What is the correct order of adjustments in appraisal?

The correct order of adjustments in appraisal is influenced by the fundamental principles of comparability and relevance. In this context, starting with financing makes sense as it can have a significant impact on the sale price of a property. Adjustments related to financing are often made first because they account for the financial aspects that may have affected the transaction, such as interest rates or buyer incentives.

Following financing, the date of sale adjustment is next. This adjustment addresses how changes in the market since the date of the comparable sale might affect its relevance to the current market conditions. Properties sold some time ago may be valued differently today due to market trends or economic changes.

Next, adjustments for neighborhood and location are considered, as these factors contribute significantly to a property's value. Properties in different neighborhoods or locations may have inherent differences that affect desirability and value.

Finally, adjustments for physical characteristics, such as size, layout, condition, and other property-specific attributes, are made. These adjustments are generally more straightforward and deal with the tangible aspects of the properties being compared.

By following this order—financing first, then date of sale, followed by neighborhood and location, and concluding with physical characteristics—appraisers can systematically and logically account for the differences between properties to arrive at a more