Any Suggestions

[EddieHibbard]

I am doing an appraisal on a ranch style property with 3000sf GLA and 2500sf basement near 38th & Arlington. When pulling comps I found nothing within 1 mile that is comparable to the subject GLA and when I go outside of 1 mile amenity/market appeal changes as you are getting into Devonshire, etc. I additionally searched dated sales to no avail. I found a previous listing of the subject and it expired at roughly $160K and sold bank owned after that for $60K. This is a nasty file. Any suggestions where I should go with this? This property is super improved for the area; however, explaining this to the tards(Underwriters) so they understand is going to be impossible either way. The property appears to conform with regards to zoning so HBU appears to be "as is".

Would you stay within the immediate market and use properties that are inferior with regards to GLA? We are talking 1000sf on average. The diminishing return on the GLA will be real f'n tough to calculate.

Or, would you go far away and try to adjust for location. Keep in mind that this is zoned D5, it is a med/high density area. It's nearly impossible to support location adjustments that are likely going to be >25% adjustment.

Any other suggestions would be appreciated. These seem to be the most obvious ways this could be done; however, I am open to suggestions.

Thanks ahead of time.

Ed

 

[Mike Kennedy]

Does the Market data indicate buyer dynamics change re style at 2500-3500sf? Suggest considering alternate styles in the local market which may indicate Utility, Location, Quality, Condition, Amenities, Schools etc. as the Leading Value drivers in that Segment versus Style.

 

[EddieHibbard]

It's interestubg that you would ask the buyer dynamics with regards to GLA in this area. There do not appear to be data with regards to GLA this high in this immediate market. Whenever I work on an assignment, I like to break things down to the lowest common denominators when searching for comparables. In this situation I have asked myself "whom is the buyer if this property? and What would buyer pay for a property in this location?"

I completed a search based on square footage with no limitations on style/amenity and within the relevant market area, there are just no properties of this size transferring at current. There are nearby properties with different amenity that have transferred in the prior 12 month period; however, these properties were discluded due to locational factors and different school systems.(IPS vs. Lawrence Community Schools - Very different schools)

I then searched tax records in the legal addition to hopefully shed some light on how much of an anomoly this property is or isn't and found that the subject is assessed for $100K more than any property within the legal with the exception of a commercial property on a busy street nearby. This property was easily 2000sf larger than anything in the legal so going dated doesn't appear to be the way to go either.

I am concerned with increasing the distance of the comparables as center township has been crushed by foreclosure in the prior 24 months and the adjacent township in Lawrence appears to be superior in many ways. It doesn't appear to be feasable to break down each factor that would effect the value of the subject. I have a hard time believing that the buyers purchasing in Lawrence Township would consider living in the subject location.

 

[Mark K]

You'll be making a big mistake by leaving the immediate area of 38th and Arlington.

I'd adjust the nearby comps for size differential and explain the best you can. If the "tards" don't understand it, too bad. You can go a mile from that location and be in a FAR superior neighborhood and trying to quantify the difference in areas will be much more difficult than adjusting size. I certainly would not leave the IPS school system for comps.

 

[Doug Meyer]

You'll be making a big mistake by leaving the immediate area of 38th and Arlington.

I'd adjust the nearby comps for size differential and explain the best you can. If the "tards" don't understand it, too bad. You can go a mile from that location and be in a FAR superior neighborhood and trying to quantify the difference in areas will be much more difficult than adjusting size. I certainly would not leave the IPS school system for comps.

Mark just pretty well stated what our phone conversation was earlier. Stay in the area and just explain away..That is about all one can do...Good luck

 

[EddieHibbard]

By the by, I did stay in the area. I mentioned a possible HBU issue as the property could be split into a duplex or 2 attached units. This was an ugly one, but I had a nice long conversation with Ratterman and finally finished this one off.

Thanks for you comments.

Ed