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Comparing 2 story town houses to 3 story town houses???

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I would use the most recent, and most comparable sales. Just because your 3 sales are older, doesnt mean that they are not the best available sales.

In regards to a negative adjustment for the basement, if thats what the market is recognizing then an adjustment would be necessary.
 
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Jordan-

One aspect that I think is under-analyzed in the 2 vs. 3 story comparable analysis is this:
"Is the buyer pool the same/similar for the two different types of homes? "
With few exceptions (at least in my market), I find the answer is "While there is some over-lap, there are also some significant differences, and it does affect value".

The fact that one has to climb 3-flights of stairs to gain the full utility of the living area for one model vs. 2-flights of stairs for the other model will probably eliminate some portion of the potential buyer pool from considering the 3-story climb. The question then becomes
"Is enough of the total buyer pool eliminated such that to sell competitively, the 3-story model needs to be offered at a discount?"

Think about it: If everything else is equal, would you prefer the 3-flights or 2-flights of stairs? And, there is some segment of the market that couldn't (for age or health reasons) choose the 3-flight option even at a significant discount.

If you find the 3-story models are selling at what appears to be a lower price than the 2-story models, I recommend addressing the "stair climb" issue in your analysis and your report; part of the value difference may be in this appeal/configuration aspect.

Good luck!
 
I would use ALL available comps; isolate the value difference (if any) between 2 and 3-story and render value with a healthy description of what your "number of stories analysis" reveals.

There's no reason (based on the information that you've provided) NOT to use all 6 comps, so long as they support the valuation process. It gives the lender and UW a cross-section and perhaps a more comprehensive reconciliation (i.e. in many, but not all cases).
 
2 from Column A, 2 from Column B

let the market tell you ....use 2 most recent, 2 story no bsmt, 2 most recent 3........double check the lowest level is truly above grade. .....manyyyy Listings indicate 3 level - some true some not........but, assuming most of the other characteristics are similar to subject. ......the comps will discern what the adjustment s/be.
 
Um, Denis, wouldn't there be one flight of stairs in a two story (between the two levels) and two in a three story? It wouldn't matter to me if it was one flight or two, but three would definitely be a negative in my book.
 
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Cindy Elam said:
Um, Denis, wouldn't there be one flight of stairs in a two story (between the two levels) and two in a three story?

Whoops! You are correct! :icon_redface:


It wouldn't matter to me if it was one flight or two, but three would definitley be a negative in my book.

It would matter to some- just not the athletic & active ones like you!!! :icon_smile:
 
Find out if there were any 2-story sales during the time period when the 3
3-story sales sold. This may give you an idea if an adjustment is necessary.
You should talk about the findings in the report if you feel inclined.

I sold a townhouse last year, and there was one couple in particular who didn't even consider it because it was 2 story. The lady was over-weight, and it pained me to see her climb those stairs. I'm surprised they even went to the second floor :shrug:
I personally think that there is more adjustment required between a 1 and 2 story residence, as there is between a 2 and 3 story. Especially if the 2-story model has a basement.
 
Have you considered Functional Obsolescense in the three story comps. In my area most three story houses are quite old and do not have baths on the third (and sometimes second) floors. Where are you located?
 
Is the "basement" in the 2 story a walk out type that is perhaps used as living area? If so, for functional purposes, it would be the same as a 3 story with no basement, right?

Also, do the older sales still represent the same market values as today? You may have to do a date of sale adjustment if it can be supported.
 
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