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Old 02-21-2005, 11:31 AM
Kent Faver Kent Faver is offline
Join Date: Aug 2002
Location: Texas
State: Texas
Professional Status: Certified General Appraiser
Posts: 41

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.

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Old 02-21-2005, 12:19 PM
GeorgiaBoy GeorgiaBoy is offline
Join Date: Jul 2003
Location: Fayetteville, Georgia
State: Georgia
Professional Status: Licensed Appraiser
Posts: 383

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.
Old 02-21-2005, 12:22 PM
Join Date: Feb 2002
Location: Haddonfield, NJ
State: New Jersey
Professional Status: Certified Residential Appraiser
Posts: 375


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.
Old 02-21-2005, 12:24 PM
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Robert Anderson Robert Anderson is offline
Join Date: Nov 2004
Location: Angels Stadium

Posts: 1,000


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:

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
Old 02-21-2005, 12:31 PM
Pamela Crowley (Florida)'s Avatar
Pamela Crowley (Florida) Pamela Crowley (Florida) is offline
Join Date: Jan 2002
Location: Wherever We Are Parked
State: Florida
Professional Status: Retired Appraiser
Posts: 25,254

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.
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!"
All that is necessary for the triumph of evil is that good men/women do nothing.
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Old 02-21-2005, 12:57 PM
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Bill_FL Bill_FL is offline
Join Date: Aug 2002
Location: Cliqueville
State: Florida
Professional Status: Certified General Appraiser
Posts: 4,871

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?
Warning: this post not spell checked because I know what I meant to type.
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Old 02-21-2005, 01:38 PM
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David Garza David Garza is offline
Join Date: Jan 2005
Location: Lubbock, Texas
State: Texas
Professional Status: Certified Residential Appraiser
Posts: 121

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 !!! 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.

Old 02-21-2005, 05:13 PM
Mike Garrett, RAA's Avatar
Mike Garrett, RAA Mike Garrett, RAA is offline
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Location: Colorado Springs, CO
State: Colorado
Professional Status: Certified Residential Appraiser
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I suggest you know what it is. Go with your instincts!
A Former AQB Certified USPAP Instructor
Old 02-21-2005, 05:45 PM
Restrain Restrain is offline
Join Date: Jan 2002
Location: Port Charlotte, FL
State: Florida
Professional Status: Certified General Appraiser
Posts: 10,543

Quick definition:

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

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.
Old 02-21-2005, 06:04 PM
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tedwinter tedwinter is offline
Join Date: Jun 2004
Location: Cockeysville, Maryland

Posts: 151

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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