Appraisal Adjustment Calculator

Formula

The formula to calculate the Appraisal Adjustment Factor is:

\[ AF = \frac{P1 - P2}{SQF1 - SQF2} \]

Where:

$AF$ is the appraisal adjustment factor
$P1$ is the price of the more expensive property
$P2$ is the price of the cheaper property
$SQF1$ is the total square footage of property 1
$SQF2$ is the total square footage of property 2

What is an Appraisal Adjustment Factor?

An appraisal adjustment factor measures the ratio of the difference between the price and square footage of two different properties. It’s used to account for any changes in demand that can occur around properties on a short-term basis.

Example Calculation

Let's assume the following values:

Price of More Expensive Property (P1) = $300,000
Price of Cheaper Property (P2) = $250,000
Total Square Footage of Property 1 (SQF1) = 2000 sq ft
Total Square Footage of Property 2 (SQF2) = 1800 sq ft

Using the formula:

\[ AF = \frac{300,000 - 250,000}{2000 - 1800} = \frac{50,000}{200} = 250 \]

The Appraisal Adjustment Factor is 250.