Design/appeal

[Margie Frierson]

If subject is two story, must you use other two stories if available when single story is closer in GLA and there appears to be no market difference?

 

[hastalavista]

Margie-

You answered the question from an appraisal standpoint (if there is no difference, then it doesn’t matter).

Unfortunately, in the Mortgage Lending World, most lenders/underwriters want to see a similar designed home.
If you can’t find one, I would put a COMMENT IN THE ADDENDUM THAT THE READER CAN’T MISS explaining that there is no difference, and therefore the lack of 2-story comp has no impact on the valuation.

 

[Otis Key]

Uh - What Denis said.













Also, you might want to just add that extra two story as a forth or fifth sale to avoid the calls. Five minutes now will save hours later.

 

[Ron Hauser]

Denis and Otis,

I beg to differ with you. A ranch design home is different than a 2 story or split level design and if possible I will never use a ranch against another design. Not to mention it costs more to build a ranch design home than a 2 story home.

Margie,

I would use other design homes, make my adjustments and leave the ranch out of it.

 

[hastalavista]

Ron-

No problem with the disagreement, but in Margie's post, she said there appears to be no difference in market perception and there were no 2-story homes available.

We all agree that throwing in a 2-story home is a good idea, but if it isn’t there, and there's no impact on the valuation, how meaningful is it (other than to comply with a likely UW request)?

 

[Otis Key]

Ron, like Denis, I have no problem with your statement. However, it also comes down to YOUR market's interpretation with the designs, styles, levels and etc. I just completed last week a Pueblo design (flat roof) that was one story. Two of the sales had a pitched roof. The UW wanted another "Adobe Pueblo" style. My subject was a frame/stucco pueblo style.

In some markets it really doesn't matter. In other markets, it is a major concern. From what I've found from my data, the typical prospective purchasers in my general market area don't really care if its between a two story and a one story, as long as the bedroom and bathroom count works out.

 

[Couch Potato]

Originally posted by Denis DeSaix@Sep 16 2005, 12:58 PM
Margie-

You answered the question from an appraisal standpoint (if there is no difference, then it doesn’t matter).

Unfortunately, in the Mortgage Lending World, most lenders/underwriters want to see a similar designed home.
If you can’t find one, I would put a COMMENT IN THE ADDENDUM THAT THE READER CAN’T MISS explaining that there is no difference, and therefore the lack of 2-story comp has no impact on the valuation.

Denis, there is no such thing as a comment the reader can't miss. When I was faced with a similar two story situation I was able to find one sale of a two story within a 5 mile radius, it was only .25 mi. from the subject on the other side of the little two lane highway that runs south out of Saint Cloud in a subdivision very similar to the subject. It had a pool like the subject and would have been an ideal comp except it was too big, about 30% larger than the subject. I included it in the report as one of the 5 sales used and gave a very detailed explanation including the fact that is was the ONLY two story sale available.

I then got a fax requesting an explanation of using a comp from across a major highway and why there were no other two story homes used. :blink: I added a couple of pictures of the "highway" and an additional addendum where I copied and pasted the original explanation under the heading "AS STATED IN THE ORIGINAL ADDENDUM" B)

I still had to then read the addendum to them on the phone when they called after receiving my response! :rofl: :rofl:

 

[Lobo Fan]

Hey Otis, I noticed that the Cabezon development one of the delveloeprs charges and additional $8K for pueblo style as an upgrade. To me, a flat roof is a leak waiting to happen and I don't get the appeal. Do you adjust for ranch versus pueblo style? Assuming both are frame stucco/similar quality, etc...

 

[Lee Lansford]

The market "speaks" the truth.

Listen to the market.

 

[Mike Boyd]

Who would not want ideal comps? It is often necessary to use different styles. In most subdivision there will be 3 or 4 different floor plans each with at least 2 different elevations. That would not address the one story vs 2 story but it certainly addresses style. I try to avoid using a 2 story comp for a 1 story subject because it may have different market appeal. There are older couples who don't want to climb stairs, There are young families who have toddlers that might have a proclivity to fall down the stairs. Lots may not be large enough for a rambling ranch but just fine for a 2 story or split level. You have to examine the market to see if there is any historical value difference between one and two story homes. In my market as well as Denis' there is no evidence of a difference although a rambling ranch may have a larger lot. Keep in mind COST is typically not a factor in market value if all other things such as quality and amenities are equal.