1. Welcome to AppraisersForum.com, the premiere online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Six condo units

Discussion in 'Urgent - Help Needed' started by teknekjeff, Oct 19, 2011.

Thread Status:
Not open for further replies.
  1. teknekjeff

    teknekjeff Sophomore Member

    0
    Sep 25, 2007
    Professional Status:
    Certified General Appraiser
    State:
    California
    I am being asked to do the appraisal on six condo units in a twenty unit project. All six of the units are under the same ownership. I was told by the client I have to provide an addendum addressing the following issue. with 5 or more units, federal regulations require an appraisal reflecting holding/sellout costs and appropriate discounts. Can anyone comment on this requirement.
     
  2. Restrain

    Restrain Elite Member

    29
    Jan 22, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Florida
    I would not try to argue. Rather, incorporate this in your SOW, and proceed onwards. Look at the probable absorption rate, marketing costs, holding costs, etc, to generate your discount.
     
  3. Don Clark

    Don Clark Elite Member

    13
    Jan 17, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Virginia
    Have NOT run across thios before. However, I would suggest consultation with a general partnership in a CondoTel operation. I would bet bthey know what is required as they deal with multiple owners, and likely have sold 5 or more units at a time. I might also suggest that a financial consultant might know what paperwork is required.

    To be honest, it sounds more like you need to get that information from the owner of multiple units. Once you know exactly what is required you can likely produce what they want. I have done several units in a CondoTel in the past but no current experience.
     
  4. teknekjeff

    teknekjeff Sophomore Member

    0
    Sep 25, 2007
    Professional Status:
    Certified General Appraiser
    State:
    California
    Thank you for the comments. Have any of you heard of this federal requirement. If so, do you know where I can find it.
     
  5. Pittsburgh Pete

    Pittsburgh Pete Elite Member

    65
    May 6, 2008
    Professional Status:
    Certified General Appraiser
    State:
    Pennsylvania
    Conceivably two different approaches--one acknowledges the discount inherent in the sale of multiple units to a single buyer--the other acknowledges selling them off over time to six separate buyers which would require acknowledging holding costs, costs of sales, and the time value of money.
     
  6. Pittsburgh Pete

    Pittsburgh Pete Elite Member

    65
    May 6, 2008
    Professional Status:
    Certified General Appraiser
    State:
    Pennsylvania
    Don't know of the requirement. However, general appraisal theory would dictate acknowledging the discounts or the holding/sellout costs.
     
  7. Restrain

    Restrain Elite Member

    29
    Jan 22, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Florida
    This may be a federal banking reg. We had this a lot in commercial appraisals during the 80's.
     
  8. Pittsburgh Pete

    Pittsburgh Pete Elite Member

    65
    May 6, 2008
    Professional Status:
    Certified General Appraiser
    State:
    Pennsylvania
    R41-C?...............
     
  9. Ken B

    Ken B Elite Member

    109
    Feb 18, 2004
    Professional Status:
    Certified General Appraiser
    State:
    Florida
  10. Terrel L. Shields

    Terrel L. Shields Elite Member
    Gold Supporting Member

    415
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    Ken B is right on...
     
Thread Status:
Not open for further replies.

Share This Page