External obsoleteness No similar sales

[Ray Miller]

Have a subject property (duplex) that is contiguous to warehousing and storage lot area. I can find no comparables in the past 36 months of a similar nature.

Nor can I find any sales in the past five years that have the same external obsoleteness as the subject to extract a market reaction from.

I am noting in the report that this appears to be external obsoleteness, but can find no sales to extract a market reaction to make an adjustment.

I have searched the entire county and rural towns.

How would you deal with this problem?

 

[RSW]

I would try to go to other areas of the city that have a similar type of obsolescence and try to abstract the ratio or percentage of the obsolescence from there and apply it to your subject property.

 

[Lee Lansford]

Have a subject property (duplex) that is contiguous to warehousing and storage lot area. I can find no comparables in the past 36 months of a similar nature.

Nor can I find any sales in the past five years that have the same external obsoleteness as the subject to extract a market reaction from.

I am noting in the report that this appears to be external obsoleteness, but can find no sales to extract a market reaction to make an adjustment.

I have searched the entire county and rural towns.

How would you deal with this problem?

You may not find the SAME external obsolescence in the market, but I have a hunch that you can find something with SIMILAR external obsolescence.

 

[Ray Miller]

Small rural towns, I going 19 miles for rental comparbles, only one in the town, I going 11 to 19 miles for sales comparables.

I have looked for such things are RR tracks, Feed Mills and Grain Storage, Warehouses, Light Manufacturing Plants. Nothing in the County have I been able to find.

This thing is turning in a many pelt appraisal, more then I collected CAD.

Lots of stuff has been on the market and then taken off in the past 24 months, but no sales.

 

[ghrousseau]

Have a subject property (duplex) that is contiguous to warehousing and storage lot area. I can find no comparables in the past 36 months of a similar nature.

Nor can I find any sales in the past five years that have the same external obsoleteness as the subject to extract a market reaction from.

I am noting in the report that this appears to be external obsoleteness, but can find no sales to extract a market reaction to make an adjustment.

I have searched the entire county and rural towns.

How would you deal with this problem?

When you say Duplex, I am assuming a 2 unit rental property? Does it seem to reduce the market rent for the subject? Most times I find external obsolescence has very little if no impact on market rental rates, so I typically note the obsolescence but make no adjustment because the market did not recognize it. Not sure about your market though.

 

[DaveH]

I would try to break down each obsolescence and find properities with those similar, then work my way from there. It may take 8 to 10 comps before you will find all of you obsolescences, but looking at them not as a whole in a property, but as a small issue in a property will work better..... Just my $0.02

 

[RSW]

When you say Duplex, I am assuming a 2 unit rental property? Does it seem to reduce the market rent for the subject? Most times I find external obsolescence has very little if no impact on market rental rates, so I typically note the obsolescence but make no adjustment because the market did not recognize it. Not sure about your market though.

Good Point!

 

[CANative]

You belong to how many MLS's? 15 or 20? Or is it like 100 or so?

If it's a hot box little duplex then it has little appeal for owner occupancy on one side so income is the way to deal with this. Find sales of properties near commercial or industrial sites or in other unpleasant surroundings from several markets, collect rental rates for those properties and get the GRM. Apply that GRM to your subject instead of GRM's from unaffected comps in your subject local area.

Use the data to make adjustments in the sales comparison, perhaps on a percentage basis or whatever works best.

I'd charge 30% more (two unit regular price $650 x 1.3 = $800 to $850). For my area right now, units have become so hard to appraise that I'm pricing myself out of the work intentionally.