Condo Comps For A Townhouse

[challenger]

I got a desk review yesterday on a condo form. However it is a townhouse inside of a PUD project where all the other phases are condo's. He used condo's for comps. This is a second home market along the beaches. If you did not know the typical buyer would assume that they are condos to. Site size is basically the floor plan. I can see the logic but I have never seen this done comparing condo's to townhouses. Can there be any rational reason to use a condo vs a townhouse as a comp. Whether the typical buyer would know the difference is in material in my opinion. It is what is. Realtors have in mixed the descriptions or the legal definition in MLS listings. So they are confused about the differences which doesn't surprise me. I had to sort thru to find which were townhouses. There are other townhouses in the market but not typically mixed into a condo project like this one. I don't see how you can make the case for using condo's for comps.

 

[Deleted member 128537]

Sure. Lack of comparable sales and marketability is the same. Also it is better to use a townhouse in the same complex if the amenities etc are the same than to go outside the complex. When I do "site condos" I use regular single family homes since the market views them the same in my area.

By the way you can show this if you look at the history of sales in the complex. If they go for the same price per sf, it's probably a good indication they are comparable.

 

[hastalavista]

You can compare condos to PUDs all day long under certain circumstances.
What I don't think you can do (if required to be consistent with Fannie requirements) is to report a PUD (the subject) on a condo form.

 

[Deleted member 134708]

You sure it's not a site condo?

 

[timd354]

I got a desk review yesterday on a condo form. However it is a townhouse inside of a PUD project where all the other phases are condo's. He used condo's for comps. This is a second home market along the beaches. If you did not know the typical buyer would assume that they are condos to. Site size is basically the floor plan. I can see the logic but I have never seen this done comparing condo's to townhouses. Can there be any rational reason to use a condo vs a townhouse as a comp. Whether the typical buyer would know the difference is in material in my opinion. It is what is. Realtors have in mixed the descriptions or the legal definition in MLS listings. So they are confused about the differences which doesn't surprise me. I had to sort thru to find which were townhouses. There are other townhouses in the market but not typically mixed into a condo project like this one. I don't see how you can make the case for using condo's for comps.

Please note that "townhouses" is a property style and "condo" is a type of ownership. Just because a property is a townhouse does not mean that it cannot be a condo. Condos can consist of townhomes, high rises, garden style buildings, semi-detached or detached homes, manufactured homes, or even lots or boat docks. Additionally, condos can be part of a PUD or even a master condo regime (I once appraised a unit in a project where each of 8 individual mid-rise building was a separate condominium within a larger condominium that consisted of a land condominium that consisted of 8 sites (one for each separate building and a common area with a pool) that was also within a master HOA (it was a condo within a condo within a HOA). Thus, I would highly recommend researching the subject's title/deed records before I concluded that the subject property is not a condo unit.

 

[Ahhhh Yeahhhh]

With enough explanation, you can use a gas station as a comp for a doublewide.

 

[CindyR]

The typical buyer in my neighborhood has no idea that there is a difference between a townhouse and a Condo. Even if you try to explain it to them their eyes glaze over and they still have no idea what the heck the difference is and surely don't think it has any impact on them. We even have lots of townhouse (PUD) projects around here that are called condos. And when i say called condos i mean there is a sign on the front of the entrance that says Happy Sum Condos and the HOA name is is Happy Sun Condo Association and they still are only townhouses because they do not reflect condominium ownership in their legal docs. in summary there is often no market difference whatsoever and it is perfectly fine to mix condo and townhouse comps together in the same appraisal when appropriate.

 

[JTip]

Please note that "townhouses" is a property style and "condo" is a type of ownership.

Worth repeating several times......

 

[timd354]

With enough explanation, you can use a gas station as a comp for a doublewide.

No, actually you cannot without being misleading.

I don't care how much explanation an appraisal report has but including a gas as a comp for a doublewide residential property would be inherently misleading since the market and value of gas stations has absolutely nothing whatsoever to do with with the market and value of a residential property and by including the gas station comp, the report would certainly imply that the market/value for gas stations is some how related to or indicative of the market/value for residential doublewides

 

[timd354]

And when i say called condos i mean there is a sign on the front of the entrance that says Happy Sum Condos and the HOA name is is Happy Sun Condo Association and they still are only townhouses because they do not reflect condominium ownership in their legal docs. in summary there is often no market difference whatsoever and it is perfectly fine to mix condo and townhouse comps together in the same appraisal when appropriate.

Why would an Association be called the Happy Sun Condo Association if the property is not actually a condominium? In such cases, are you really sure that there is not condominium ownership within a master PUD? I would do pretty darn extensive research into the title/deed of a property in which the HOA name included the word "Condo" or Condominium" before I concluded that was actually not a condominium.