adjustments Condo vs. Townhome comp

[Mike Ciaccio]

Second guessing myself using fee simple townhomes as comps for townhome style condos.

My subject is a townhome style residence with Condominium ownership. Of course, I am using condo form. The market in Winter Park, FL does not seem to recognize a difference between condos and townhomes. If anything, the subject is more valuable being one of only four units in garden style/townhome project vs. lesser appeal of larger condo project. (With so few recent sales, how would I know market reaction anyway?) But, the subject has $300/month HOA. If comp is a townhome with no HOA does this require an adjustment? If the owner of fee simple has to maintain exterior, roof, grounds, insurance, etc. then do they approximately cancel out and therefore no adjustment is needed? Thanks!

 

[timd354]

Second guessing myself using fee simple townhomes as comps for townhome style condos.

My subject is a townhome style residence with Condominium ownership. Of course, I am using condo form. The market in Winter Park, FL does not seem to recognize a difference between condos and townhomes. If anything, the subject is more valuable being one of only four units in garden style/townhome project vs. lesser appeal of larger condo project. (With so few recent sales, how would I know market reaction anyway?) But, the subject has $300/month HOA. If comp is a townhome with no HOA does this require an adjustment? If the owner of fee simple has to maintain exterior, roof, grounds, insurance, etc. then do they approximately cancel out and therefore no adjustment is needed? Thanks!

I would shy away from using a fee simple comparable sale for a condominium appraisal if at all possible.....the property rights/interests between these forms of ownership are very different and it is my experience that many prospective purchasers of fee simple properties simply will not consider buying a condominium unit, especially now when many condo projects are having budget problems due to monthly fees not being paid by more and more owners. IF you absolutely have to use the fee simple comp, then you need to make an adjustment for whatever the market reaction is between the two forms of ownership. If you cannot determine the current market reaction due to the lack of sales, I would suggest looking into estimating the market reaction by going back in time and determining a market reaction based as a % of value between the two types of properties and then applying that percentage to the current market.

 

[Mike Boyd]

Second guessing myself using fee simple townhomes as comps for townhome style condos.

My subject is a townhome style residence with Condominium ownership. Of course, I am using condo form. The market in Winter Park, FL does not seem to recognize a difference between condos and townhomes. If anything, the subject is more valuable being one of only four units in garden style/townhome project vs. lesser appeal of larger condo project. (With so few recent sales, how would I know market reaction anyway?) But, the subject has $300/month HOA. If comp is a townhome with no HOA does this require an adjustment? If the owner of fee simple has to maintain exterior, roof, grounds, insurance, etc. then do they approximately cancel out and therefore no adjustment is needed? Thanks!

I frequently use PUD units (attached townhomes)as a comparison with condos...if there are no condo comps that are truly comparable. I use that phrase---"the market does not recognize any value difference....etc." as an explanation. Your market data should demonstrate that the $300 per month HOA fee cancels out the common amenities. But, I use that statement, also. Have you been copying my appraisals? LOL

 

[stefan olafson]

Be very careful and disclose in a number of locations in your appraisal report. It's best not to mix different ownership types if at all possible..

I often have to use 1.5 and even 2 story homes in comparison to ranch style in small communities with a limited number of sales. I explain the market very thoroughly and explain, explain and then explain again.

 

[Lee Lansford]

Second guessing myself using fee simple townhomes as comps for townhome style condos.

My subject is a townhome style residence with Condominium ownership. Of course, I am using condo form. The market in Winter Park, FL does not seem to recognize a difference between condos and townhomes. If anything, the subject is more valuable being one of only four units in garden style/townhome project vs. lesser appeal of larger condo project. (With so few recent sales, how would I know market reaction anyway?) But, the subject has $300/month HOA. If comp is a townhome with no HOA does this require an adjustment? If the owner of fee simple has to maintain exterior, roof, grounds, insurance, etc. then do they approximately cancel out and therefore no adjustment is needed? Thanks!

You will have to research back in time, analyzing what are similar improvements but with some having condo ownership and others not, in order to learn whether or not an adjustment is warranted. Each and every neighborhood is different and there is no "one size fits all" answer to your question.

Keep in mind that if the market does not recognize a difference...well, you would then have your answer!

 

[Howard Klahr]

As Mike noted, if the homes are located within a Homeowner Association community, there is often very little difference if at all as both types of development frequently offer common amenities, etc. Just make sure that the amenities are compatible or this would be another feature requiring adjustments.

I know in the south Florida market area, for townhome style residences, HOAs and condominium project regularly compete directly for purchaesrs without any measurable differential in terms of price.

 

[CSP 49]

Where in Winter Park? If on the east side five projects come to mind for condos with townhouse design/style, Winter Park Villas, Wrenwood (off Tangerine), Hidden Oaks, Whisperwood and Ultra Vista (Maitland, Seminole County). These are all east side Winter Park and would all be relevant to 32792, not so much for 32789. I'm not a know it all, I just sent out a Winter Park Villas report today.:laugh:

I would tend to agree that the local market does not differentiate between forms of ownership for attached housing. Although $300 per month is probably higher than typical even if water and sewer are included.