Comment on Persistent Appraisal Failures: Part 1 by William Bert Craytor

The GSEs have never gotten any of this right. Neither their previous relative nor the current fixed Q1-Q6 quality or C1-C6 condition standards work. You need RELATIVE percentage 00%-99% property ratings for the subject and all market area sales transactions. You can develop these ratings quite objectively for all past sales transaction in a market area through residual analysis using a tool like MARS (Multivariate Adaptive Regression Splines). You need accuracy down to single percentage point to develop values for the upper-end (luxury) and lower-end (fixer) homes, as the value/condition and value/quality curves are typically quite steep in those areaa. For example, in the case of fixers, we have significant cost of remediation/repair issues that correspondingly impact market value. The lack of competence in this area is appalling.

Source: Working RE Magazine