Developer Sales

[masmia]

If the developers sales are not representative of current market are we required to use them? For instance I've been doing some new construction condos that have recent closings of units that were sold three years ago. There are other projects that are condo conversions in which the sales are above the market becasue of high sellers concessions and realtors commisions. Given the current market conditions I have been using all outside resales.

 

[Marc Lamb]

Jim, first of all these are small 1/1 units less than 600 SF from a conversion. This is in a riverfront complex but these units per the report, and per examination of developer brochures, and recorded condo docs are in buildings with some units have a legit river views but these units do not. The appraiser went over to the beaches and used a direct ocean for the sale outside. The sales in the complex cannot be supported by sales in any other complex (i.e. 1/1's or even the 2/2's when considering S/F) in the immediate area not to mention the whole County. Our office has reviewed reports before in this complex and no sales outside the complex were utilized and the reviews disagreed with the values and stated the reasons in great detail and had a lower value, but they closed at the original contract price anyway. Again everything is a little cozy and it seems that all the out of state buyers (about 60-70%) are grouped in regions and seem to have closings within a close proximity of time. For instance there have 4 closings with different buyers all from Brooklyn NY since January 1. Plus I have found comparables in the immediate area that support a much lower value than what is in the report. Then to top it off the appraiser is from another county and purposely fudged (either on purpose or geographic incompetence) the location of the out of project sale to make it appear closer in proximity than it really is.

Pam I will call you tomorrow (the 7th). I got busy and just got done working and just now checked the thread.