Market Models

From the Main Menu go to:
Appraisal — Residential File — Market Models Tab

For Video teaching on Market Models go here.

LandMark supports three Market Models to predict market value for Residential Appraisal: Direct Comparable Sales, Multiple Regression Analysis and Gross Rent Multiplier.

Direct Comparable Sales
Direct Comparable Sales is when the subject’s sales price is adjusted for significant differences of other similar properties.
PRO: Easy to defend to the tax payer.
CON: One outlier can really skew the adjusted value.

Multiple Regression Analysis

Regression Modeling is when a GROUP of sales is regressed out. When building the model, the appraiser would ask, “What components tend to predict value?” (Square Footage, Quality, Condition, etc.)

Multiple Regression Analysis is a tool within the Sales Approach that looks at the relationship between variables to predict value.
PROS:

• Minimizes outliers
• IF the data is good and thoughtful time is spent building the model, this may be the best predictor of value.
• Does well on standard properties (ie. cookie cutter house in subdivision)
  

CONS:

• Doesn’t perform as well on outliers
• Hard to explain to tax payers
  

Gross Rent Multiplier

Gross Rent Multiplier (GRM)
GRM is considered an INCOME approach to value for residential appraisal, however, it doesn’t consider capitalization of income— instead uses a multiplier.
PROS: This is a good tool for areas with lots of rentals and lots of investors in the market, where the appraiser can collect good rent data.

A big deviation in value IF the data input is solid, will indicate something is off with the subject property or model.

Helpful Hint: When user inputs rent data in GRM Table, LandMark will capture that data in the Sales File. That allows the user to build a rent model they could then apply.

To View/Edit these Tables from the Appraisal File go to:
Tables — Appraisal Tables — choose table