• The Experienced Appraiser

Understanding Bracketing

In layman's terms, bracketing (in the context of residential appraising) refers to providing a comparable that has the same exact same feature as the subject property. If you can't provide a comp with the same exact feature, bracketing refers to providing a comp of lesser appeal, as well as a comp with greater appeal.

The most common example is living area. If the subject property GLA is 2000 square feet, then another sale that is exactly 2000 sf might be used. The appraiser could also have one comp that is 1800 sf as well as one that is 2200 sf.

Across the Board Adjustments

When appraising, it is not desirable to use an "across the board adjustment" which would result if a feature is adjusted, but not bracketed. For example if the subject is a pool home and the appraiser used all non-pool homes as comps. The comps would likely all be adjusted upward for lacking the pool feature. Likewise using all pool home sales for comparison to a non-pool home would usually result in all comps being adjusted in the same direction (downward). Bracketing avoids across the board adjustments.

It is important to note that even if the feature is not adjusted (afforded a specific market reaction value in the report), it is highly preferable to provide at least one comp with a similar feature. In many cases it may be acceptable to not bracket a feature, but the appraiser must explain why it was necessary in the report and it may create undesired consequences (review, delay, etc).

It is very common for a real estate agent to show the appraiser a number of comparable sales which theoretically all support their sale price, but with all of them being larger than the subject or newer than the subject. It may be acceptable as a Realtor to estimate a certain price per sf or value to account for the age difference, but an appraiser needs to provide supported reasoning for their adjustments (or lack of adjustments).

Under / Over Improvements

The most common way to reflect that a property is not under or over improved is to bracket the market driving features. If you have the smallest home in a neighborhood you may be under-improved. If you have the largest you might be over-improved. If you have a 100 foot long pool in a community where everyone else has pools that are 50 foot long, then you may have an over-improved feature. One of the best ways to reflect "conformity to market norms" is to show that a competing sale had the same feature. If you can't show a sale that has the feature, at the very least we suggest that you try to find other competitive/similar properties which have the same feature located in the sub market area (even if they have not sold recently).

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Using This Knowledge in Practice / How to Show Value to the Appraiser

Whenever you (as a seller) have a feature that you would like the appraiser to give value consideration to, it is advisable to find comps that support your value assumption. For example, if you have an unusually nice pool with extra features such as a spa or screened enclosure, then you may want to find a sale with similar features. Did the comp you found sell for a higher price than it would have without that feature? If it did, then you have a comp that "brackets" your subject home's feature and reflects a market reaction to it. If that comparable sale achieved a contract price that is $10,000 higher than other similar home sales that have normal pools, then it is likely that your extra pool features can be shown to be worth about $10,000 in "market reaction".

Finding an Experienced Appraiser

Experienced Appraisers is a network of hundreds of local Florida Appraisers that provide services for any property type and located anywhere within the State. We have specialists for litigation, private cash sales, large acreage tracts and specialty property types. Please consider us when looking for an independent provider. We hope that you have found this article to be helpful.

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