fraud or not on GLA adjustment

[Webbed Feet]

<........snip......>The units I am selling have 9' solid wood doors, 10' ceilings, oak and mahogany parquet floors, custom kitchens, restored victorian home built in late 1800s with original plaster mouldings, tin ceilings. I actually imported the new entry door for the building directly from Argentina. The door was salvaged from a building built in Argentina's heyday in the 1920s.

These are things which sell units in any market. Buyers are pround to own and for 6 months after the sale I get buyers friends calling me up asking if I have other units for sale.

It frustrates me when someone comes in and tries to tell me that a place down the road where you will hear your neighbor **** through the walls, using inferior products and craftsmanship is the same as mine.<...... snip.....>

Spry,

Hold on a moment! ... I missed this post of yours. .. Gosh, I could of sworn you said in your post #20 that buyers ONLY determine price based on total square footage and that all us appraiser types were wet dogs about trying to tell you otherwise.

Is it just me? .. Or do you see that you contradicted yourself?

Webbed.

 

[Fred]

Is it just me? .. Or do you, and anyone else here, see that you contradicted yourself?

Webbed.

I think it may be just you. The guy is not submitting a paper to the Nobel committee for an economics award. I understood him well enough. Square feet of GLA is an important variable.

 

[Fred]

excluding certain places because they are significantly higher priced should be a valid reason to exclude them. Perhaps I am influenced by the NYC metro area I live in, but you can have identical sized condos with the same rooms and they could be priced as far apart as 100k. Concrete and steel construction units carry a big premium to frame construction. Soundproofing, number of windows, quality of fixtures / appliances. Wolf 6 burner stove or midlevel Kenmore? Custom kitchen or home depot special? Steam shower with marble or single diverter and ceramic? Parking? covered parking? garage parking? I don't think appraisers account for all these things when coming up with a value. Buyers know what that is worth and what they are willing to pay for it.

The units I am selling have 9' solid wood doors, 10' ceilings, oak and mahogany parquet floors, custom kitchens, restored victorian home built in late 1800s with original plaster mouldings, tin ceilings. I actually imported the new entry door for the building directly from Argentina. The door was salvaged from a building built in Argentina's heyday in the 1920s.

These are things which sell units in any market. Buyers are pround to own and for 6 months after the sale I get buyers friends calling me up asking if I have other units for sale.

It frustrates me when someone comes in and tries to tell me that a place down the road where you will hear your neighbor **** through the walls, using inferior products and craftsmanship is the same as mine.

If you don't fit the bill for a "prudent" seller, who does?

One other question for all. I have heard through the grapevine that 4 large banks (i won't mention names) have given their appraisers marching orders to find most conservative comps they can then take 10% off the final value. True? You guys being pushed to defend the banks position?

Banks are being more cautious now, then in the early 00's. Plenty of people posting here that some review appraiser came up with a lower ("cut") value that the bank is using. If there is pressure, it is not as overt as what you say.

I wouldn't say it's the bank's position. They can refuse to lend or lend as much or little as the feel like. The could lend 70% or 60%, instead of 80% of value. Although, I could understand an LO wanting to tell you it's the appraiser's fault you can't get as much as you want, rather than I have to look you in the eye and defend his assessment that you are too risky for the best possible deal.

 

[Webbed Feet]

I think it may be just you. The guy is not submitting a paper to the Nobel committee for an economics award. I understood him well enough. Square feet of GLA is an important variable.

Mr. Santora,

Please do not engage me in a forum area where half my posts are being censored and not posted. When I asked if anyone else could see the contradiction I was being rhetorical. The contradiction is obvious. If he can't get it when appraisers are trying to tell him there is more than just square footage, he persists with disagreeing, and then brags about an antique door from the 1920's imported from Argentina .............................we can't help him.



Webbed.

 

[sprydle6]

Webbed...
I am a frustrated developer, but you are a serious cynic. Price per sq ft is the most important variable. That is how people assess each and every unit they walk into. Then they do some justifications on the spot. "Range for a 2BR / 1 Bath is $300 - $380 sq ft. This guy is asking $350 sqft. The finishes are nice and the location is great so ok that is a fair price."
Then here is the other side of the coin. they measure the space and find that I overstated the sq ft of the unit. they see I am trying to get $390 sqft. This is where the buyer will adjust and start deducting from the ask price.
I think that should clear things up in your mind.

