The art of the adjustment process
1 / 62


  • Uploaded on

THE ART OF THE ADJUSTMENT PROCESS. George Librizzi George Raymond Brown. GOALS. A review of the classical development and application of adjustments in the appraisal process.

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about ' THE ART OF THE ADJUSTMENT PROCESS' - aliya

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
The art of the adjustment process

George Librizzi

George Raymond Brown

A review of the classical development and application of adjustments in the appraisal process


A review of the classicaldevelopment and application of adjustments in the appraisal process

This seminaris intended to raise issues and be thought provoking rather than a definitive guide to specific adjustment methodology

What are the judges saying

What are the Judges saying?

A strong message has been sent to the appraisal community by the courts

It is in your best interest to be aware of the court’s opinions on a particular property type BEFORE appearing before them!

…or your valuation could get

booted out!

What is the root of the issue

Incompetence opinions on a particular ?

Lack of supporting evidence?

Or just poor


What is the root of the issue?

Scope of work

OUR WORK opinions on a particular






Super secret adjustment guide
Super Secret Adjustment Guide opinions on a particular

Super Secret Adjustment Sheet opinions on a particular – 2013

GBA or SFLA $30 -$130 per Sq. Ft. (except for condominiums)

Heat type Hot water baseboard - $2,500

Forced Air – A/C +2,500

Land $3 per Sq. Ft. (30% of site value)

Land $10,000 per acre (rural home sites)

Condo GBA $110-180 per Sq. Ft.

GRM (Wildwood) 80 – 425 (Stone Harbor)

Cap rate 8.0 – 9.0

Fireplace $2,500

Pool $25,000

Basement $5,000

Finished Basement $10,000

Entrepreneurial profit ----- 10 Percent

OVER-COMING THE opinions on a particular


Pantasote Co. v. City of Passaic

The presumption must be rebutted

by cogent evidence that must be,

..definite, positive, and certain in quality and quantity

Presumption remains in effect even if the district used a flawed valuation method

Common adjustment issues

COMMON ADJUSTMENT opinions on a particular ISSUES

The Principle of Contribution

Customary, Usual & Reasonable

The Sequence

Comparative Analysis




Should be applied first

Justify the reasonableness

Extensive discussion of reasoning

Location = quantitative

It is expected the expert will explain the why’s and wherefores

RISKY BUSINESS opinions on a particular



Take nothing on its looks take everything on evidence there s no better rule charles dickens
“Take nothing on its looks; take everything on evidence. opinions on a particular There’s no better rule”~Charles Dickens~




a opinions on a particular . High value residential in day long trial

b. Named experts; remember your reputation is on trial

c. Quality dispute and bathroom count issue

d. Sales outside of the subject’s taxing district approved

e. Adjustment issues generally are addressed

f. Cost approach completed and ignored

g. Property record card need not be reviewed

h. Plaintiff’s report and testimony “fatally flawed”

I. Appellate court defers to the expertise of the tax court

j. Small, typographical errors do not undercut the report

k. Adjustments must be made to explain differences

l. Attacking evidence post hearing is unacceptable

m. Admitting an expert report and evidence and relying upon it was not an “abuse of discretion” by the trial judge

n. Multiple approaches to value must be reconciled by the court

o. Judge relied on both reports; cherry-picking; trial judge has the discretion to adjust comparable sales after review and consideration of both reports

Matthew tuck vs west caldwell
Matthew Tuck opinions on a particular vs West Caldwell

Neighborhood Analysis

Sale price ranges

Values range per unit

Rejection of comparable sales cited

Motion for reconsideration post judgment


Measurements opinions on a particular

Suggest a mistake, any mistake

Interior inspections

Assessment records presumed correct

Common types of adjustments

Proper comparable sale selection

Comparable sales grid of plaintiffs’ appraiser

Unit of comparison $/Sq. Ft. of gross living area

Using a size related unit of comparison eliminates the need for size adjustments


Boro of




More from opinions on a particular Elrabie….

Condition v. Quality

Admitting reports (and testimony) into the record

Presumptions of correctness is describe in detail

Burden of proof remains with the plaintiff throughout the trial

The sales comparison approach is the best method of appraising a residence

What spills out of your mouth likely is not retractable; less is more

Chapter 123 is inapplicable in the year of a revaluation

Counter-claims (20 days), should not be made to achieve a tactical advantage

In dealing with the public, government must turn square corners!

