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Co-op comps for Condo?

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AASNJ

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Jan 17, 2008
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Certified Residential Appraiser
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New Jersey
I have a condo purchase assignment located on a barrier island along the Jersey Shore. The subject is an older duplex style dwelling with another building in the rear with 2 units that has been converted into a total of 4 separate condo units. This is not uncommon for the island but most of the time they tear down the older dwellings to build bigger side by side style townhouse condos. The townships have allowed this now as of 5 or so years. There is not a whole lot of the older converted dwellings along the island (1/4 mile wide and 18 miles long) but do to the width they usually don't mind me expanding beyond the 1 mile standard distance parameter for comparables.

Here's the question: I have a few condo comparables within 5-7 miles but no where near as similar as the 2 co-ops that just recently sold on the next block over. Near identical in utility, parking, GLA, complex size and maintenance fees not to mention the same distance to the beach(ocean) which makes a big deal in this market.

There are very few co-ops on the island and I really don't run into co-ops on the MLS to often but given all the similarities and they also bracket the sale price of my condo subject very well. I know the difference between fee simple and co-op rights but they seem to good not to include in the report with all the similarities as opposed to the condo comps with more adjustments.

Your Thoughts? Thanks in advance for all replies!
 

Lost Cause

Senior Member
Joined
Sep 17, 2004
Professional Status
Certified General Appraiser
State
New York
Assuming you are reporting your appraisal on a form, don't grid out the coop sales. You might want to include the information in your comments and note what kind of additional support you feel they provide for your conclusion. Using coops as comps for a condo unit will be an immediate red flag and you can expect phone calls questioning this before your client even finishes reading the rest of the report.
 

Mztk1

Senior Member
Joined
Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
I wouldn't do it. Two different animals in my book. It has been a long time since I've done a co-op, but I remember same units with a different number of shares, being sold differently based on the number shares more "times" the value of the shares, compared to otherwise model match units. As like a condo, it is more than just an interest in the unit you reside, but unlike a condo, the amount of your interest can have varies depending on how many shares you hold. As far as I remember if I have 100 shares, I can sell all of them or some fraction, representing say my parking space, ownership in the club. But like I said, it has been a long time. Edison, NJ has a couple of co-ops that I used to do...but that was years ago.
 

MBD

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Joined
Jan 10, 2005
Professional Status
Certified General Appraiser
State
New York
I have compared co-ops to condos when no other data was available. You need to do a paired-sales analysis to determine the market perception of cooperative vs. fee simple interest.
 

Mike Kennedy

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Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
apples to pears. Don't.
 

MBD

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Joined
Jan 10, 2005
Professional Status
Certified General Appraiser
State
New York
In you're market, are the co-ops and condos seen as competing alternatives? Given similar units (date of transfer, size, room count, etc..), what is the difference in sale prices?
 

KenRossman

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Oct 20, 2004
Professional Status
Certified General Appraiser
State
Florida
If the co-operative units were more similar in physical attributes, etc. than available condominium sales, I would use them (probly as #4 & #5).

I would be very careful to fully describe my thought process for using them.

I would also be sure to fully describe any impact upon value attributable to the differing forms of ownership, particularly if the co-operative units had an underlying mortgage.
 

Lee in L.A.

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
I've got one on my plate now. A 600 SF 1 bedroom coop unit in a 32 unit coop project in scenic Sun Valley.

Sun Valley. Best known for landfills, industrial uses, quarries, auto wrecking yards. Also smaller older houses and some apartments, a few condos and as it turns out one short cul de sac of coop bldgs. Not what you would call high end, or even middle class. :shrug:

Sales are almost nonexistent. 7 sales in last 5 years. Last sale about 18 months ago at $150,000. That's it. Most of the few MLS listings say no financing must pay cash, a couple say financing available. I'm thinking if you have that much cash, why in he!! would you buy this decidely non palatial estate in shakeytown? :drinking:

Mostly just venting about this PITA, but if you've done one similar, and thoughts would be appreciated. :leeann:


Condo comparison is definitely apples and pears, but at least they both grow on trees. m2:
 

Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
apples to pears. Don't.


I agree with you and the others. Way different animal.

One example of how different they are is that debt service directly effects the value of the CO-OP. Debt Service is not a factor in Condo's.


cooperative ownership
A form of ownership in which each owner of stock in a cooperative apartment building or housing corporation receives a proprietary lease on a specific apartment and is obligated to pay a monthly maintenance charge that represents the proportionate share of operating expenses and debt service on the underlying mortgage, which is paid by the corporation. This proportionate share is based on the proportion of the total stock owned.


condominium ownership
A form of fee ownership of separate units or portions of multiunit buildings that provides for formal filing and recording of a divided interest in real property.
 
Last edited:

Kevin Mc

Elite Member
Joined
Jun 7, 2004
Professional Status
Certified Residential Appraiser
State
New York
No ,No and No

if the Cooperative complex has no Underlying mortgage grid them as #4-5 for additional support. Two different types of ownership (fee simple versus cooperative interest) different is every aspect other than perhaps physical. The report may be ugly with distance comps etc... but it will be right. As someone stated Apples to Pears. No can do.
 
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