Black couple settle lawsuit as home value at $500k below real price

[TerryRohrer]

This exemplifies the weakness of the sales comparison approach as practiced by nearly all appraisers. IF you are lacking in good comps, subjective judgment becomes more important - and that is easily challenged - because it is not logically or mathematically constrained through the traditional URAR/AI approach. ---> This was a property almost cherry-picked for a lawsuit.

Their exterior house design was plain and simple, and the telephone poles IMO ugly. A seemingly (from photos) much nicer house sold at the end of 2121, when home prices were near their highest, for $1.3M.

Yes, we would all like to see the two appraisals - but that will not likely happen. I am sure however, neither could be logically justified beyond a reasonable doubt.

Nonetheless, keep in mind this location is actually nice - I like it. But it does seem to exist in a kind of shadow on the opposite side of busy Hwy 101 from central Sausalito - lacking the views and the local lifestyle, amenities and services of central Sausalito west of Hwy 101 and Marin City.

I couldn't come up with a decent value without an inspection. But if it were nice on the inside, I would guess it would be somewhere in between the two appraised values. Hard to say.

Also, the people involved on the defense side, IMO, lacked competence. But just as important, apparently, very large and well-funded entities were behind the plaintiffs and could have kept the battle going for a long time - and it appeared they were very determined to win the case in order to set a precedent. --- As I said, the current SCA approach used by appraisers lacks a good foundation and can always be challenged if decent comps are lacking.

If the appraisals had been carried out in a very logical and mathematical way, even a well-funded plaintiff would run up against some fairly formidable obstacles. Dropping adjustments into a sales grid without mathematical constraints, based on "experience" is an open invitation to problems.

You are pushing uphill, Bert! I was chastised the other day for daring to suggest that even simple math might have a place in appraisal work. Frankly, I'm still trying to comprehend how anyone who has ever made a dollar adjustment in an appraisal doesn't believe they stooped so low as to have committed "math."

 

[Fernando]

Thanks John for the bit of history of the uniqueness of Marin City. Those local appraisers would know such differences. I only went to Marin City to go to that local plaza few times in the past.
I go to Sausalito many times. I'll be having seafood dinner restaurant later this month with family in front of water bay/city views. Should be really nice.

 

[John Hassler]

Bert, there is much about the mathematical side you present that I appreciate. However, in certain areas, like quirky/quaint/non-conforming ones, qualifying all of the pertinent property details to pump into the math machine still requires a good deal of professional judgement.
Just look at the high and low Sausalito sales in my recent post. A 1354sf home on a 2,000sf lot for $1.426m, and a 3,355sf home on a 8,500sf lot for $7.5m. These two homes are about 1/3 mile apart and neither suffers external influence. Yet the variance in price is over $6m for 2,000sf of living area and 6,500sf of site.
Not every property has nice quantifiable attributes. Sometimes a property just has the “it” factor. Sometimes the buyer just wants what they want and price is a secondary constraint; see my post from 20 years ago regarding a condo at the north end of Sausalito https://appraisersforum.com/forums/threads/a-case-of-too-much-money.70239/

 

[ucbruin]

It's the ART of the Appraisal....

 

[Terrel L. Shields]

They were actually creosote treated "telephone" poles.

Power poles are generally larger but depends upon the size and height of the pole. Telephone poles here are much thinner except where combined with other services like cable. And properly placed poles never need cement. That's a bugugly way to build a house if you ask me.

This exemplifies the weakness of the sales comparison approach as practiced by nearly all appraisers. IF you are lacking in good comps, subjective judgment becomes more important - and that is easily challenged

The crust of the biscuit - No one wants your judgment or opinion. They want quants and irrefutable facts...facts that don't exist.

 

[John Hassler]

Thanks, that’s great info.

Do you see any relevant pole sales from period prior to the Miller appraisal, which was completed in Jan 2020?

Here are the MLS sales I could find in the "pole" home subdivision for the past ten years sorted by date. Obviously there are property criteria that would explain more of the disparity that are not shown here. Be that as it may, how many appraisers do you think have the capicity to make sense of this data? What do you think the chances are of an incompetent appraiser grossly overvaluing or undervaluing a"pole" home in this subdivision? What do you think the chances of two competent appraisers being within 10%/20%/30% of each other?

