Condo Fee----adjustment

[jcoffey]

Fees for the subject are $1000.00/month and fees for the comparables range from $600.00 to $690/month. How do I make adjustments for the difference in the fees?

 

[c w d]

Fees for the subject are $1000.00/month and fees for the comparables range from $600.00 to $690/month. How do I make adjustments for the difference in the fees?

Is there a reason for the higher fees? I.E. Additional amenities? If not, paired data analysis should bare out the difference. Compare the subject to those that sold with coa fees of 600 - 690. If it doesn't demonstrate any significant adjustment then perhaps there isn't a reaction to it. I would also look at average DOM for both types of condos and possibly explain the high fee's impact on marketability.

 

[Don Clark]

Is there a reason for the higher fees? I.E. Additional amenities? If not, paired data analysis should bare out the difference. Compare the subject to those that sold with coa fees of 600 - 690. If it doesn't demonstrate any significant adjustment then perhaps there isn't a reaction to it. I would also look at average DOM for both types of condos and possibly explain the high fee's impact on marketability.

Good advice. I would not adjust for fees. But, I might adjust for any amenities that go with the fees. Sometimes those amenties are not apparent. For example, some condo association fees in my market cover everything except telephone service. And, i mean everything including cable TV, internet, and all utilities. Some barely have anything to offer except common areas such as signage, open spaces. So, find out what the fee covers and adjust for that is there is a need, not for the fee itself.

 

[Mike Garrett RAA]

I concur....find the reason for the difference and adjust that...if necessary.

 

[Lost Cause]

I can say that the vast majority of condo appraisals I have reviewed did not adjust for differences in maintenance fees.

 

[realbiz]

Fees for the subject are $1000.00/month and fees for the comparables range from $600.00 to $690/month. How do I make adjustments for the difference in the fees?

In my market I do not see adjustments for the difference in HOA fees. Adjustments are usually made for the difference in amenities. With a range like this I usually see quite more amenties in the higher HOA fees. I have also seen where the market shows the difference in values if there is no difference in amenities. For example, if all is the same and one complex just pays higher fees, these units usually sell for a lower value than the units with lower fees. The best comps are always those within the complex, therefore you don't have to make those adjustments. But, I am speaking of my market only.

 

[incognito]

See this thread, it should be helpful:
http://appraisersforum.com/showthread.php?t=138446&highlight=adjustment

 

[jcoffey]

Thanks to all.

 

[RSW]

You could also consider making a location adjustment. But I think the amenities adjustment is the way to go.

 

[Walter Kirk]

The large difference in fees may indicate a problem with the complex. Several years ago a converted rental building in Cherry Hill, N.J. was forced to drasticly increase it's fees because the building needed repairs and the condo converter had set the fees unrealistically low when selling the units.

Check the history of the fees in the subject and in comparables, talk to the condo board members.