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Adjusting the Unusual

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Gary Bartels

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New York
The subject of my assignment (market value for estate purposes) was owned by a man with ALS. House was altered to accomodate his illness and an elevator was installed. Since there are no obvious comps, how would y'all adjust for this feature?

Thanks.

Gary (perplexed) Bartels
 

Metamorphic

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Maybe there's no other recent elevators, but maybe there's a old sale with an elevator (perhaps even the subject) that you could pair with other historic data to get an adjustment percentage. Failing that you could look for recent or historical sales with other extensive handicap modifications to get a read on how the market values those amenities.
 

Obsolescent

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Minnesota
Go as far back (or as far out) as you have to to find other handicap modified homes and develop a percentage adjustment for those features.
 

CURT VAN HOOSER

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Contact some local Realtors. They may be able to lead you in the right direction.
 

Michigan CG

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WOW, I have no advice but would love to read your conclusions once you sort it out for my own learning.
 

Mike Garrett RAA

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Colorado
If you can't prove it...don't adjust for it. Just say you have no basis for an adjustment based on paired sales analysis.
 
Joined
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What Mike said . . .

There was a recent thread that discussed this issue -- adjusting for elevators when comps are scarce. Maybe 3 or 4 months ago?

I did a report for a home with an elevator, installed for a wheelchair bound homeowner. I didn't give any value for the elevator, for several reasons. To me, it seemed like more of a curiosity than an asset; plus, the home was dated, and as likely to be a scrape off as a major remodel.

The key question -- how will the market react to an elevator? If the sub area has a significant number of homebuyers that would value an elevator, it might warrant an adjustment; if not, it might even be a negative.
 

Metamorphic

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If you can't prove it...don't adjust for it. Just say you have no basis for an adjustment based on paired sales analysis.

I get what you're saying about that, and I've heard it before in classes and what not, but it never felt right to me. Common sense says that an elevator would generate an immensely positive market reaction from any mobility limited person; certainly not as great as the cost of the feature which is why you dont see more of them. But you can bet your sweet bippy, that a person with a bad hip or in a wheel chair is going to gravitate to a house and with an elevator and open their wallet wider than they would for a house without an elevator. Even if you're not mobility limited, its hard to see how an elevator would be a negative; maybe there's some maintenance, but that's probably proportionate to use so its a not likely a major factor

So, if one of our primary goals is to not be misleading, and you believe there's a difference even though you cant prove it, shouldn't we be making an adjustment, some adjustment, even if we cant prove the magnitude of it?

I mean at the very least you could say "There's no direct market support for an elevator...yada, yada, yada. But since the elevator obviously has value, it was adjusted based on typical Installation-cost/market-value rates for other high value unusual amenities like pools, excessive garage/shop space, etc, etc.

Just seems like doing nothing is more misleading than doing something with minimal basis.
 

Gary Bartels

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Joined
Apr 30, 2004
Professional Status
Licensed Appraiser
State
New York
Well thank you all. I knew I'd get some interesting perspectives on this. Interestingly enough, I was speaking with a neighbor (not disabled) recently who is planning an alteration to their home and adding an elevator for the future when steps could become an issue. Maybe I'll call it the baby- boomer adjustment.

Gary
 

Rufus

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Apr 3, 2008
Professional Status
Licensed Appraiser
State
Indiana
So, if one of our primary goals is to not be misleading, and you believe there's a difference even though you cant prove it, shouldn't we be making an adjustment, some adjustment, even if we cant prove the magnitude of it?

Support for what Metamorphic just said from FNMA in Section 406.3 in part B.

Occasionally, there may be no similar or truly comparable sales for a particular property--because of the uniqueness of the property or other conditions. In such cases, the appraiser must use his or her knowledge and judgment to select comparable sales that represent the best indicators of value for the subject property and to make adjustments to reflect the actions of typical purchasers in that market.
 
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