Appraising an outlier properties

[ZZGAMAZZ]

As I said before there's always a reason why the high price can be an "outlier". There is an explanation and he found it. Good for him.

I don't think I can express this question succinctly; however: If quantitative analysis theory recommends excluding outliers from a market analysis, can the value of the subject , which is an outlier [price-wise], of an appraisal assignment be accurately opined, by the sales comparison market data approach? [The concept of superadequacy probably comes into play regarding physical factors that distinguish the subject from its surroundings, although that woud tend to discredit variances, alhough I don't understand why the concept is just accepted carte blanche without being demonsrated in each assignment in which it is experienced. Anywho I don't expect any responses because my question is so off-the-wall, although an alternative source as rich as the AF sure AF doesn't exist!!!!!

 

[Surf Cat]

The situation in this thread has gone so far off the rails it's ridiculous.

 

[App601]

The situation in this thread has gone so far off the rails it's ridiculous.

You are right my friend It should had been closed when I wrote that Its H&B use was not residential

 

[glenn walker]

The situation in this thread has gone so far off the rails it's ridiculous.

And you wonder why the GSEs are going to waivers and new valuation product's hell if this is what their dealing with it's all but over.

 

[J Grant]

And you wonder why the GSEs are going to waivers and new valuation product's hell if this is what their dealing with it's all but over.

This kind of property would fail the WAIVER test. WAIVERS ( and "new" valuation products- what are they exactly?) can not handle complex or atypical properties.
Some of the questions here are from appraisers who , may not be the most experienced, the rest are doing fine we don't see the vast majority handling the problems well. At times, even an experienced appraiser runs into a problem or just want another perspective. Newbies and everyone else can learn from the threads.

 

[Zoe]

For evaluating the business you do not need comparable sales or rents
All you need is an Income and Expense Summary and a Balance Sheet

If you are doing direct capitalization rate on income stream, you are spot on.

 

[Zoe]

In this assignment with all due respect, your best bet would be use a gross rent multiplier on some sales.

If it was easy, everybody would be doing it.

Direct capitalization is only other option if you were working for me and value definition was market value.

 

[Zoe]

I am appraising a property being sold for $300000 The neighborhood, or development in which it is located has a median value of $150000 with one sale at $200000. This is the highest priced comparable sale. After I apply the standard adjustments for site, GLA etc lets say it yields $250000 a value I believe is high for the neighborhood. Do you have any suggestions about what percent adjustment I should deduct for a functional obsolescence ? 10% ? 20% ?
I searched sales for the past 5 to 6 years and typical values have remained relatively stable under $175000
So maybe its possible maximum value should not exceed $220000 or 10% above the highest sale in the neighborhood.
Is there anything written on how to deal with these kinds of properties
I will not go to another neighborhood as I have 3 or 4 comparable sales from the same neighborhood,

I would appreciate your comments

You are on a dang ilsand. Do you just visit beach?

 

[Zoe]

Don't worry about using single family residential detached on gross rent multiplier in sales comparison approach.

Your designation tells me you can do it.

 

[Mark K]

You know what i will adjust for the pool? "0 "

Do you 1) have support that the pool will add 0 or 2) are you simply assuming 0 because none of the comps have pools? If 2, then you need to revisit basic appraisal theory.

Essentially, the over-improvement doesn't add to the property's value because it's not in line with the market expectations or the surrounding properties.

Again, is this an assumption due to lack of similar sales or do you have support? I seriously doubt that the extra SF has no value. There is always a home in the neighborhood that has more SF than the others. Claiming or assuming that the extra SF has no value amounts to incompetence.

I probably missed a lot of the replies because of a wonderful feature on this forum called "ignore". But any SFR can be appraised as a STR. I'm sure its handy if someone wants an inflated value. If you're appraising the on-going business concern then you're appraising a business, not real estate. Fee simple value wants the value of the real estate. STR agreements do not encumber or affect the fee simple.

BTW, since you mentioned it, F brain-dead Biden and F Harris, Harris the election LOSER.