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Definition Of Rural Vs. Suburban

Discussion in 'Urgent - Help Needed' started by Kent Faver, Feb 21, 2005.

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  1. Kent Faver

    Kent Faver New Member

    0
    Aug 16, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Texas
    Hey all,
    Had a large investor reject an appraisal recently because the property lists the subject (and comps) as suburban, and they want the subject and comps to be listed as rural. The underwriter stated specifically "this investor requires this change (to rural) if comps are more than 1-2 miles away." My 5 comps were 2, 3, 5, 5 and 7 miles away - fairly typical for my market for properties of this type. In fact, it is rare for me to have a property IN the city limits with an urban rating with all comps less than 2 miles away.

    The subject in this case is located approximately 1/2 mile from corp. city limits, does use a septic system, is on 3/4 acre, but is in a growth corridor.

    This property easily meets my definition of suburban, and is a far cry from rural. I generally use Page 1 of the URAR as criteria for Rural - % of area built-up, proximity to shopping/employment, etc.

    Anybody else having this issue? I realize it's probably been discussed here before - thanks.

    Kent
     
  2. GeorgiaBoy

    GeorgiaBoy Junior Member

    0
    Jul 23, 2003
    Professional Status:
    Licensed Appraiser
    State:
    Georgia
    I've had people question it before, but I've never changed a report. It is what it is. Distance to comps may be a consideration, but for me has never been the decisive factor whether a property is rural or suburban. I have had subject's that were less than 20 miles from the center of Atlanta where I had to go outside 3 miles for all sales.
     
  3. ROBERT JONES

    ROBERT JONES Junior Member

    0
    Feb 12, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    New Jersey
    Try- RURBAN

    Rural-Urban Fringe (Rurban) - A term derived to describe those areas lying outside but adjacent to cities where the land use is in transition from rural to urban.

    taken from Appraisal Terminology and Handbook - 5th Edition - American Institute of Real Estate Appraisers.


    Bob Jones

    ps this is an old edition - the definition could probaly be modified to read .... from rural to suburban.
     
  4. Robert Anderson

    Robert Anderson Senior Member

    0
    Nov 27, 2004
    Kent,

    This is one of those topics that is argued endlessly but never resolved. The latest thread on this topic--which was begun on January 13th in the Urgent Help Forum--is entitled "rural Vs. suburban, urar problem." The link is:

    http://appraisersforum.com/forum/index.php?showtopic=22793

    A search will turn up many other discussions of this topic.

    Your situation seems a little different from the norm in that the lender wants you to change your appraisal from suburban to rural. Normally, it's the other way around. Also, using proximity of comparable sales to the subject as the criteria for suburban/rural is certainly different.

    Bob Anderson
     
  5. Pamela Crowley (Florida)

    Pamela Crowley (Florida) Elite Member

    3
    Jan 13, 2002
    Professional Status:
    Retired Appraiser
    State:
    Florida
    Seems whenever this comes up in either direction, there is a LO trying to force a square peg into a round hole.

    Wanting you to switch it from suburban to rural probably means they are trying to fit this property into a rural loan package. Had one try to do that a couple years ago.

    Just say, "NO!"
     
  6. Bill_FL

    Bill_FL Senior Member

    0
    Aug 23, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Florida
    According to my copy of The Dictionary of Real Estate Appraisal (AI)

    Rural: pertaining to the country as opposed to urban or suburban; land under an agricultural use; signifies areas that ehibit relativey slow growth with less than 25% development.


    Do those properties fit that?

    The UW's have a checklist with guidelines. If the appraisal deviates from it, they ask you to change it.

    How did you write up your comments about the distance from the comparables? Did you adress it other than to say how far they were?
     
  7. David Garza

    David Garza Sophomore Member

    0
    Jan 21, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    Texas
    Kent, I'm in Texas too.....what I find that throws the underwriter off is the well and septic system in a suburban setting. We have a lot of suburban areas in growth corridors that are built with wells and septic systems and the underwriter thinks that it should be a rural property...........they are usually yankees....lol !!! So I mention in the report that it is common in our area that suburban properties have wells and septic systems and that has seem to stop a lot of questions.

    David
     
  8. Mike Garrett RAA

    Mike Garrett RAA Elite Member

    9
    Jan 14, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    I suggest you know what it is. Go with your instincts!
     
  9. Restrain

    Restrain Elite Member

    7
    Jan 22, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Florida
    Quick definition:

    If you can go out back, shoot off your shotgun and not bother your neighbors, its rural. :D

    I've got areas here in the DFW area that have a density of less than 25% but they're suburban due to the growth trends and direction of growth.

    It's just a matter of explaining the market, how the area is changing, growth trends, commuting distances, etc.
     
  10. tedwinter

    tedwinter Sophomore Member

    0
    Jun 7, 2004
    I guess we're lucky in Maryland as many properties in rural areas actually have the word rural in the zoning description. It's pretty hard for an U/W to argue with that. The problems start when you try to convince them of the opposite . . .
     
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