Can You Use A Pre-sold As One Of The Comparables Of A New Construction Appraisal

[usground]

Can you use a pre-sold as one of the comparables of a new construction appraisal? The s/d is sold in a model home and in the MLS. The comp used in the appraisal was not listed in the MLS. Is this considered under the USPA definition of market value as being on the "open market"?

 

[Howard Klahr]

Has the transaction closed or is it a pending contract? If the transaction is for a model home, when does the buyer get to take occupancy of the property? Clearly that is a factor in the price. Also, how much was the buyer able to select the finishes for the home? If limited or not permitted as compared to what is available to other buyers, did that affect the price?

 

[usground]

Has the transaction closed or is it a pending contract? If the transaction is for a model home, when does the buyer get to take occupancy of the property? Clearly that is a factor in the price. Also, how much was the buyer able to select the finishes for the home? If limited or not permitted as compared to what is available to other buyers, did that affect the price?

It is a closed property. I am assuming the appraiser review the settlement statement from the builder. It is not the model home. There is a model home in the s/d that acts as a sales office. I just mention that to see if falls into the "open market" description for definition purposes.

 

[Howard Klahr]

see if falls into the "open market" description for definition purposes.

Yes, direct builder sales are considered to have been sold in the open market

 

[usground]

thanks!

 

[residentialguy]

You just can use a sale where the land and construction are separate. e.g. a guy buys a lot for 100k and then hires a builder to build a house for $300k...you can't add the two up and use it as a $400k comp.

 

[glenn walker]

If the market is strong a builder has no need for MLS so I say yes if it's closed sale.

 

[Tom D]

don't just review, keep a copy of the HUD 1 for that comp. i also find the builder's sales people to always be helpful. a good question to ask is, what upgrades/extras included in that price? sometimes builders included something free in those 1st sales.