disclose why.

2. Like‑for‑like. Match style, era, quality, bed/bath count, and basement/finish before adjusting.

3. Prove the “why.” Base adjustments on paired sales or a clear market pattern—not gut feel.

4. Document updates. Ages/costs of roofs, kitchens, baths, systems = stronger support.

5. Call the agents. Good appraisers (and agents) ask: concessions? traffic? defects? multiple offers?

6. Two sets of eyes. Verify photos, maps, zoning, and measurements; don’t trust auto‑fill.

High‑Impact Factors (and How to Handle Them)

Location • View • Zoning

• Start here. Micro‑location (school boundary, street position, rail/proximity) can dwarf interior features.

• Note: Time adjustments are rare in IL, but can appear in fast‑moving markets elsewhere.

  
  

Site Value (Urban/Suburban)

• Market‑based; common ranges seen: $0.25–$10/sf depending on overall price tier and land utility.

• Support with vacant land indications, teardown comps, or paired‑sale lot size differences.

  
  

Style & Era

• Compare ranch to ranch, bungalow to bungalow where possible.

• Era matters: try to keep ±10–15 years on year‑built for primary comps.

Quality & Exterior

• Brick generally commands a premium over frame/vinyl; market‑dependent adjustments have ranged ~$1,500–$35,000 by price tier.

• Anchor to paired sales; avoid generic flat numbers across all segments.

GLA & Layout

• Use $/sf from paired comps (exclude extreme outliers). Don’t over‑weight tiny deltas.

• Functional layout differences (true primary suite, open plan vs chopped) often show up in DOM and SP:LP—cite them.

Bedrooms & Baths

• Match bed count; 3BR markets behave differently than 2BR.

• Full bath premiums vary—support with paired sales; partial bath ≠ half a full bath in value.

Basements & Finish

• Separate presence (yes/no), finish level, and quality of egress. Finished below‑grade ≠ above‑grade.

Concessions / Financing

• Sales for financing (seller credits) are typically dollar‑for‑dollar adjustments. Disclose clearly.

• FHA/VA reports sometimes misread concessions—be precise in your MLS remarks and CMA notes.

Time (Market Conditions)

• In IL, generally rare to apply; in fast‑shifting markets, justify with monthly index or MLS medians for the micro‑area.

Detailed Adjustment Guidance (Workshop Notes)

Sales or Financing Concessions

• Dollar-for-dollar adjustment. A $5,000 seller credit = –$5,000 pricing adjustment because the seller effectively reduced net price to make the deal work.

  
  

Date of Sale / Time

• Prefer ≤ 12 months prior to your pricing date. Using older sales may require a time (market conditions) adjustment if the market shifted. In Illinois this is uncommon currently, but if applied, support it with micro‑market monthly trend data.

  
  

Location vs. View (they are NOT the same)

• Location speaks to zoning/land use and micro‑siting (residential vs. mixed, adjacency to commercial/rail, school boundary).

• View is what the property sees (front/rear/side) — e.g., golf course, water, park, power lines, busy road.

• If the location category differs (e.g., residential vs. mixed‑use street), it’s usually not a good comp. Only use if scarcity demands it, and disclose + support any location adjustment.

  
  

Site (Lot Size) — $/sf Ranges

Adjust on a $ per square foot basis supported by paired sales in the neighborhood/city.

Typical guideposts:

• Suburbs: often no site adjustment for differences under 1,000 sf.

• City of Chicago: even sub‑1,000 sf frontage/lot differences can warrant an adjustment.

• Observed ranges (tie to total land + building market value):

Price Tier (Total Land + Building)	Typical Site $/sf Range
≤ $200,000	$0.25 – $1.50 / sf
$200,001 – $350,000	$1.50 – $2.50 / sf
$350,001 – $500,000	$2.50 – $5.00 / sf
>$500,000	$5.00 – $10.00 / sf

Always validate with paired sales or land indications. Document your math in CMA notes.

View (Positive & Negative Influences)

• Typical adjustment range: $500 – $150,000, scaled to price tier and the reason for the view.

• Positive: golf course, water, protected park/skyline — premiums often trace back to the original lot premium paid at purchase.

• Negative: backs to power lines, fronts busy road, adjacent to commercial/industrial — support with paired sales where one comp has the detriment and one does not.

View Situation	Direction	Support Cue
Golf course / water / park	+	Lot premium at original sale + current paired sales
Skyline / corner park exposure	+	DOM advantage + SP:LP uplift
Backs to power lines	–	Compare to similar home not backing lines
Fronts busy road	–	Noise/safety external obsolescence; matched paired sale

Design (Style)

• Always aim for same style as subject; if forced to cross styles due to scarcity, use this general value ladder (lowest → highest typical market value): Raised Ranch → Ranch → Split Level → Cape Cod → 2‑Story → Tudor

• Adjustments are rare and highly market‑dependent; if used, ranges can be ~$2,500 – $100,000. Anchor to paired sales, not rules of thumb.

Quick Workflow (Pricing Huddle) (Pricing Huddle)

1. Define the subject: style, era, GLA, beds/baths, basement, lot, micro‑location, zoning.

2. Pull a long list (≤12 months; radius or school boundary as relevant).

3. Filter by like‑for‑like (style/era/quality first), then proximity.

4. Bracket GLA and condition with 3–5 primary comps and 2 alternates.

5. Quantify adjustments using paired sales (lot size, brick vs frame, bath count, finish).

6. Note concessions and adjust $‑for‑$ where applicable.

7. Sanity check with DOM trends, list‑to‑sale %, and any new construction influences.

Common Pitfalls (Skip These)

• Using model homes as price anchors (often overpriced, inferior lot positions).

• Comparing across incompatible styles/eras when same‑style comps exist.

• Treating finished below‑grade like above‑grade GLA.

• Blindly trusting AVMs/auto‑CMA outputs; verify.

Fast Reference: Support Sources

• MLS paired sales (notes & agent calls)

• Aerials/street view • School maps • Zoning maps

• Age/cost docs for updates (roof, HVAC, kitchen, baths)

• Market trend snapshots: DOM, Months of Inventory, SP:LP

• Style references: The Red Book (architectural styles)

Talk Tracks (Client‑Facing)

• Why this comp? “Same style, similar year‑built and quality, within 0.4 miles, closed 4 months ago.”

• Why this adjustment? “Paired sales on the same street show brick homes trading ~$18k higher at this price tier; here are two examples.”

• Why not that comp? “Model home premium and inferior lot position make it a poor indicator for your home’s market value.”

Mini‑Checklist (before you price)

☐ 3–5 primary comps ≤12 months ☐ Style/Era/Quality matched ☐ Lot/view/zoning confirmed ☐ Concessions identified & adjusted ☐ Bed/Bath/Basement aligned ☐ Updates documented (age/cost) ☐ Two‑eyes verification complete

For agent pricing guidance only. Not a substitute for a licensed appraisal. Market ranges are illustrative—always validate with local paired sales.