Appraising an outlier properties

[J Grant]

You are correct But lets say I do the DSCA Typical GLA in the development is 1000sf If the property has 1700 You have 700 sf more than typical That may be part of the subjects functional obsolescence The subject has a swimming pool. This development of approx 250 houses has only 3 houses with SWP That might be another one.

Linear regression is not the main instrument to support your opinion of values. but it helps a lot as it confirms that SWPs provide little or no value

I have to use all the waapons that I have to explain that this house is not worth $300k Thanks

The subject may well not be worth 300k , but I do not see why having a swimming pool is funct obs. Why not adjust up for it having a pool and use some comp with a pool to bracket?

It is larger than the others, which may or may not be an over improvement - there is nothing wrong with going to a similar competing area or back in time to see the effect of larger sf - it might deserve being valued for the additional sf ? If nobody is paying for larger homes of that size within x miles maybe it is worthless sf of funct obs, or maybe it is a sf that others besides this one buyer would pay more for - perhaps not as much for as the sale price but it might have some contributory value. -

 

[glenn walker]

Waivers are looking better and better
with each new thread I read on the AF.

It's scary how many are just making up adjustments. Hell let's throw in some extraordinary assumptions into the mix to really blow the Fannie machine up for good.

 

[App601]

Look.... we would like to help you but can't without more specifics.

I don't know where from my questions you got that I was implying you create your own market. Having said that, you didn't answer a single question I had.

I've stated the below several times on this forum and I'll state for you.

All areas from financing to GLA in the market Grid require components of bracketing and or equality and similarity.

The Subject's site and GLA must be bracketed, subject's bedroom count must have some equality with a couple of the comps, subject's bath count must have some equality with a comp or two, subject's location, age, condition, and views must have similarity.

We still don't know why you consider the subject to be an outlier or why you need to know about functional obsolescence.

I was not implying anything about what you wrote If you interpreted as such My excuses I have lot of caution not to insult my colleagues as i hate being insulted
About bracketing, of course I would love to be able to do it But this appears to be the best house of the development and I will not go to superior neighborhoods to fabricate a value ( you dot not imply this)

 

[Fernando]

You need to stop thinking like a computer.
There are reasons why the price is so high. Features that are unique? Owner overpaying? An out of town buyer?
For me, $100K is not much a big cost (I being an out of towner living in area of $2M median homes) if I find subject property very desirable.

 

[App601]

You need to stop thinking like a computer.
There are reasons why the price is so high. Features that are unique? Owner overpaying? An out of town buyer?
For me, $100K is not much a big cost (I being an out of towner living in area of $2M median homes) if I find subject property very desirable.

My responsibility as an appraiser is to defend my client, the bank, so that it does not finance more than what the property is worth and indirectly the buyer so that he (she) do not pat more than what is worth. That s APP 101 ( due respect)

 

[App601]

Better to have the worst house in the best neighborhood than the best house in the worst neighborhood.

Agree 100%

 

[glenn walker]

Agree 100%

That's not always true but your in Puerto Rico and that's a whole different world. You talk about a $300,000 home like it's Beverly Hills prices. Hell a Mobile Home out here in a rented park space is often more than that.

** If I were you I would try to get local appraisers in your area as mentors or to call for advice. Few on AF know anything about your Island or property quirks and your bringing in a Toyota to a Mercedes Mechanic.

 

[Surf Cat]

Typical GLA in the development is 1000sf If the property has 1700 You have 700 sf more than typical That may be part of the subjects functional obsolescence

Okay, now we're getting somewhere.... this property is an "over Improvement" for the development not functional obsolescence. I would certainly do an analysis of the entire development (time does not matter... research all the properties three to five years back if you have to) to make sure that your subject property is the white elephant of the development.

About bracketing, of course I would love to be able to do it But this appears to be the best house of the development and I will not go to superior neighborhoods to fabricate a value ( you dot not imply this)

I disagree. You need to go to different, alternative, competitive areas to make sure that a 1700 sq ft dwelling is an over Improvement.... if you find one, grid it and do a location adjustment. Otherwise, you won't be bracketed.

Also, from the alternative, competitive neighborhoods with 1700 square foot properties, you'll be able to derive a percentage difference between 1,000 and 1700 square foot sales. With this percentage difference, you won't need to use linear regression.

 

[Surf Cat]

Waivers are looking better and better
with each new thread I read on the AF.

It's scary how many are just making up adjustments. Hell let's throw in some extraordinary assumptions into the mix to really blow the Fannie machine up for good.

Geez....you're not kidding....this is really sad...

 

[TerryRohrer]

.... this property is an "over Improvement" for the development not functional obsolescence.

Uhmmmm....