Adjusting for "curb appeal"

[Tim Schneider]

Have you made an adjustment based on curb appeal? For example, the home is built with similar quailty and construction techniques, but it is just really boring on the outside. Plain rectangle, no exterior accents, etc. I think such a property would bring less $, but where/how would you adjust for it?

 

[PropertyEconomics]

Have you made an adjustment based on curb appeal? For example, the home is built with similar quailty and construction techniques, but it is just really boring on the outside. Plain rectangle, no exterior accents, etc. I think such a property would bring less $, but where/how would you adjust for it?

How about finding sales of similar "boring" properties and measureing FROM THE MARKET if they sell for less?

Be prepared to have a very upset homeowner and lender should you decide to pursue your "gutt" instincts on this with no market support. Oh, and your state board may be upset as well with no proof as to an adjustment.

Just a word to the wise.

 

[Dennis J. Black ASA IFAS]

Stop watching HGTV, it is turning your brain to mush.

 

[Sid Pachter]

All adjustments come from the market, like to see your paired sales analysis on this one.

 

[CertifiedRes]

I think you are actually referring to architectural appeal. Yes, this should be adjusted for by demonstrating market preferences for certain styles of architecture or for the level of architectural integrity. This is especially true in the higher end markets. You will need to demonstrate the market's preferences for certain styles or strong architectural integrity through paired sales.

 

[Mike Boyd]

If you had no other options for comps and they were much more attractive then it might be easier to derive a QUALITY adjustment. Either way, it will be difficult to determine but if you do not, it would jeopardize the credibility of your report. This illustrates the importance of comp selection.

 

[Tim Schneider]

I agree with all that has been said. Thanks for setting me straight. However, we all know that measurable or not, the HGTV things do matter and do impact the sale of a property.

 

[Pat Butler]

Sometimes that lack of curb appeal comes from a simpler elevation of the house. Around here, most builders have a wide variety of elevation choices where the more expensive options are also more expensive to build- more dormers, in and outs, bay windows, overhangs, etc. The less costly elevations result in a rectangular looking house without a lot of interest.

So, I find that in developing subdivisions that there usually is a needed adjustment for the more substantial upgraded elevations versus the simpler ones. Once the subdivision gets built out and resales start to occur then those differences are less apparent.

 

[c w d]

"Curb appeal" is an issue of marketability, not valuation necessarily. "Curb appeal" would encompass design, style, condition, quality of construction among other things. We break up such generalizing commentary into it's constituent components such as for price/sqft. For instance, a realtor was flustered with me because the sales in a neighborhood averaged $120/sqft. She couldn't understand why I only adjusted GLA at $35/sqft. The fact is that $120/sqft encompasses everything about the house, each of the constituent parts that we try and observe a market reaction to and adjust for them individually.

I would not adjust for "curb appeal" if I were you unless you could quantify it as something you haven't already accounted for in the characteristics mentioned above. Or you could be double dipping.

 

[Doug Wegener]

Curb appeal

Have you made an adjustment based on curb appeal? For example, the home is built with similar quailty and construction techniques, but it is just really boring on the outside. Plain rectangle, no exterior accents, etc. I think such a property would bring less $, but where/how would you adjust for it?

Yes, I have. When I was trained in the business (22 years ago) my mentor taught me that curb appeal adjustments are acceptable. And there is a design/appeal adjustment on the 1004 form.

However, over the years I've found that there are different ways to deal with the issue which are more acceptable to underwriters. Often times the curb appeal adjustment can be put in the quality of construction adjustment when there are elaborate porches or exterior fenestration etc.

Another way to do it is just mental. If your subject has good curb appeal, you can just go to the upper end of the range for that reason and mention it in your comments.

However, there are times when good curb appeal is just that and an adjustment should be made. Houses with deep set backs often sell higher than those closer to the street. Homes with raised frontage also tend to have superior curb appeal and sell higher. If you make it, be prepared to support it with market evidence.