Without a claim or counterclaim, the court is unable to increase an assessment in a revaluation year where Chapter 123 is inapplicable


vs opinions on a particular



Discrepancy opinions on a particular in building area; heated space

Estate sales as market evidence

Burden to prove that a sale is not bona fide falls on the challenger using creditable evidence

Failure to explain adjustments

Facts and data are necessary to support an expert’s opinion

Adjustments must have a foundation in market data; possibly supported by a cost manual

No support for the cost approach, not even a definition for the word ‘area’

Both appraisals tossed due to lack of support for adjustments

Silverman v. Allenhurst opinions on a particular

a. Using sales in another competitive districtb. Selective rejection of unsupported adjustmentsc. Judgment based upon a fair preponderance of evidence provided by both partiesd. Cost approach is appropriate for valuing new or relatively new construction since cost and market are more closely related when properties are new; also applicable to special purpose buildingse. The tax court is regarded as an expert; they may pick and choose what they rely upon from the expert’s testimony, reports, and the recordf. The court may not apply its own adjustments without support

Silverman v. Allenhurst opinions on a particular

g. Very often “adjustments made to comparable sales are subjective in nature.”h. Excess land substantiation: $1.5 million per acrei. Declining Director’s Ratio equates to an advancing marketj. Errors in the direction of the adjustment, superior or inferior?k. Paired Sales Analysis not included in the report is not consideredl. Unsubstantiated effective age adjustment are unacceptable

DEFENDANTS GRID opinions on a particular

PLANTIFFS GRID opinions on a particular

JUDGE’S GRID opinions on a particular

Bogusevich v township of ocean

Bogusevich opinions on a particular v. Township of Ocean

a. Subjective nature of adjustments acknowledged

b. No interior inspection of comparable sales conducted

c. No adjustment for bathrooms, redundancy of GLA he says?

d. Exterior photographs helpful

e. GLA and site adjustments rejected due to lack of support

f. Land abstraction example detailed (an example for you to you)

g. No adjustment for basement or basement finish (could be compared with office area in an industrial warehouse)

h. Subject purchase price ignored; expert includes no analysis in report; USPAP error of omission; purchase price could be controlling with support

Common adjustment issues1

Common Adjustment Issues opinions on a particular

Adjustment Issues begin with Comparable Sales Selection

Comparable sales selection

  • Selected Sales must have the same highest and best use. The sales must be as similar as possible to the subject, reflecting the actions of typical buyers. You must assume the posture of the typical buyer. The goal is to find sales that require little adjustment. Common adjustments should be linked to the buyer’s perspective.

Comparable Sales Selection

Common adjustment issues2

Common Adjustment Issues

Common adjustment solutions
Common Adjustment Solutions Investment for Buyers in the Subject’s Market

Key Terms Relating to the Adjustment Process

Paired sales matched pairs analysis
Paired Sales Investment for Buyers in the Subject’s MarketMatched Pairs Analysis

An adjustment derived from a single pair of sales is not necessarily indicative

Just As a Single Sale Does Not Reflect Market Value Investment for Buyers in the Subject’s Market

An Adjustment Derived from a Single Pair of Sales is Not necessarily Indicative

Common adjustments

COMMON ADJUSTMENTS Investment for Buyers in the Subject’s Market

Adjustment Tools based upon Market Conditions

Director s ratio
Director’s Ratio Investment for Buyers in the Subject’s Market

LOCATION Investment for Buyers in the Subject’s Market



Underlying Land Values and their Analysis Substantiate Location Adjustments and Much More!

Market conditions addenda
Market Investment for Buyers in the Subject’s MarketConditions Addenda

GROSS BUILDING AREA ADJUSTMENTS Investment for Buyers in the Subject’s Market


Assessor s property card

QUALITY Investment for Buyers in the Subject’s Market


Assessor’s Property Card?

  • 3. Determine the Q&C from the property record card for the subject and comps

  • 4. Last ditch: Make no adjustment for Q & C! Investment for Buyers in the Subject’s Market