3rd bedroom - worth $100k or $20k

[George Hatch]

TBH, in that price range the $100k or $120k difference wouldn't surprise me at all.

 

[DWiley]

All I know is $45 per SF adjustment for condo unit in a high-rise selling above 700 per SF doesn't sound right to me.

LOL. And $90/SF does not seem any more plausible. SMH

 

[LynnCondoOwner]

No - there are very very few 3lb bedrooms in condos in entire area.

Did either appraisal have a 3 bedroom sale?

Our building has 3 - 3 bedrooms and the rest are two bedrooms, the rest of the buildings in same location along beach are all 2 bedrooms

both appraisers used the same comp in our same building.
B - added $100k for 3rd bedroom based on 2017 sale of a 3 vs 2 and $30 sq ft
A - added $20k for 3rd bedfoom based and $90 sq ft

there are other confusing points - but we are just more confused about the bedroom. seems random to use one sale from 2017 when we know there was litigation on both sales at that time based on a special assessment.

 

[Joe Flacco]

LOL. And $90/SF does not seem any more plausible. SMH

Yeah, both of them seem very questionable.

 

[LynnCondoOwner]

It probably makes sense to develop the income approach for a condo on the beach. At least look at rents for clues to adjustments.

most of the buildings do not allow weekly, its rare to see a summer rental in a condo here

 

[Surf Cat]

Our building has 3 - 3 bedrooms and the rest are two bedrooms, the rest of the buildings in same location along beach are all 2 bedrooms

Well......there's a big stick in the spokes. Lol

I don't know your area, but here, I would expand the parameters of time and distance to find three bedroom condo sales. Even if I had to make location adjustments....

 

[Joe Flacco]

most of the buildings do not allow weekly, its rare to see a summer rental in a condo here

It is a difficult appraisal.

I would generally look at it the way Appraisal B looked at it. But since the prices changed so much between 2017 and today, I would probably look at it as the three-bedroom 1,500 SF unit sold for 30% more than the two-bedroom 1,100 SF unit in 2017. Not the three-bedroom unit sold for $115,000 more than the two bedroom unit.

For this specific appraisal assignment with the data available, it doesn't matter what portion of the difference is due to extra bedroom and which portion is due to SF.

 

[David S]

Looking for some help in Maine. We have a condo on the beach that we inherited, are trying to determine the value and then one buy the others out. we have two appraisals from licensed appraisers. one makes sense, the other seems to have funky assumptions. we have agreed on three and take the average. but the funky assumptions on appraisal two has caused us to pause.

this is a condo in a small high rise, there are about 10 of these small (7-10 story) high rises along the beach. most all are two bedrooms, just a few three bedrooms in the area. We have three bedrooms.

both appraisers used the same comp of a recent sale in the building...
other unit sold for 850,000 - this unit is 2 bedroom, 2 bath, 1152 sq ft.
our unit is 3 bedroom, 2 bath, 1525 sq ft.

Appraiser A - added $20,000 for 3rd bedroom and $33,200 for sq footage.
Appraiser B - added $100,000 for 3rd bedroom and $18,500 for sq footage

Appraiser A - report says:
Based on a sensitivity analysis of comparable paired sales in the marketplace, adjustments were applied to the following physical characteristics: Gross Living Area Above Grade (GLAAG) at $90 per square foot, Bedrooms at $20k, Full Bathrooms at $8K, Garages at $8K per space, and fireplaces at $3,500.
Adjustments for differences in construction quality, if made, were based on the Marshall & Swift Residential CostHandbook, modified for the open market and local area. Adjustments for differences in condition, if made, were the costs estimated to cure those differences based on market perception; they are NOT dollar-for-dollar.

Appraiser B - report says
The last 3 bedroom unit to sell at same building was unit 2A. It sold for $490,000 on 11/16/2017. A 2 bedroom unit sold for $375,000 on 10/27/2017. This indicates a difference of $115,000. After adjusting for gross living area, an indicated value forthe difference between a 2 bedroom unit and a 3 bedroom unit was approximately $100,000.

Appraiser B - seems off base with the statement and it is sort of arbitrary to calculate for a 3rd bedroom that way. Additionally there was a major special assessment (over $100k) that came up right after the sale in 2017 and we know there was litigation regarding lack of disclosure regarding the assessment.

there are some other gross inaccuracies in Appraiser B report - but this is the most glaring.

is Appraiser B correct in making an assumption like above?

Without reading your full post, my feeling 1b->2b, there is about 10% value difference even sq ft is similar because use will be huge difference, 2b->3b, 10% again, 3b+, probably only $30K~$40K difference per bedroom here.

For Multi, as other OP said, always $50K~$100K per bedroom because Multi's most value is per bedroom.

 

[Joe Flacco]

Appraisal B is basically saying that the value of 2 BR 1,100 SF units increased 126% since 2017 and that the value of the 3 BR 1,500 SF units increased 99% since 2017. That very well may be the case.

Anyway, Appraisal B provided reasoning and market evidence for why the 3 BR 1,500 SF unit is worth $118,000 more than the 2 BR 1,100 SF unit. Appraisal A did not.

 

[Joe Flacco]

It might make sense to think about as $850k + $115k = $965k on the low end of the range and $850k x 1.3 = $1.1 on the high end.

Unfortunately, that is probably about as accurate as it can get in this scenario. A 15% range.