Quote:
Originally Posted by Twobeach
...system to Really Price Homes and their Values Correctly, like a Blue Book?
How can you compare a Victoria to a Split Ranch?
a home built in 1930 to 1977?
A totally renovated home to fixer upper?
Pool No Pool?
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Hypothetically speaking, if your idea was the rule of thumb, then there will be more of a 'central characteristic' associated. The association would be similar to the stock market, except Real Estate is not movable like the other recognized markets such as the stock market, as well holding significant elements and units of comparison, including property rights attached. The 'central characteristic' would be similar.
It would be nice to act on that behavior. The fact is, the immovable real estate market does not have a strong central tendency as it relates, due to the pure nature of Real Estate. This particular idea was floated around a very long time ago. It is a nice suggestion, and your idea certainly does have merit in that regard.
With this said, The Real Estate Appraiser and their organizations have not discovered a way to centralize the market. Your idea strongly portrays an idea to centralize. To clarify further, there is not a standard adjustment checklist and/or blue book standard, even within a single neighborhood or subdivision. Location is observed from a national, regional, metro, suburb, community, town, economic neighborhood, placement of property within the neighborhood, placement within subdivision, and placement upon the site. There is not a one size fits all. Overall, centralization, up to date, does not exist.
The common/basic elements and units, are as follows:
BASIC ELEMENTS OF COMPARISON (analysis of whole residential properties)
1.) Location (read above)
2.) Property Rights (examples are your bundle of rights, mortgage notes, title, taxes, partial interests, undivided interests, ownership, deed restrictions, and so forth)
3.) View
4.) Design
5.) Quality Of Construction
6.) Condition
7.) Functional Utility
8.) Heating/Cooling
9.) Energy Efficient Items
10.) Garage/Carport/Driveway (parking)
11.) Porch/patio/Deck/Sun Porch/An Adequate Overhang (anything similar)
12.) Appliances
13.) Affixed Site Items
14.) Topography/Terrain/Soil/Drainage
15.) Public Streets/lighting/And Access
16.) The Phyical Make Up (foundation exterior, interior, ceiling, roofing, mechanicals, flooring/subfoor, eaves, facia; material, physical make up)
17.) Contributory Items (gutters, fire place, in ground swimming pool, Barn, and affixed additional amenities, etc..)
Definition of Functional Utility: The ability of a property or building to be useful and to perform the function for which it is intended according to current market tastes and standards; the efficiency of a buildings use architectural style, design, and layout, traffic patterns, room placement, structure placement, the size and type of rooms.
BASIC UNITS OF COMPARISON (analysis of whole residential properties)
1.) Sales Price
2.) Sales Per Gross Living Area
3.) Sales Price Per Site/Land Area
4.) Date Of Sale
5.) Proximity Of Properties And Subject Property
6.) Site Area Per Square Foot or Acre
7.) Above Grade Room Count (Bedrooms and Rooms
8.) Above Grade Bath and Rest Room Count
9.) Above Grade Gross Living Area (GLA) Per Square Foot
10.) Actual Age, Effective Age, Total Economic Life, and Remaining Economic Life.
11.) Below Grade; Basement and Other Finished Areas, Per Square Foot.
12.) Attic (if any) And Finished Attic Per Square Foot
13.) Replacement and/or reproduction
BASIC CONSIDERATION OF DEPRECIATION (for all types of properties)
1.) Physical Depreciation (Curable and Incurable)
2.) Functional Obsolescence (Curable and Incurable)
3.) External Depreciation (Not Curable, and typically found when comparing two approaches to value, and having specific sales to observe)
4.) Super adequacy (which can be functional obsolescence)
Brief Depreciation Note: Physical Depreciation can be distinguished between long lived and short lived.
BASIC INCOME CHARACTERISTS ANALAYZED (the following list is very short, and does not include all basics -- for all types of properties):
The income can expand, and change, units and and elements. Basic, or common ratios should be observed and measured.
1.) Holding Periods
2.) Vacancy Rates, Fluctuations, And Credit Losses
3.) Income Streams (Potential, Effective, Met operating, Cash Flows Before And After Taxes, Etc..)
4.) Expenses; Fixed and Variable
5.) Reserves
6.) Ratios And Rates: Capitalization, Overall Rates, Expense Ratio, Loan To Value, Mortgage Constants, Equity Rates/Dividend Rates, Risk Rates, Mortgage Interest Rates, Safe Rates, Competitive Rates Such As CDs And Bond Rates, Discount Rates, Inflation Rates, And So Forth.
7.) Straight Line Factors, Year Factors, Six Functions Of A Dollar Factors, Reversion Factors, And So Forth.
8.) Physical Ratios, Such A Building To Land, Parking Space Ratios, And So Forth.
9.) Lease Terms
10.) Costs And Depreciation Play Major Roles
11.) On And On...
General Disclosure: These common/basic elements and units, as well as depreciation, are what they are, they are common and/or basic. Further; these elements and units, and depreciation are associated with a number of sub-categories. Elements and Units can be expanded according to per assignment or case and/or property. Many Units and Elements Are Expanded Via the Costs Approach To Value and Income Approach To Value. In essence, there a basics, and there are additional concerns -- I am not, overall, presenting the whole picture by no means.
General Note: Some Appraisers may consider a few items as a unit and not an element, when compared to my list, which is OK. Some Items can be reflective of an element or unit.
Sources: Professional Real Estate Appraisal Texts, Real Estate Appraisal Dictionary, Professional Real Estate Appraisal Forms (URAR 1004 Form/Sales Comparison Approach Adjustment Grid), as well As my own experience practicing Real Estate Appraisal (my Excel Work Book).
I am not attempting to discourage anyone from the public. This is neither an Appraisal nor consultation (very far from it), and this post does not make up everything involved to make an adjustment, find value, and anything similar (very, very far from it); this post simply contains facts of a portion of elements and units that would be included in a (hypothetically) centrally influenced, blue book. A system would be intertwined with complexity, as there is no simple solution to your question. Any analysis is much more complex than any showcase of elements and units involved, as well. I want to give you facts and assist your thought process.
The following questions, which you had posted in relation to your overall question, can be answered through Economic reasoning, Economic logic, and Appraisal/Property Economics:
How can you compare a Victoria to a Split Ranch?
(there may be no reason to rely fully on comparisons when costs and depreciation are involved)
a home built in 1930 to 1977?
(effective age can help)
A totally renovated home to fixer upper?
(effective age, condition, costs, depreciation, various cost analyses, before and after analysis, can get you started at the heart of an analysis)
Pool No Pool?
(this one is easier than it looks, but it can still be complex due to what is performed before finding the adjustment, if any)
I wish I can tell you that it was simple enough as saying "it is worth whatever a buyer is willing to pay." The fact is, in reality, a property is not worth whatever a buyer is willing to pay. This saying was wrong when it was first said, and it is still wrong today.
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,,The fact that a home is located on the same block, on perhaps waterfront, means nothing if there are so many variable differences
. Plumbinmg for example in the 1930 home is hanging on by a thread 
compared to the 1977 home were it is copper instead of cast iron. The older home probably has asbestos the new none. Voice your opionion!
So, no you can't compare them. Again, your house is worth exactly what someone is willing to pay for it. If you have a buyer in this market, treat them kindly. They might not come back and not too many other people are going to step up.
