90% rate of return for a pole barn & pool?

[melon]

We have made an offer on a house with a large pole barn in the yard, and an above-ground pool with decking. The seller's realtor has told us that the return on investment for the pole barn (including excavation costs, stonework, stalls, fencing & other items done especially for the owner's semi-truck & dump truck storage) should be 90%. (This home was purchased for $343K in '02) @ 90% return for the pole barn they are expecting $114,000. Is this realistic?

Their realtor has also stated that they should get a 50% rate of return for an above-ground pool, decking, gazebo & hot tub = to $15,000. Is this realistic?

Please help me with understanding this!!!! We need to move ASAP, but cannot believe that this return on investment is accurate come to appraisal time. My lender has verbally told me that this is not at all an accurate scenario. Any assistance would be greatly appreciated!!!!!!!!!!!!THANKS A TON!!!!!!!!!!!!!!!!!!
Mary E.

 

[TJSum]

Ask the realtor that is making these claims to show her market data to support her claims. Is she/he pulling these numbers out of their hindquarters, or is there market evidence.

I saw your prior post, don't get hung up on what things "cost", the true value is what the market will pay for these features. Having the property on the market for almost one year most likely shows the home is over priced.

Hopefully your realtor knows the market, is looking out for your best interest and will advise you properly. Make an offer and see what happens, while the seller is taking their time facing reality, keep your eyes open for another property where the seller is serious about selling.

Good Luck...

 

[Thomas Fiehler]

TJ makes some good points. I don't know about the pool since around here above ground pools are personal property and not valued in residential appraisals. Just curious as to how much land is with the property. Some people think that a barn on 1 acre is as valuable as the same barn on 30 acres.

 

[Mike Kennedy]

http://appraisersforum.com/showthread.php?t=139158 - the amenities may be worth cost, above cost, or zero.

suggest, if you are TRULY "fixated" on purchasing THAT specific property - follow the advice on the First thread.

 

[Caligirl]

The seller's realtor

Not exactly the most unbiased source of information, is it? You are right to question the information.

 

[Ted Martin]

Unless you have a signed buyers agreement (or what ever it is called in your part of the world), everyone is working for the seller at this point.

As an appraiser, I pay very little attention to "cost to build" when I do an appraisal. Most lenders and appraiser's will consider the above ground swimming pool personal property and not real estate. If you look around on this forum for above ground pools you will find multiple posts about how to deal with this amenity, with most leaning toward zero, zip, no value, regardless of the integration into a deck system.

Pole barns (shops, shed, garages, etc), don't I wish it was as easy as applying a multiplier to the cost to construct when I was doing an appraisal. Most appraiser, lenders, underwriter require other sales with the same amenity or some type of analysis to prove what the market is willing to pay for this item.

 

[Smokey Bear]

The truth is, if the owner wants a certain price, he doesn't have to sell for less, no matter how irrational or unreasonable his demands are. You might want to let this one go. When the seller is being unreasonable at this stage, they only get worse if you get them to agree. The closing for this one could be a living hell if you managed to even get to contract.

 

[Dan/Fla]

I do not know the rules in Penn. However I have never met a realtor who would say anthing like "The seller's realtor has told us that the return on investment for the pole barn (including excavation costs, stonework, stalls, fencing & other items done especially for the owner's semi-truck & dump truck storage) should be 90%. (This home was purchased for $343K in '02) @ 90% return for the pole barn they are expecting $114,000. Is this realistic?

Their realtor has also stated that they should get a 50% rate of return for an above-ground pool, decking, gazebo & hot tub = to $15,000. Is this realistic?"

1st that is the seller realtor GET YOUR OWN.
2nd Most realtors though not appraiser have to follow certain Ethics and are not allowed to make up facts. If you do not get your own have the realtor show you the facts, where these number come from.
3rd Always when buying real estate make it “Subject to Appraisal” here again hire your own Bank and have them or you find your own appraiser.. Do Not let the Selling Realtor pick you appraiser and or Home Inspector… Yes get a Home Inspection – I feel I know what I am looking for in a Home and yes I hire one when bought mine.
4th The Pool No value above ground pools even in here in Florida get no value unless wrapped ¾ around by a deck, even then The value I give is most likely more to the deck.
5th the Value of decking, gazebo & hot tub it depends on size 50% of cost to build? Most likely not here again like the above ground pool Hot Tub if portable are personal property and though it does help the appeal for a sale most appraisers I know does not give much if any value, unless built in.
It is obvious from your comments you do not trust the sellers Realtor—Get you own, one you feel has your interest 1st

 

[Lobo Fan]

It looks like the selling agent has a copy of the "magic list" of adjustments appraisers apply to arrive at a value. A $100,000 pole barn sounds pretty expensive. It is worth what you are willing to pay. Be sure to get an appraisal clause in your contract and don't let the Realtor pick the appraiser.

 

[Jungle Boy]

The above answers are good.

One other thing to consider is, what do you want? What are these extra features worth to you?

Some people are willing to pay more (or less) than market value to get what they want. That's called investment value, or value-in-use.

The appraisal which the bank requests is for lending purposes. Don't rely on it to base your buying decision on. The appraisal will be based on market value, so be prepared to fork up extra cash if you want the extra features at a price higher than market value.