Any new construction review appraisers out there?

[Mark K]

.... applies adjustments based on their own personal knowledge of how they know the market responds, rather than blindly following the orders of their form driven masters....

Fixed it for you.

Keep appraising the way you're directed and you should be safe... unless FHA determines you're not.

 

[NC Appraising]

Not only is it in the definion of market value it is re-stated in the HUD handbook.

View attachment 77119

See above. Adjustments are made to market expectations, not the specific terms/conditions of the sale.

Here is a perfect example:
6524 Deermont Court, Charlotte, NC sold for 400,000 no SC. list price $399,000. DOM 2
6200 Pineburr Road, Charlotte, North Carolina 28211 sold $390,000 with $5k in SC list price 385k. DOM 1.

Exact home, similar updates, same floor plan, same subdivision with a similar sale date.

I called 6200 pineburr agent. The investor took the first offer and regretted it.

So did the $5,000 in SC affect the sale price? No. The seller was impatient and took the first offer.

 

[J Grant]

New home prices have more problems than just builder concessions

How about a 5% overnight price increase in a new phase, when the market did not increase overnight by 5%? Or ridiculous lot premiums that nobody pays for outside the first new sale, or line by line adding of "upgrade" cost items ( Often called change orders ) for inane things like extra insulation under the carpet etc..

 

[TerryRohrer]

Funny how differences of opinion on an issue have become prima facie evidence of actions based on personal bias alone. It's like those making the charge, most often when they have no concrete basis for their absolute position, miss the indisputable fact that theirs is an opinion based on personal their bias.

 

[CGinMN]

Basing your opinions on analysis of the market vs. always making dollar-for-dollar adjustments. What am I missing?

 

[TerryRohrer]

So dollar for dollar adjustments cannot be a possible conclusion from analyzing the market? Open-mindedness could be absent.

 

[J Grant]

So dollar for dollar adjustments cannot be a possible conclusion from analyzing the market? Open-mindedness could be absent.

IT can be, but needs to be explained as such, which is different than rote default dollar 4 dollar.

 

[CGinMN]

Absolutely it can. Never said it couldn't. The question is whether it came from analyzing the market or just doing it that way every time because you rationalize it can never be any other way.

 

[NC Appraising]

So dollar for dollar adjustments cannot be a possible conclusion from analyzing the market? Open-mindedness could be absent.

Yes they can.

I do both.

For example, say the home was on the market for 60 days and had two offers under the contract price. They finally accepted an offer with 10k above list price.

List price 300k, contract price 310k, with 10k in sc.

I'm deducting 10k.

 

[Carnivore]

New home prices have more problems than just builder concessions

How about a 5% overnight price increase in a new phase, when the market did not increase overnight by 5%? Or ridiculous lot premiums that nobody pays for outside the first new sale, or line by line adding of "upgrade" cost items ( Often called change orders ) for inane things like extra insulation under the carpet etc..

Your on to something about lot premiums. I only received one logical explanation for a Lot Premium(from on site agent)
. The Buyer of a new construction development wanted a certain lot(cul-de-sac. He was told he couldn't because that was a new phase and they were not quite ready to start. He insisted and they charged him 5K and they built the house.

What is a lot premium? A lot premium is an additional cost that the builder may charge if the lot you choose for your home is larger or more desirable in some way compared to other lots in the subdivision. It may have more privacy, water views, or a wooded area.Aug 26,

New Home Construction FAQ's - The Gove Group

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