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Condo Question

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444nutman

Thread Starter
Senior Member
Joined
Jun 20, 2007
Professional Status
Certified Residential Appraiser
State
Florida
I am appraising a purchase where the owner is buying the model and renting it back to the builder. The question I have is I have to check the tenant box. I talked to another appraiser and he said check the vacant box but that does not make sense. The builder is going to rent it out for a year. Am I correct on checking the tenant box?
 

ccooper

Junior Member
Joined
Mar 9, 2002
Professional Status
Certified General Appraiser
State
Missouri
An argument could be made that the unit was vacant on the date of appraisal therefore "vacant". If you have knowledge of the lease back then I think you should check "tenant" and disclose the lease back.
 

CCAAMO

Senior Member
Joined
Sep 17, 2007
Professional Status
Certified General Appraiser
State
California
If you know its going to be a rental, then you need to mark tenant. In the addendum you need to spell out exactly what you stated in your post so the reader understands it will not be occupied by the purchaser.
 

Tony V

Elite Member
Joined
Mar 29, 2005
Professional Status
Certified Residential Appraiser
State
New York
The apprasial is a SNAPSHOT in time. Was there a tenant or renting the unit at the time of the report?

if yes then tenant occupied.....
 

TJSum

Elite Member
Joined
Nov 12, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
Make sure the contract does not have any funny business in it (personal property). With model homes, there are times when some or all of the furnishings are included in the sales price. Just be sure to triple check the terms of sale. Is the rent "typical", if it is way above, this also could have impact on the sales price, etc.
 

444nutman

Thread Starter
Senior Member
Joined
Jun 20, 2007
Professional Status
Certified Residential Appraiser
State
Florida
This gets better. I talked to the owner and the rent is going to be whatever they pay in monthly mortgage. The furniture goes when the lease is up in a year. The lease is a year which the project should be complete by then. I will just mark tenant and explain the lease in the report. I am probaly going to have to do a rent survey but only 16 units have closed and only 16 are finished. They just got permits for the second phase and the project is going to have 3 phases.
 

TJSum

Elite Member
Joined
Nov 12, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
Make sure you get a clear copy of the contract, just to cover your hindquarters. As a personal note, how wise is this purchaser? Unless he is getting a great deal, if the market is declining why not just wait to purchase next year at what most likely will be much lower prices.
 

CCAAMO

Senior Member
Joined
Sep 17, 2007
Professional Status
Certified General Appraiser
State
California
This gets better. I talked to the owner and the rent is going to be whatever they pay in monthly mortgage. The furniture goes when the lease is up in a year. The lease is a year which the project should be complete by then. I will just mark tenant and explain the lease in the report. I am probaly going to have to do a rent survey but only 16 units have closed and only 16 are finished. They just got permits for the second phase and the project is going to have 3 phases.

Look at the bright side, you get some extra spending for money for christmas doing the rent survey. If there is a lack of rent comparables make sure you charge enough to cover extra time it will take you.
 

Chris Colston

Elite Member
Joined
Jul 24, 2003
Professional Status
Certified Residential Appraiser
State
Florida
But wait....is it really OCCUPIED? There is furniture for staging, no one really "lives" there, right? How do you mark other "staged" units or houses? Are there clothes in the closets? Is there food in the frig? This is the model, models are almost always "staged", but they are technically VACANT!

Yes, discuss the rent back, but for occupancy, the unit is VACANT.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
It's "Vacant". However, an addenda explaining exactly what's going on would be necessary to avoide a misleading report.
 
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