Street Full Address	Listing Price	Selling Price	Selling Date	GBA	$/SF
52 Buckelew St	1,395,000​	1,245,000​	3/29/2013​	3229​	386​
85 Park Cir	375,000​	550,000​	7/9/2013​	1248​	441​
53 Buckelew St	995,000​	1,055,000​	8/6/2013​	1952​	540​
25 Buckelew St	759,000​	742,000​	12/23/2014​	2272​	327​
50 Park Cir	695,000​	649,000​	12/26/2014​	1764​	368​
28 Buckelew St	450,000​	450,000​	8/20/2014​	1092​	412​
65 Buckelew St	729,000​	735,000​	8/19/2014​	1248​	589​
611 DRAKE Ave	599,000​	545,000​	3/11/2015​	1248​	437​
619 Drake Ave	539,750​	545,000​	6/19/2015​	1216​	448​
19 Park Cir	599,000​	555,000​	10/14/2015​	1248​	445​
619 Drake Ave	775,000​	740,000​	4/1/2016​	1216​	609​
34 Buckelew St	900,000​	875,000​	4/6/2016​	1536​	570​
78 Buckelew St	899,000​	915,000​	3/29/2016​	1520​	602​
21 Buckelew St	630,000​	525,000​	3/27/2017​	1216​	432​
15 Park Cir	549,000​	660,000​	8/16/2016​	1092​	604​
615 Drake Ave	699,900​	735,000​	10/3/2017​	1216​	604​
31 Park Cir	1,100,000​	1,100,000​	2/3/2018​	2053​	536​
86 Buckelew St	925,000​	1,235,000​	4/16/2018​	1357​	910​
52 Buckelew St	1,795,000​	1,795,000​	12/19/2018​	3360​	534​
50 Buckelew St	899,000​	899,000​	8/6/2019​	1216​	739​
28 Buckelew St	599,000​	650,000​	6/5/2019​	1092​	595​
635 Drake Ave	979,000​	968,888​	1/26/2021​	1092​	887​
21 Buckelew St	1,098,000​	1,100,000​	5/6/2021​	1590​	692​
34 Buckelew St	1,350,000​	1,320,000​	12/16/2021​	1536​	859​
23-25 Buckelew St	1,200,000​	1,250,000​	7/27/2022​	2272​	550​
81 Buckelew St	1,150,000​	1,300,000​	10/14/2022​	2302​	565​

(Edited to include additional sales)

 

[George Hatch]

The first appraisal was performed in 12/2020. At that time the then-most-recent sale on that list was not recent.

Not to mention the point that about half the homes in that neighborhood are the pole homes and the other half are of conventional construction with garages and such.

 

[Fernando]

We all come upon a neighborhood which is hard to appraise (maybe some of you don't).
I have one town in hilly terrain which I always found hard to appraise. Prices vary and different appraisers could come up with wide range of values I believe.
The area is mostly White but some homes downslopes, different curb appeal, views, narrow streets, so many factors and I get headache appraising there.
I can imagine the difficulty in appraising that Marin City home. Maybe the plaintiffs and all parties realized this and decided to settle.

 

[George Hatch]

It's going to be a tough neighborhood to appraise in no matter who goes there or when they go. Solely due to the low number of sales. If you rolled into a neighborhood that yielded 10 or 12 of these properties selling every year then that would be an easy analysis. But when they can go for 18 months without a single relevant sale then that's going to make for a difficult assignment. not because of the property and certainly not because of anything to do with the people, but due to the lack of data.

 

[John Hassler]

The first appraisal was performed in 12/2020. At that time the then-most-recent sale on that list was not recent.

Not to mention the point that about half the homes in that neighborhood are the pole homes and the other half are of conventional construction with garages and such.

As a practical matter there are no "conventional construction" detached homes in Marin City. There are, however, attached housing developments of conventional construction albeit of newer and superior base quality.