adjustments for pole barns/utility sheds

[andreawhited]

Hi, I'm having a problem w/underwriting... Subject property has a wood frame 4 stall pole barn, about 15-20 years old and a frame utility shed that almost appears to be falling apart, however, is at least on a concrete base. In your experience what kinds of adjustments do you give these structures? I gave too low of an adjustment, even according to the underwriter... Help! Thanks!

 

[Jerry Bone Jr]

Sometimes they'll add value. Sometimes they'll detract from value. Sometimes they'll have no impact on value. It's on a case by case basis.

 

[Mztk1]

What did you adjust?

Would seem weird an underwriter would say it is too low. Did you get that directly from the UW, or a surrogate.

I'm in Hillsborough County, a bit north of you, but I appraise farm country. For a four stall pole barn it could be $0 but that is unlikely, most times it is $5K. Could be 10K, 15K or $20K if it is good, very good or exceptional.

For a shed, falling down, on concrete, it is very often $0 but often up to $2,000. Exceptional might hit $5K.

Every market is different. You have to find a house with a pole barn out there and I'm sure you can. If not stalls will work. Can't imagine them not being there. Just get a comp with something similar and extract the value.

 

[Dwayne Drummond]

I see them all the time and give very little value to them. Unless your talking about an Ocala Thorobred type mansion. Construction cost in this area can be minimal, with depreciation, deferred maintenence.....nada....

 

[incognito]

I always try to find a comp or 2 with a similar pole barn or detached workshop. First, it saves you from having to make an adjustment, and second, it illustrates that such structures are common to the area. I doubt you will find a one size fits all answer to your question...

Try to find another comp with a similar detached structure. Even if it is old, or distant, and try to draw some conclusions from that.

 

[stefan olafson]

I'm in North Dakota, practice in MN and don't have a clue what the market is like in Florida or in your area of Florida.

This is why we are having problems with our credibility! Didn't you learn from your schooling or your mentor that you need market evidence to make adjustments in the sales grid? I could tell you $10,000 in MN for a pole shed but that doesn't give you any more of a realistic answer to your question than if you threw cow dung at a target with different amounts on the target!

Do it right, find some comparables with similar outbuildings. Support your adjustments with market derived data!

 

[David Beasley]

Sounds like you may have an underwriter that thinks an adjustment has to be above a certain percentage...some appraisers around here will not make an adjustment unless it is at least 2% of the sales price of the comp to which it is to be applied.

I don't necessarily blindly buy into that methodology, or it isn't applicable in every case anyway, and have to spell it out sometimes in the report. If you have support for your adjustment, tell the UW it is a supportable adjustment and move on. Otherwise, you may need to supply a comp with a similar set of outbuildings or find a sale that isn't really comparable but has a pole barn and run down shed and attempt to extract their value...

FYI, in our market, pole barns quite often have limited contributory value. Usually, they only really contribute if they are a genuinely useful amenity (horse farm, working ag farm, etc). Otherwise, depending on size, they are often equated by buyers to these cheap aluminum "car covers" that approximate detached carports. I think the double-car carport versions of those are selling brand new around here for $595 installed.

 

[J Grant]

an underwriter can think it's too low, but you don't of course have to agree or change a value even if they mention something like that, sounds like pressure to raise a sales price, you can report them if they don't cut it out.

 

[Terrel L. Shields]

Pole barns and other rural structures add value and suffer obsolescence based upon the utility and the number and kind of buildings in most rural settings. Too many barns and they start becoming "invisible". You simply have to ask yourself, "If this one barn was gone, would the asking price / selling price change?" Often the answer is no. But the largest barn or the newest barn might illicit the response "yes".

If you analyze a rural sale, try estimating the eff. age of the dwelling, rcn, and subtracting that and the land value "as if vacant" from the total sales price. Anything left over is allocated to the site improvements like barns. I recently did such an analysis on rural properties containing abandoned poultry barns which commonly are 16,000 SF each. Such overimproved properties suggested to me that such barns in average condition contribute less than 50¢ per SF, often only 15-25¢ per SF and anything over 2 such barns becomes "invisible". There is just so much such barn you can use to store round bales of hay (their most common utility). Small abandoned dairy parlors are also very functionally obsolete and contribute little. A good pole barn which can be used for storage or shop will do better.

 

[Mike Garrett RAA]

Out here in the Wild West, pole barns do usually add some value as do other out buildings. How much? Only way is to extract the adjustment from the market. Find sales with such amenities and some without. It all depends on YOUR MARKET...not mine.

I, typically, value a storage shed with concrete foundation from $500 to $2,500. A 4 stall pole barn, in average condition will add $2,500 to $5,000. Another consideration here is whether it has electric service and running water. Corrals and fencing also can add value. Ideally, use comps with similar amenities so that you don't have to make adjustments.