Adobe constuction vs frame/stucco

[NMREALTOR]

I am a Realtor in the Albuquerque New Mexico area, and I am wondering that type of adjustment an appraiser would use when one house in frame and stucco, and the other house in all adobe.

 

[Mark to market]

It really depends on the subject and the comps.

 

[Jungle Boy]

I don't know anything about adobe construction.

However since no-one has replied to you, I'll give you a little insight on how an appraiser would/could approach this.

First of all, the appraiser would hope to have at least one recent sale ("comparable") available which would be of similar construction. If the appraiser found that this sale was an armslength transaction, and if the price seemed to be in line with what adobe houses sold for historically relative to your frame/stucco houses, he could use this sale as possibly Sale 1 (comp 1), and after adjusting for other features, it could be the comp that most weight is assigned to.
This may not be possible however, and the next best thing would be to have any sale of adobe construction. If this was possible, the appraiser would have to make a "time" (market conditions) adjustment in order to find today's indicated value.
The appraiser may also search for adobe construction houses which are actively listed for sale, and get an idea of what sellers and agents are expecting prices to be, after which he may adjust for market conditions and possibly SP/LP ratio. He may make an adjustment based on what sellers are asking for adobe verses what sellers are asking for frame/stucco.

But, I don't think that there would be any standard adjustment between the 2 types of construction. If your appraiser has made an adjustment, it may be market extracted or it could be his best estimate.

The appraiser may not even make an adjustment. He may just assign most weight to those sales which are most similar to the subject. There is no rule that an adjustment has to be made.

Hopefully this has helped.

 

[NMREALTOR]

Thank You

 

[Lobo Fan]

I am going to risk the wrath of other NM appraisers and give this a whirl. It depends. If your subject is a large custom, say in North Valley, then there should be other adobe comps. If you are dealing with new construction, compared to other new construction, adobe is not that large of an adjustment as modern frame and stucco walls have very good insulation values.

A Marshall & Swift cost approach comparison indicates about a 10% adjustment. The real way to do this is to find similar homes with the only real differences being the adobe versus frame and stucco. Any noted value differences could be attributed to the adobe construction.

Adobe has a down side as well. It does not take roof leaks well, and remodeling gets interesting. Plus exposed adobe makes electrical and plumbing interesting as well.

Usually, adobe is more of an aesthetic feature.

I am sure you have a seller screaming about an appraisal that did not adequately (in his mind) factor in the cost of adobe. Cost does not equal market value. It still comes down to what the market will pay for the feature.

Adobe could be compared to a swimming pool. They are both attractive, and extra work. Swimming pools add more to more expensive properties, and less to more modest properties.

Without knowing the details it is difficult to put a real number to it. I try to find other adobe comps (or other alternative construction such as straw bale or rammed earth) to compare with. Often out of state lenders are dubious about adobe construction. I had one underwriter describe an adobe house as a mud hut.

Generally speaking, it is not a huge adjustment.

Now that I am lightning rod, let's hear the wrath of my competitors.