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I need to finds comps with external obsolescence!

Discussion in 'Urgent - Help Needed' started by Scott R Marshall, Sep 28, 2011.

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  1. Scott R Marshall

    Scott R Marshall Senior Member

    0
    Dec 14, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    New Mexico
    This is more of a vent than anything else. Subject is a site built single family residence which is currently bank owned with a purchase agreement in place. The subject is across the street from a high school track. Directly behind it is a large workshop and office with this site sharing the entry driveway with the subject. On one side I have a manufactured home community. On the other side it appears I have a wood workers shop and a parking lot for semi-trucks. So needless to say I have some external obsolescence here, which is pretty much reflected in the subjects sales price.

    The client is stating I need to provide 2 recent comparables with similar external obsolescence. Most recent sale on the street, which pretty much would be the poster boy street for external obsolescence sold in 2003. Not recent enough for the client. I have looked on 2 other streets in the market area which I also know have external obsolescence present for various reasons and still nothing recent. So now I am going through the long and tedious process of "vetting" my comparables by using Google earth and street views to determine if any have external obsolescence but won't really know until I actually go out and shoot the comps. The client is of course in a rush and wants me to say that none exist. But I don't really know if none exist without doing the research, which is taking a bit of time, which the client doesn't want to give me.

    I've put a lot of time into this thing already and really don't want to walk away from it but if the necessary time isn't given and the "requirement" isn't waived, I may just have to do this. What I would have liked to do is look at historical differences in market value of sales on my subject street and these other 2 streets where I know external obsolescences exists to determine a percentage adjustment, which I will still do, but the magical comparables are just not popping up for this one.

    Trying to get an AMC to realize that every home doesn't fit into a nice little box and that additional "requirements" take more time depending on the situation is like trying to get a politician to admit they are wrong.
     
  2. Mr Rex

    Mr Rex Elite Member

    86
    Jan 12, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    Sometimes you have to demand to talk to a full grown gorilla, and circumvent the phone monkeys.
     
  3. CANative

    CANative Elite Member

    62
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Pricing is down to at least 2003 levels so I don't know why that is a bad comps. In any case you could take that 2003 comp and compare to other similar properties without the adverse location and come up with a percentage bad. Then just apply that percentage as a location adjustment to your recent comps. You might have to account for any error caused by the types of market conditions going on in 2003 and today (buyer reaction i.e. buyers market or sellers market.)

    Try it out and see if the adjustment magically makes your value indications reconcile with the purchase price.
     
  4. JamesRockford

    JamesRockford Senior Member

    0
    Oct 22, 2010
    Professional Status:
    Certified General Appraiser
    State:
    California
    Next time I would suggest vetting the comparables and subject prior to accepting the assignment.
     
  5. Scott R Marshall

    Scott R Marshall Senior Member

    0
    Dec 14, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    New Mexico
    Point taken. This is the kind of property that as you drive up your gut begins to sink.
     
  6. Mr Rex

    Mr Rex Elite Member

    86
    Jan 12, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    We've all had them. Recently while out shooting comps I saw a property on the same street as the comp I was using and thought to myself "I sure hope I never get that property as an assignment". Well, within a few months I did, and because it's such an oddity, I'm currently on the 3rd client, 3rd inspection, and 3rd fee. They each continue to try and fit this PIA into a round or square hole. I did discount my fee for the re-inspections, but not much. I have explained in each instance, my liability is with the lender/client that actually lends on this frankenproperty, not the ones that decided the property didn't fit any of their cookie cutter programs or the one that tries to slip it into a bundle sold to a GSE etc.
     
  7. PropertyEconomics

    PropertyEconomics Elite Member

    0
    Jun 19, 2007
    Professional Status:
    Certified General Appraiser
    State:
    New Mexico
    The obsolescence doesnt have to be idential (if there is obsolescence - only data will show that) ... but you could look near industrial areas (South Second Street across from the petroleum tank yards), near north valley (near commercial and older businesses) on both sides of Interstate 40, Isleta along commercial corridor, and others.

    Measuring as a percentage would allow you to apply to the comparables without these "features" and estimate obsolescence. A range can be developed and then a selection of adjustment within that range.
     
  8. J Grant

    J Grant Elite Member

    Top Poster Of the Month

    112
    Dec 9, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    Florida
    I agree with Property Economics. The obs can be equivacol, almost impossible to find identical. A tough assignment for sure. Also, much older sales , if you can find them, if there is a difference between non obs and obs, it is a guide to today's values...and yes, many values have returned to 2002-2003 price levels. (so close to these levels it is scary)
     
  9. Mr Rex

    Mr Rex Elite Member

    86
    Jan 12, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    As always its market specific, 1999-2001 levels here. We didn't have a big ramp up, so the fall has been gentle, if you consider a decade lost as gentle.
     
  10. PropertyEconomics

    PropertyEconomics Elite Member

    0
    Jun 19, 2007
    Professional Status:
    Certified General Appraiser
    State:
    New Mexico
    Im not really sure what "historic values" have to do with this discussion honestly. Why does it matter that current values are near "XXX year" values????
     
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