"Bracketing," explained

The Goldilocks Approach to Appraisals

Just like Goldilocks preferred the porridge that was neither too hot nor too cold, appraisers like to see a home that prices in the middle of its peer group.

In appraiser lingo, such a home is said to "bracket."

In plain English, that means it's priced more than a slightly inferior home, and less than a slightly superior home.

For purposes of doing a Comparative Market Analysis ("CMA"), the subject home's peer group typically consists of the three, most similar closed sales, ideally no further back than six months. Depending on the part of town and activity, sometimes three months is now considered the max.

In fact, the subject home is supposed to "bracket" twice: before the comp's have been adjusted -- and after.

Adjustments are all the things that differentiate the comp from the subject home. It can be another bathroom, more (or less) finished square feet, a new Kitchen, better (or worse) condition.

Regardless, if the subject home doesn't "bracket" a second time, after the comp's have been adjusted . . the deal can be in trouble.

Obama's "Goldilocks" Approach

Obama's Fiscal Stimulus
Splits the Difference

"Obama's economic plan falls well short of what's needed."
--Paul Krugman, "The Obama Gap" (NYT, 1/9/09)

"Obama has vowed to do everything at once . . this will be the most complex piece of legislation in American history."
--David Brooks, "The Confidence Surplus" (NYT, 1/9/09)

Depending on who you believe, President-elect Obama has devised a $1 trillion(!) fiscal stimulus plan that either: a) is much too modest in scope; or b) wildly overreaches.

So far, so good . . .