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  #1  
Old 10-25-2011, 12:16 PM
billmcevoy's Avatar
billmcevoy billmcevoy is offline
 
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Default log home on a lake

Have a log home on a lake. After much trial and tribulation the appraisal was put together without any log comparables. None existed in a similar locale.

Have an underwriter, justifiably, asking for an additional comparable sale that is a log home - conventional mortgage, you know how it goes.

I can answer that there are none; technically there are no log comparables.

I can go to a lake many miles away and produce a sale that is a log home and add it with commentary explaining that it is not considered to be a comparable and is added at the underwriter's request.

or I can?

This is argumentative to say the least, on so many levels that I am only begining to imagine.

I am posting here in an effort to garner some feedback.

What say you all, what would you suggest I do? What would you suggest I should have done?
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Old 10-25-2011, 12:21 PM
BOCK FOLKEN BOCK FOLKEN is offline
 
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Default

Quote:
Originally Posted by billmcevoy View Post
Have a log home on a lake. After much trial and tribulation the appraisal was put together without any log comparables. None existed in a similar locale.

Have an underwriter, justifiably, asking for an additional comparable sale that is a log home - conventional mortgage, you know how it goes.

I can answer that there are none; technically there are no log comparables.

I can go to a lake many miles away and produce a sale that is a log home and add it with commentary explaining that it is not considered to be a comparable and is added at the underwriter's request.

or I can?

This is argumentative to say the least, on so many levels that I am only begining to imagine.

I am posting here in an effort to garner some feedback.

What say you all, what would you suggest I do? What would you suggest I should have done?
Often the are just looking to make sure log homes are in fact "marketable". I would add the one you know about, explain as necessary, and move on.
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  #3  
Old 10-25-2011, 12:22 PM
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Default

I once had a similar problem. I went so far as to go to a log home dealer who provided a list of sales of log home kits, and where they were being built. That at least proved marketability.
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  #4  
Old 10-25-2011, 12:55 PM
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It may be necessary to go back further in time or more distant in order to locate a log home. You could also provide a lot home that does not have a lake front location and make a large adjustment. They just need to have one sale that is similar in design and quality so they can check it off of their check list.
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Old 10-25-2011, 03:18 PM
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Default

Had a similar experience. Log home on 10 ac. No log home comps for at least 15-20 miles and in very different marketing areas. Completed report in a similar fashion as you, got the same phone call.

I told the UW that I could use a log home sale (explained that it wasn't a comp) if they insisted but the fee would be an additional $100 since the log sale wasn't a comp, just a sale, that it was located 45 minutes one-way, and that the best comps in that rural area were already in the report.

They said they NEEDED a log home sale in the report and they'd pay the $100. So I did. It added nothing of value to the report but the UW was satisfied.
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  #6  
Old 10-25-2011, 03:35 PM
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What type of "log" home was it. Stick built with log siding, D-Log construction, full log stack wall, log accents like posts, headers, trusses, etc......
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  #7  
Old 10-25-2011, 03:45 PM
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Default

Post n' Beam log, oak log, spruce log, mahogany log, how the log is milled for all I care. The MLS and agents don't know so I can't trust any COMP to be a comp unless I see it up front and personal, which as we all know is almost impossible for a log (seems the buyers like the woods, deep in the woods).
I think the best way to handle it is right at the bottom of page 1, spell out Log Homes are yadda yadda yadda etc. And include they are still marketable. (for about 5% of buyers in my market) lol
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  #8  
Old 10-25-2011, 04:18 PM
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I look at it from 2 perspectives. I have no problem going further back into time and/or expanding my search criteria into every competitive/similar market in order to provide a comparable. There may be larger adjustments for some of these "comparables" but I'm comfortable doing that so long as they are comparable.

On the other hand, I will not shove a property into the lenders hole simply to meet some guideline that they have regarding design, age, acreage, proximity, date of sale, etc. If the client/lenders guidelines limit the type of properties which they are willing to finance, that is not my concern. I'm required to provide properties which are comparable, not properties which the lender needs in the report to make the deal fly. For reference, read cert 7 on the 1004, or better yet, have the client do so.
  #9  
Old 10-25-2011, 04:45 PM
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Quote:
I can go to a lake many miles away and produce a sale that is a log home and add it with commentary explaining that it is not considered to be a comparable and is added at the underwriter's request.

or I can?
Compare the non-log lakefront prices in that area to the non-log comps in your area that you used.

It could confirm the market reaction (if any) which you can extract.
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  #10  
Old 10-25-2011, 05:32 PM
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Quote:
Originally Posted by billmcevoy View Post
I can go to a lake many miles away and produce a sale that is a log home and add it with commentary explaining that it is not considered to be a comparable and is added at the underwriter's request.

or I can?
In MN, I do a lot of lake homes and it is not unusual to go many miles for comps. Lakes only hold so many homes and you have to do what you have to do. Why do you say that sale is not comparable? Is the lake have similar waters, ammenities, demand, etc? That's what you need to make sure you adjust. It may be a very good indicator of value.
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