Appraise-It follows a simple two-step process when performing automatic bath adjustments. First, it uses the values you specify in the Adjustments addendum to calculate the total value of the baths in all properties; then, it subtracts the value of each comp's baths from the value of the subject's baths. The result is entered as the adjustment in your comp grid.
The first step can be expressed as the equation X + Y = Z, where X is the full bath value, Y is the half-bath value, and Z is the total value. To calculate X, you would multiply the number of full baths in the property by the adjustment value entered on the Adjustments addendum; the same goes for Y, with the partial bath values.
1. With your report open in Appraise-It, go to Contents ⇨ Adjustments, or click the Adjustments icon on the toolbar.
2. Enter the value of a room in the adjustment field.
3. Check the Automatic box.
4. If desired, enter a threshold percentage in the Adjust? column.
5. Close the Adjustments Addendum and navigate to your sales or listings grid, then enter your subject's number of rooms.
6. Enter your comp or listing's number of rooms.
7. An adjustment based on the difference between the subject and comp or listing's number of rooms will be inserted in the adjustment column.
Example 1
Here is a typical adjustment scenario:
The subject has two full baths and no half baths, so X + Y = Z evaluates to 2(4,000) + 0(2,000) = $8,000. Comp 1 has one of each, so we have 1(4,000) + 1(2,000) = $6,000. The value of the comp baths is subtracted from the value of the subject baths, resulting in $8,000 - $6,000 = $2,000, which is entered in the adjustment column.
Example 2
The same holds true in reverse:
This subject is unchanged from our first example, so its bath total value is still $8,000. Comp 1 now has two full baths and one half bath, which evaluates to 2(4,000) + 1(2,000) = $10,000. Subtracting the comp from the subject results in an adjustment of -$2,000.
Example 3
As you can see, the result in most cases is deceptively simple. The result when using a partial bath adjustment that is not equal to one-half of the full bath adjustment is a little less intuitive:
Note that our full bath adjustment is still $4,000, but our partial bath adjustment is now $3,000. Because our subject doesn't have any partial baths, its bath total value is still $8,000. Comp 1 again has one of each, evaluating to 1(4,000) + 1(3,000) = $7,000. When we do our subtraction, we get $8,000 - $7,000 = $1,000, which is entered in the adjustment column.
Example 4
Perhaps most confusingly, you do not get a "mirror image" adjustment value in this case if your comp has one more bath rather than one less. Recall in our previous examples, where the subject had 2.0 baths and the comps had either 1.1 or 2.1, the adjustment amount was $2,000 either way, the only difference being whether it was a positive or negative value. The same does not hold true here:
The subject's bath total value is still $8,000. Comp 1 now has two full baths and one half bath, which evaluates to 2(4,000) + 1(3,000) = $11,000. Subtracting this value from the subject value, we get an adjustment of -$3,000.
Because the automatic adjustments can result in values that are mathematically correct but confusing, most appraisers tend to use a half-bath adjustment which is equal to exactly one-half of the full bath adjustment, as in the first set of examples.
See Also
How does Appraise-It calculate time adjustments?
How does Appraise-It calculate room count adjustments?
How does Appraise-It calculate square footage adjustments?
How does Appraise-It calculate basement adjustments?
