Appraising an outlier properties

[Zoe]

Better to have the worst house in the best neighborhood than the best house in the worst neighborhood.

Principle of progression and regression.

 

[Zoe]

We have many homes that are worth five times what is typical because the wealthy don't buy and sell based on comparable sales and their estates are not appraised based on GSEs or lenders guidelines But a $300,000 home is not normally a wealthy persons home and it's just bigger or better than what's around it.

But the appraiser doesn't try to bring
it's value down to it's lower valued sales comparables. It can be worth $300,000 and the lender just has to decide if they want to make the loan.

** CAN YOU HAVE THE BIGGEST HIGHEST VALUE HOME ? Sure your just not getting a traditional loan and it's a portfolio loan or buyer pays the difference in cash. My ghetto shack is worth maybe $1.2 million but 1,000 feet North there is a 6,000 Sq.Ft Mansion worth $4 million and no there isn't any comparable for 5 miles away.

I am sure you do on that signature case in CA. I am almost certain view was what motivated that family to buy that house and I don't know the neighborhood from Adam.

I know they had money and I know they either paid cash for all those improvements or they had an appraisal done on it before the appraiser got crucified that appraised it next.

National news was showing picture of the family on new deck with view behind them.

 

[Zoe]

There is something motivating this person on this house in this neighborhood. You need to know what it is. All you have to do is ask potential buyer(s) if they realize they are buying most expensive house in subdivision. Ask is that what they want to do?

If that is what you want to do, why?

They have a reason on buying the house. They know it is way more expensive than typical or should know. You should let them know.

Look for highest sales in any nearby neighborhood and similar.

 

[Zoe]

https://quizlet.com/379025413/basic-appraisal-principles-chapter-14-flash-cards/

 

[Zoe]

If you adjust for functional obs then you need support for that adjustment - support beyond "someone on AF said..."

You might not go to another neighborhood for direct comps, but you could look in other areas for other over improvements that have sold, and extract a discount rate by comparing that sale price to the price of other homes in that area.

You could get rough estimate but talking with these buyers would be priceless.

You can talk to congress and not sweat.

I know you would talk to these buyers.

I take that back. You may have sweated a little before Congress. LOL

 

[App601]

There is something motivating this person on this house in this neighborhood. You need to know what it is. All you have to do is ask potential buyer(s) if they realize they are buying most expensive house in subdivision. Ask is that what they want to do?

If that is what you want to do, why?

They have a reason on buying the house. They know it is way more expensive than typical or should know. You should let them know.

Look for highest sales in any nearby neighborhood and similar.

The reason they want to buy the house is because it is an excellent short term rental business. But this does not mean I have to appraise it at that value WITH a residential appraisal report. I looked at the highest residential sale and it was $200000 . Why would a person pay $100000 above the highest priced sale, unless there is a reason for doing it ?

 

[Zoe]

The reason they want to buy the house is because it is an excellent short term rental business. But this does not mean I have to appraise it at that value WITH a residential appraisal report. I looked at the highest residential sale and it was $200000 . Why would a person pay $100000 above the highest priced sale, unless there is a reason for doing it ?

I am leading you down a road. Why does this buyer want to buy this property?

Stay with me.

Are you scared to talk to the buyer?

 

[App601]

You could get rough estimate but talking with these buyers would be priceless.

You can talk to congress and not sweat.

I know you would talk to these buyers.

I take that back. You may have sweated a little before Congress. LOL

Interviewing the buyers was done I am reluctant to make deep questions , because it may raise suspicions on their part. But a simple question What is the intended use. Answer Keep it as short term rentals. Conclusion Commercial appraisal required Thanks for being serious

 

[Zoe]

Have you thought about income stream?

That is reason I was putting pressure on you on getting good estimate on market rent. Market rent and contract rent are different. When doing MV opinion of Value you use market rent.

 

[Zoe]

Interviewing the buyers was done I am reluctant to make deep questions , because it may raise suspicions on their part. But a simple question What is the intended use. Answer Keep it as short term rentals. Conclusion Commercial appraisal required Thanks for being serious

I don't worry about suspicions thoughts on buyer. They know my mission. I want MV for their benefit.

I have broke many hearts and made many hearts happy on MV.