Can I do this appraisal?

[norapp]

I am Certified Residential and am allowed to appraise 1-4 family homes. In the area I live now 1-3 family homes are listed on the tax records as residential while 4 family homes are listed as commercial.
Can I appraise a 4-family property even if it's listed as commercial apartments on tax records?

 

[TerryRohrer]

Your license allows you to complete that assignment. Designations for taxation do not mean anything to you beyond the difference in taxation. For example, I would be aware of any and all consequences of comparing 3 unit sales to 4 units subjects and vice versa (never a good idea, but could be worse in your circumstance).

 

[Terrel L. Shields]

Why not? the Feds list 1-4 as 'residential' - Zoning classifications might be impacting who/what calls 4 plex "commercial". Here, as long as one unit is occupied by the owner of the property, insurance is cheaper.

 

[Zoe]

It doesn't really matter even comparing a duplex to a fourplex. Locally in Shelby County, it matters on the real estate millage rate you pay the County tax assessor. The tax rate is higher per assessed value on commercial rated property on tax records.

My point is if they are good competing rental properties for the subject, it doesn't matter between a duplex and a fourplex. The owner pays the real estate taxes and insurance and maintenance, etc.

Appraisers don't typically do direct capitalization on a duplex or 4 plex or tri plex.

 

[CGinMN]

In MN, 1-3 units are taxed as residential, and 4+ units are taxed as commercial. However, if you've never done a 4-unit appraisal, you should probably decline or gain some competency first.

 

[Mark K]

In MN, 1-3 units are taxed as residential, and 4+ units are taxed as commercial. However, if you've never done a 4-unit appraisal, you should probably decline or gain some competency first.

Personally, I think if you're competent to appraise a 3-unit you can probably do a 4 with little trouble.

As to the question from the OP, yes, you can. The assessor/treasurer designation means nothing in regards to valuation.

 

[norapp]

In MN, 1-3 units are taxed as residential, and 4+ units are taxed as commercial. However, if you've never done a 4-unit appraisal, you should probably decline or gain some competency first.

I have done many on Long Island where the tax records show 4 families as residential. Since I moved 10 years ago I have done many 2-3 family appraisals but have always turned down the 4 family jobs. Work is scarce so I thought I would ask.

 

[Zoe]

I have done many on Long Island where the tax records show 4 families as residential. Since I moved 10 years ago I have done many 2-3 family appraisals but have always turned down the 4 family jobs. Work is scarce so I thought I would ask.

Duplexes are taxed as commerical where I live on real property taxes.

Your not doing a proforma income/expense statement on the subject and doing direct capitalization on the income stream.

You are predominantly relying on the sales comparison approach and maybe cost approach.

Same motives for buyers and sellers indicated in sales comparison approach and cost approaches to market value. Makes no difference in 2 units, 3 units, 4 units in sales comparison approach to market value of the subject.

Forget income cap approach in a duplex or 4 plex.

Differences in value will be reflected in the 2, 3, 4 units in both sales comparison and/or cost approaches to value.

Am I getting through?

 

[Zoe]

If you can do a duplex. You can do a 4 plex.

 

[Elliott]

I could care less what an assessor designated a property. (The most famous comment after giving a report in an Econ course on taxation by the professor was, "Elliott, everyone knows assessors are just a 16th echelon cog in county government!" and he liked me.)

The market will tell you what units are selling for, which is what should be the primary focus. Value per unit, or room, or GRM, or SF, or bedroom of other 4-plexes is more reliable than some sketchy derived cap rate.