Anyone care to educate me on developing the As-Is value mid new construction?

[George Hatch]

Problem identification is going to be a significant issue in this type of assignment. Understanding what you're seeing WRT what has already been completed vs incomplete. That's where having a table like this might come in handy:

Completion by COST

 

[TerryRohrer]

Again, much of it is a stab in the dark and the appraiser should explain their decision to discount or not discount and why.

Much like using depreciation tables to establish market value of special use improvements without any sale data, eh?

 

[Overimprovement]

I've never run into that situation. 10 years ago I did a per-construction appraisal. The guy was in deep but tried to build a larger home than the approved plans and specs but ran out of cash and let the bank have it back. The lender then contracted someone to look it over and that's when they found out it was not being built to spec but was built about 400 SF larger. It was framed, decked, roofed. The new builder made some proposed changes to the layout and moved some walls. In the end, the builder bought the house for what the bank had in it and moved into the house himself. It was only a block from where his wife taught school. So, what "discount" applied? The guy got paid for his labor and ultimately paid the bank what they were owed...which was the draws from the first builder. What discounts were there? Both bank and builder were happy and all it cost the bank was me going back weekly and telling them what had been done that week. Took the guy 6 weeks if I recall correctly to finish.

So you are saying the market is builders who want to move into a home themselves? This is a one-off example in my opinion, and I would not want to apply that to all such situations. The MUCH more likely buyer is a finish-construction-and-sell-for-a-profit builder.