Only heat source is wood

[Tim Schneider]

Thanks to all who replied. My plan is to describe what it is, and that it is not typical for the market. Then, make an adjustment under the heating line based on the cost to retrofit the typical LP forced air system ($3,000) for any comp which has the typical heating system. I have not found any comps that have wood only. If they are out there, I doubt any realtor would include that in the MLS listing.

 

[Ray Miller]

I am working on a property that has a old oil furnace that per owner is inoperable and hasn't been run in 30 years. They have a wood burner in the basement that is connected to the forced air system. They burn wood as the only source of heat. Is this scenario acceptable for secondary market (fannie)? I want to have good info before I get back to the bank about the status. Thanks.

This very common in rural Wisconsin. Many of the new homes being built are using outdoor wood burners to fire the boiler to heat the home. Many have wood burning furnaces inside the home, many have Franklin Stand alone wood burning stoves and many have fireplace that are the primary heat source.

Some use electric and gas to back up the primary wood system, some do not.

I would just move forward and complete the report noting the wood fired heating system, explaining it and putting pictures of it in your report. Let the banker worry about accepting it for a loan or not. It’s your job to appraise the subject and report what you find.

As to what effect it has on value, I have found it to have none in the rural areas I cover. Matter of fact the neighbor who built to the west of us uses a wood fired boiler to heat his $350K home. Same for the new neighbor to the east of us that is building now.

Now one problem you might have is zoning so be sure to check the township zoning. Spring Green and Clyde just past new regulations and have band the use of wood heat in homes as the primary source of heat. There target was the outdoor fired boiler system, too many people who moved into the area from Madison did like the smoke this past winter in the air. But there regulations that they past caught all types of wood and pellet heating systems. I think it is going to be a messy court case with the cost of LP now.

 

[Ray Miller]

Thanks to all who replied. My plan is to describe what it is, and that it is not typical for the market. Then, make an adjustment under the heating line based on the cost to retrofit the typical LP forced air system ($3,000) for any comp which has the typical heating system. I have not found any comps that have wood only. If they are out there, I doubt any realtor would include that in the MLS listing.[/quote]


Tim,

You got to be careful. Many of the MLS that say FWA/CA are in fact wood fired systems, many that say H2o Raident Heat are wood fired systems. When checking the comparables you got to get out of the car/truck and take a look around the sale you are selecting as a comparable. Sometimes I take a picture of the small garden shed looking building with the smoke stack coming out the top to show that the comparable is in deed a wood fired system if the boiler type. The others I like to catch a picture of the smoke stack on the top of the house, vented throught the fireplace stack or the pellet stove stack comming out the side of the home.

Many do not have any back up systems. With these the owners use some stand along electrical heat source incase they wood burns down or for some reason they don't get home to add wood to the fire.

We back ours up with LP set at 40 degrees to come on, but at the same time I have those electrical raidiators type units in the pump room to keep that warm if the LP system fails to come on.

I am getting ready to install a free standing pellet stove in my basement to agument the wood stove on the main level. The wood stove I need no electrical to keep it burning by the way. It will run you out of the upper level when burning.

 

[Mike Boyd]

[QUOTE. It will run you out of the upper level when burning.[/QUOTE]

.....to get another load of firewood!

 

[CANative]

I always just adjust comps with forced air systems versus wood heat by the full cost of installing the system (except in "cabiny" type properties or modest hovels). It's just common sense that someone would rather turn a switch then lug a bunch of heavy, dirty, splintery logs every day.

 

[PropertyEconomics]

I always just adjust comps with forced air systems versus wood heat by the full cost of installing the system (except in "cabiny" type properties or modest hovels). It's just common sense that someone would rather turn a switch then lug a bunch of heavy, dirty, splintery logs every day.

Do you have market evidence this is true, or is this just something you do based on your own opinion?

 

[CANative]

Blah, blah, blah. Who cares? Who's going to get excited enough to sue my E&O or open a state investigation over a reasonable adjustment for an obviously less than favorable property condition?

 

[c w d]

I always just adjust comps with forced air systems versus wood heat by the full cost of installing the system (except in "cabiny" type properties or modest hovels). It's just common sense that someone would rather turn a switch then lug a bunch of heavy, dirty, splintery logs every day.

I actually enjoy cutting, chopping and stacking wood; all done manually. Regardless, I would not want to HAVE to do it day in, day out.

PropertyEconomics: This is not the first time I've seen an appraiser adjust for differences on non-central a/c at full cost to refit with a modern central a/c system. I would consider it a reasonable adjustment. The problem with proving it with actual market data is that, at least in my area, the typical segment of buyers that purchase homes without central a/c are rehabbers who immediately put central a/c in the dwelling. Finding a home that sold in an arms length transaction without central a/c is near impossible as these homes cannot compete with a market that expects central a/c. Therefore even if you found it the sale would not be typical. So, it is reasonable to conclude that market reaction to a home without central a/c is directly proportional to the cost to install said system without better data. Central a/c is not like a pool or a porch or a design or quality of construction. In the typical market all typical homes will have it. In the typical market not all homes will have a porch or a pool nor do most home owners require them. So therefore the market reaction is typically less than the actual cost to install a pool or porch.

 

[Ray Miller]

In our market in rural Wisconsin I don't feel that an adjustment is called for because wood fired systems are quite common. Both the one's with the outside boilers and the ones with wood burning furance in the basements.

Now maybe Ca. has just not caught up with us.

 

[Otis Key]

<snip>This is not the first time I've seen an appraiser adjust for differences on non-central a/c at full cost to refit with a modern central a/c system. I would consider it a reasonable adjustment. The problem with proving it with actual market data is that, at least in my area, the typical segment of buyers that purchase homes without central a/c are rehabbers who immediately put central a/c in the dwelling. Finding a home that sold in an arms length transaction without central a/c is near impossible as these homes cannot compete with a market that expects central a/c. Therefore even if you found it the sale would not be typical. So, it is reasonable to conclude that market reaction to a home without central a/c is directly proportional to the cost to install said system without better data. Central a/c is not like a pool or a porch or a design or quality of construction. In the typical market all typical homes will have it. In the typical market not all homes will have a porch or a pool nor do most home owners require them. So therefore the market reaction is typically less than the actual cost to install a pool or porch.

CWD - what is typical, normal and accepted in your market? That's where and what you look for.