Sales Comparison Models
The sales comparison model uses automatic sale selection and adjustments to complete a sales comparison approach to value a subject. Sales are selected based on configurable input parameters designed to mirror the normal comp selection process during an appraisal. The exact parameters will vary depending on the region, property type, and how sales are input into the Enterprise DataLog.
When the model is run potential subject sales are assigned a rating between 0 and 1. The highest ranked sales are the select and a land mix adjustment and time adjustment is performed. The resulting dollar per acre indication for the comparable sales are then combined to calculate the final opinion of value.
The Sales Comparison model allows for subjects to be rejected due to lack of comparable data or the range of found values being too large. It also allows for the selected sales and final opinion of value to be manually overridden by the appraiser or evaluator.
Models are given a name and description as wells and a date range when they can be applied to subjects. The Appraiser and Evaluator Templates define what the final report output will look like. These templates are created using the sperate desktop tool for editing report templates.
Appraisal Field sets and Custom Field Sets are configured in the Setup section of Maven and provide default values for the USPAP required fields and custom field needed in the report.
Model Settings configure how sales are rated and what acceptable value ranges are allowed.
All sales within three years of the effective date of appraisal are rated. When the rating process is finished sales must have at least the Minimum Rating to be selected for valuation. To continue the valuation at least the Minimum Sale Count of sales must be found. However, if more sales qualified are found they will be used up to the Preferred Sales Count.
After the final sales are selected and adjusted the Dollar/Acre values must be within the Max Price Spread to continue the valuation. The final Dollar/Acre is then calculated from the sales using a straight average, an averaged weighted based on each sale’s final rating, or a median value.
When the dollar range of the selected sales is too wide the model can be configured to continue the valuation process using the low values instead of the average.
Three configuration parameters can adjust further sections of the process. The time adjustment rate is applied to selected sales after the land mix adjustment is performed. The Age and Distance cushions are used when calculating the individual ratings for Age and Distance.
Allowed Value Thresholds
The allowed value thresholds allow a valuation to be rejected for falling outside of the allowed range. These values apply to the final number applied to the subject property, not to the selected sales. The range is entered on either a total or per acre basis. It can be sued to make sure calculated values stay inside of expected normal values or stay under allowed administrative thresholds for using this Model.
Calculate Exposure Time
USPAP required that Exposure Time be calculated when the definition of market value includes it as part of the definition. Exposure time can be calculated from the Days on Market entered on the sales, or if DOM is not being tracked on your sales a specified value may be entered here.
By default, only the subject’s land is valued. Any entered improvements can be valued by checking this option. Individual improvements are rated selected from sales based on improvement type name, condition, utility, effective age, and RCN/Unit value. As with sales a minimum number of improvements must be found with the entered minimum rating.
The individual comparison points are configured in this section. Each individual line item will be assigned a rating between 0 and 1. The individual values are used to calculate a weighted average as the final sale rating.
The final weighted average is calculated as: Sum(Rating * Weight) / Sum(Weights)
There are three types of comparison values that can be added.
- Strings – If either of the sale or subject value is a non-numeric string then the rating will be 1 if the strings match, and 0 if they do not match
- Numeric – If both the sale and subject’s value is a number then the rating is calculated as:
1 – (largerValue – SmallerValue)/LargerValue
- Custom – the following fields are custom calculations based on multiple inputs or other settings
- Age: 1 / (AgeInDays / Cushion)
- Distance: 1 / (Distance / Cushion)
- Land Mix Adjustment: First the Land Mix adjustment between the Sale and subject is calculated. Then the result is turned into a rating by calculating:
1 – Abs(LandMixAdjustment / (0.25 * SaleSCADollarPerUnit))
- Land Similarity: First an overall difference is calculated by summing the acreage difference between the subject and sale on the same land type:That overall difference is then turned into a rating:
1 – OverallDifference/Max(SubjectAcres, SaleAcres)
- Boundary Lines: If the line between the sale and subject’s geocoded locations crosses one of the setup boundary lines the value will be 0, otherwise if it does not cross it will be 1.
- Sale Quality:
The Boundary Lines section allows the drawing of lines on a map using the Google Map API. If the “Boundary Lines” comparison value item is added then the system will check to see if the line that connected sale and subject cross one of the configured boundary lines. Straight line are used, so it is not necessary to use fully closed shapes.