 

[sprydle6]

Another thing about the price per sq ft issue. if it isn't a valid way of assessing value why do my architects use that when assessing the cost of construction? Why do my builders, insurance agents, tile guys, flooring contractors, and every other trade under the sun value their work in that manner. It just doesn't seem rational that a GLA adjustment of $55 sq ft is realistic when "cheap" construction costs $100 a sq ft for vanilla box construction... not including kitchens and baths... those require amounts in addition to the $100 sqft.

 

[sprydle6]

oh. btw guys... BOA sent another appraiser in today. The new appraiser looked at the place and said the comps in the area do justify the price. He couldn't say what the appraised value would come back at until he did his work. He was shocked that the previous appraiser didn't include the other unit in the building which SOLD for $325k. I'll know more tomorrow when the new appraisal comes back.

 

[The Warrior Monk]

Sale price per square foot can be a value indicator in certain circumstances, especially with condominiums and coops.

Why do my builders, insurance agents, tile guys, flooring contractors, and every other trade under the sun value their work in that manner. It just doesn't seem rational that a GLA adjustment of $55 sq ft is realistic when "cheap" construction costs $100 a sq ft for vanilla box construction... not including kitchens and baths... those require amounts in addition to the $100 sqft.

This assumes that "cost=value," which it does not. An example of that can be seen in the current real estate market. For example, let's say that condo in FL that an investor bought is worth 30% less than what he paid two years ago. Is that due to contractors reducing their costs by 30%?

The new appraiser looked at the place and said the comps in the area do justify the price.

FWIW, the appraiser shouldn't be making such comments. The goal of an appraiser is to provide an independent opinion of value, not justifying price.

 

[Bill_FL]

Another thing about the price per sq ft issue. if it isn't a valid way of assessing value why do my architects use that when assessing the cost of construction? Why do my builders, insurance agents, tile guys, flooring contractors, and every other trade under the sun value their work in that manner. It just doesn't seem rational that a GLA adjustment of $55 sq ft is realistic when "cheap" construction costs $100 a sq ft for vanilla box construction... not including kitchens and baths... those require amounts in addition to the $100 sqft.

Sprydle,

I will attempt to answer this in very basic terms, not talking down to you, its just that if you do not do what we do, sometimes it can be difficult to understand.

If you look down the sales comparison grid on the appraisal, you will see things like: View, Quality, Condition, Beds, Baths, Square Feet, Fireplaces, Project Ameneties, and other similar line items. The $350 per square foot you quote is inclusive of all of those line items. As appraisers, we attempt to measure what each of those line items contribute to the over all $350 per square foot. In typical residential appraisals, the unit of comparison is the entire sales price, not the price per square foot. So when we make an adjustment on those lines, we tend to make it as what that item contributes to the overall sales price. For example (and I am making up numbers here) Lets say that your unit is 1000 square feet and sold for that number you have used of $350 per square foot. Now, lets say it does not have a fireplace, but one of the comparables did. We would make a downward adjustment to the comparable's sale price. How much? I dont know, but for easy math here, lets use $3500. That changes the "net" price per square foot too.

On the line item for square feet, the appraiser is attempting to isolate the contributory value for just the size differences. Since all of those lien items each contribute some to the overall price, the size difference can not be for the entire $350, but rahter some fraction of it.

 

[Webbed Feet]

"Good" appraisers tell everyone what they want to hear.

oh. btw guys... BOA sent another appraiser in today. The new appraiser looked at the place and said the comps in the area do justify the price. He couldn't say what the appraised value would come back at until he did his work. He was shocked that the previous appraiser didn't include the other unit in the building which SOLD for $325k. I'll know more tomorrow when the new appraisal comes back.

Spry,

If that new appraiser did that, then that different appraiser just violated the Ethics Rule of the Uniform Standards of Professional Appraisal Practice (USPAP) by shooting his mouth off and giving you an oral "not less than" value opinion when you were not his client. He violated his client confidentiality. He failed to complete what we call Standard One. He failed under the Management section of the Ethics Rule by not having a work file for such a scope of work assignment. So in short, all of this makes him a complete total idiot walking around with an appraisers license. If he doesn't understand any of what he just did, how is it he is qualified to report not-less-than values to you that he just pulled out of his ***?

So either you seriously misinterpreted what he said, or he is a dork. If I were you, dealing with someone lacking industry required ethics, I would not be so quick to darn the original appraiser that apparently has ethics in favor of an appraiser that is ethics challenged.

Webbed.