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What are a property’s characteristics? True, they include such things as GLA, quality of construction & finish, number of bedrooms, and so forth. But those are just some of the property’s physical characteristics. Really, there are more. The problem is, sometimes appraisers see the physical characteristics as paramount. But we can ignore the other important characteristics, either!
Second of a property’s characteristics are its legal characteristics. The big one is the property’s zoning. For most single family residential appraisals, this is clear. It’s a house, so the zoning is residential. Ok, that’s clear. But what about that converted garage? That garage they converted into a ADU. That is a physical characteristic of the property, true. But is it legal? Part of an appraiser’s due diligence is to answer that question credibly.
Third in a property’s characteristics are its economic characteristics. We appraisers give way too much weight to physical characteristics. We give way to little to economic characteristics. What are some? What would the property rent for? It does not rent since it is owner-occupied, you say?. But that’s not the question. What would the property rent for if it were vacant and available? To answer that question is going to take some work. Check out MLS? Yes! Check out CraigsList? Yes! The point is, the data are out there. We just have to look for them. Remember, Fannie Mae (or whoever the client is) pays for more than data. The client can likely access the same data we can. We provide analysis and interpretation.
We analyze a property’s characteristics to know they are, true! But we analyze them for more than that! That analysis shows us the characteristics that are important to value and marketability. Moreover, it also shows us the characteristics that are not! Then, we interpret those analyses.