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  #1  
Old 07-30-2005, 06:36 PM
Austin Martin Austin Martin is offline
 
Join Date: Oct 2004
Location: Iowa
State: Iowa
Professional Status: Certified Residential Appraiser
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Got an order to appraise a 3200 sq.ft pole builidng in town that was once a pawn shop. Today it has been remodeled and is now half living quarters. It is no longer a business It is located in an area where anythng goes as far as zoning is concerned, stick built housing, manufactured homes commercial ect. My town is under 10000 people. I have never appraised anything like this. I have looked back the last 5 years in both residential sales and commerical sales. So far no luck. Any suggestions??
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Old 07-30-2005, 06:53 PM
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CANative CANative is online now
 
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Isn't this the time of year you take a 3 week vacation?
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  #3  
Old 07-30-2005, 08:03 PM
Randolph Kinney Randolph Kinney is offline
 
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Location: SoCal
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Where is Ray Miller? I thought he was the only one that gets these kinds of complex assignments.
  #4  
Old 07-30-2005, 08:24 PM
Edd Gillespie Edd Gillespie is offline
 
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Location: Kansas Territory

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Sounds like some quality of construction issues may be looming for you and some functional ones too.

I had one once that is 1/2 commercial and 1/2 residential. The lender tried hard to convince me it wasn't that, but finally said he couldn't place a loan on a mixed use property, it just really needed to be an SFR and if I couldn't make it an SFR he couldn't use my appraisal. I don't suppose you could be so lucky. Does your client know what it is?

Got any other weird situations like straw houses or stick houses or something else that is odd that would show some kind of market reaction to funny stuff? Got any barns with living or office quarters, or garages with lofts? Anything that wasn't meant to be lived in but is and then sold?

I got one now that was partially destroyed by fire and partially re-built, no central heat, charcoal decorating. No comps for that either. Might be land value and a garage and driveway only. I think the market will say it's completely depreciated even thought there has been some work done on it that is pretty good. But I'm sure the owner won't. On man's castle, it is. This lender will use anything for pretend collateral. So, I said, self, take pics, many many pics.

Like Greg said. Wasn't your vacation scheduled this week and next and so on?

How are you at being the bearer of tidings?
  #5  
Old 07-30-2005, 08:31 PM
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Charles Witt Charles Witt is offline
 
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Location: Delaware
State: Delaware
Professional Status: Certified Residential Appraiser
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Geez! A pole building and half a house? I once appaised a home in town with a room unheated off the kitchen that was used for a chicken house?room?coup? I guess that is no different than some of the New England homes with a barn attached.
  #6  
Old 07-30-2005, 09:58 PM
Austin Martin Austin Martin is offline
 
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Location: Iowa
State: Iowa
Professional Status: Certified Residential Appraiser
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Perhaps the cost approach is important here? I dunno. In one since the finished part is somewhat similar to a manufactured home. The unfinished part just storage or garage. Maybe I can use a manufactured home with a large pole building only problem is that they are not normally attached.. The lender is local so they know or should know what the property is. My mentor appraised it a few years ago I remember when it came in and I thought to myself "self I sure am glad I dont have to appraise that" little did I know...
  #7  
Old 07-30-2005, 10:58 PM
roger hughes roger hughes is offline
 
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Austin, you just never know what you will see on these threads. boy howdy. It may just be a highest and best use question. Not knowing all the facts and not wanting to lie to you. I'd say run like hell. But a pole barn with split use. I've done farms with barns, sheds, acreage and home. but home had sow pig in kitchen with 22 little pigs. Farmer says to keep them warm by wood stove. I've send a billy goat on the couch with the kids watching tv. Not to mention vietnam pigs in the homes. Found dead animals in closets of repo. plus i did a dome home one of a kind. but living in a converted pole barn, not happened yet. Maybe you and lender, if close, should take a ride out to this very destinctive home and bite off some beachnut twist and chew over it. I would like to know the final outcome. roger in middle tn.
  #8  
Old 07-30-2005, 11:01 PM
Edd Gillespie Edd Gillespie is offline
 
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Quote:
"self I sure am glad I dont have to appraise that"
That'll teach you to be grateful, but wait what did your mentor do? I can't believe I said that.
  #9  
Old 07-30-2005, 11:03 PM
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VolcanoLvr VolcanoLvr is offline
 
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Location: Inside the ring of fire
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Austin....out here in NW WA where I practice, pole building residences are common and accepted.

These are questions for your analysis, with answers included in your report:

Make sure yours is an approved building which meets jurisdictional codes and has permits for the construction and remodeling. Otherwise it's probably not loanable. Find this out immediately!

I believe you said its in an area of 'anything goes' zoning (or lack thereof). Are there other similar dwellings in the area used as yours is? Good if they've transferred w/in 2 years, but if not, cite them in your addendum and spend a good deal of space describing them/uses. Take photos and include them also as back-up data.

Next, how is it finished? Typical drywall or paneling over proper insulation? Is wiring & plumbing up to code? Floor finishes, counters, cabinets & vanities typical? Typical heat source? Typical water source and sewer/septic? Does it properly function like a typical residence, even though it may not look like a typical home in the area?

What type of siding and roofing does it have? Typical windows?

How is the area not used for living space in the structure utilized? Garage, storage, or??? Is that typical in residential areas or in the area of mixed uses? Is evidence of prior use as a commercial structure (signs, etc.) removed?

Is the site typical for a residence? Such as fencing, lawn, off street parking, driveway, landscaping, etc. Describe that in your report.

If indeed this qualifies as a residence, compare it to other typical dwellings of similar GLA, BR & Ba count. You might need to make a Quality of Construction adjustment if you feel it's warranted, but only if you can substantiate that the construction is less than typical. But since this is built on-site, using manufactured homes as comps is not recommended.

I don't believe the cost approach is too helpful in this situation. The sales/market approach has the best indication of value, providing of course, you can find workable comps to support it. Also look for listings of similar properties being sold, or drive the area and watch for signs. Talk to the owner to get data.

Finally, if this is indeed a 'pink horse', it's probably going to take a bunch of extra research to enable a credible report. Bill your client more than your typical fee!

This may be one to save in your file of challenging reports! Keep your eyes open and disclose, disclose, disclose!

Good luck, and 'holler' if any of this helps or you'd like to chat more.

Dave Towne - Cert. RE Appr.
Mount Vernon, WA
dtowne@fidalgo.net
  #10  
Old 07-31-2005, 06:08 AM
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Richard Carlsen Richard Carlsen is offline
 
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Austin,

While Dave has given you some very good suggestions on appraising "pole building' construction, I have to disagree with him on the use of the cost approach. It seems that we run into a pole building constructed house every year. Without any real sales to determine the markets reaction to such properties, about the only thing you have to fall back on is the quality difference between the pole building and the site built building.

My solution is that we are lacking any hard core market data, I make an adjustment that is equal to the difference in the cost approach of the two qualities of construction. This goes in the grid under quality. Without any relevant sales data, this is the next best indicator that you have available. It is applied in the grid under the Principle of Substitution. Not perfect but it is the best that we have.
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