Fireplace Adjustments

[residentialguy]

Obviously in MN, FPs are a desired feature. But even here, (where it snowed yesterday, btw - ugh) trying to get concrete market evidence for a FP adjustment is futile. I rarely make adjustments that are less than $5,000 anymore. That small of an adjustment can be affected by so many factors that it's a joke. The market sways that much on identical properties. Rather than make separate FP adjustments, I include it in my overall quality adjustments.

There was an appraiser on FB claiming he made a $70,000 adjustment on a jeweled fireplace. Cool. Now show me all the other properties that have a jeweled fireplace that support that amount. Well....he knows because he's been an appraiser for 35 years.

Good luck with that one. Whereas adding to the quality would give him so much more leeway...better yet, qualitative analysis would free him up even more from being backed into a corner in the courtroom. But no....quantitative fireplace adjustments were the best way to defend in court. Joyce even agreed, lol.

 

[Alpine]

I love the growing preoccupation with "support" and "proof" for adjustments. I can recall hundreds of instances wherein the house with the largest GLA in the cookie-cutter subdivision (re)sold for the lowest price. Same with heating systems: how many times has the comp with the forced-air furnace and central AC unit sold for less than the comps with the cheapo, fire-hazard Cadet-style wall heaters and no AC? Same with granite countertops and a host of other upgrades and amenities which are valued by most buyers, but which don't magically support consistent adjustments in all instances.

The house i bought last summer has two fireplaces. One is on the lower (but still above-grade) level where I set up my home office. The seller paid $5,000 several years ago to put in a beautiful Vermont Castings insert into a 1960s brick fireplace. I value the hell out of it on cold days for the bone-warming heat and soulful respite from the ravages of AMCs. The large, open office space the room affords me is a big reason I bought the house over my options, and the fireplace makes the room. I furnished the fireplace area with a tapestry rug, soft couch, a wall of books, a vintage turn-table, and a Stickley-style rocker, and I routinely walk across the room to take psychic breaks from this god-forsaken business in front of the fireplace. So, you can't convince me or the guy who paid $5,000 that an adjustment for its presence has no support. You can take my stainless range, but you can only have my fireplace when you can pry the poker from my warm, dead fingers...

I tend to apply/apply fireplace adjustments depending on the age and style of the house, and factor the efficiency of the amenity. For 1950s through 1970s houses, there is typically little evidence to support a difference. I just flipped a 1970s ranch wherein I walled over the fireplace, because it was a funky, low-cost pre-fab unit whose firebox was sketchy and the design dated. The fireplace also made furnishing the room difficult in a small floorplan. My original intent was to update the mantle, face, and hearth, but in the end, walling it over greatly improved the appeal and flow of the place. But for older, vintage properties, the fireplace is often an aesthetic centerpiece that exudes appeal the minute buyers walk in. So, even if you can't isolate a specific adjustment from the comps for the fireplace, it is an essential component of appeal and overall finish quality. And while you can argue that it should be reflected in a collective "Quality" adjustment, I can counter that a buyer, seller, and perhaps professional user of the report will be looking for value on the amenity line of the report.

For newer construction, when a gas fireplace is standard in a subdivision, and the builders are charging $3,000 (+/-) for them, there is also argument for contributory value similar to upgrades such as granite countertops, etc. In those instances, you can often derive support from paired sales, but not always. But when does "always"-- as in specific, in-the-instance proof-- rule our craft? If the growing trend for "provide specific support" for each adjustment continues, I will simply quit. An essential aspect our job is translating the emotional component of market forces into the mathematical/statistical, but it has to be applied on a broader, ongoing scale...

 

[Michigan CG]

I have seen plenty of $500/$1,000/$1,500 adjustments for fireplaces but am yet to see a similar adjustment for granite counters or solid oak flooring. If I refi my home will the appraiser give me credit for the two fireplaces in my home at about 1% of the total worth? Most likely. Will he give me credit for the $10,000 in landscaping or the $15,000 deck? I fully anticipate a $5,000 adjustment for my in-ground pool even though the cost is about $35,000. Will he give me credit for the heated bathroom floors or the quartz bathroom counters? Most likely not, but I bet I will get the $1,500 adjustment for a couple fireplaces, one of which does not work.

 

[Mr Rex]

Landscaping dies and pools go green when not attended to, one reason for the diminished market support for the actual costs versus actual value. Real FPs that cost 10-25k to build often go unused after the romance of toting in wood and hauling out ashes fade. Most often they revert to gas logs that cost say $500-1000 and could have been built in new for $+/-1500 and folks wonder why they see that number as the contributory value of a FP...

 

[MEL]

Mel,
What do you typically adjust and what support do you have to support it? Can you post an example of your support?

In fact fireplaces are so common here that I only see a few homes a month without one. New construction without one? Forget about it, unless the buyer is absolutely against it for some reason. I have one of those “mythical” matched pairs in my file that adds support for my fireplace adjustments along with sensitivity analysis from the adjustment grids.

Now these are full masonry, wood burning fireplaces and not the cut a hole in the exterior wall and run a stovepipe or power vent type. Depending on the area adjustments have been approximately $2,500.

 

[Tim Hicks (Texas)]

I have seen plenty of $500/$1,000/$1,500 adjustments for fireplaces but am yet to see a similar adjustment for granite counters or solid oak flooring. If I refi my home will the appraiser give me credit for the two fireplaces in my home at about 1% of the total worth? Most likely. Will he give me credit for the $10,000 in landscaping or the $15,000 deck? I fully anticipate a $5,000 adjustment for my in-ground pool even though the cost is about $35,000. Will he give me credit for the heated bathroom floors or the quartz bathroom counters? Most likely not, but I bet I will get the $1,500 adjustment for a couple fireplaces, one of which does not work.

Those counters and floors go under the quality adjustment.

So you appraise a new home in a subdivision and some have fireplaces and some don't and you don't adjust?

 

[Michigan CG]

Those counters and floors go under the quality adjustment.

And so does the fireplace.

 

[MEL]

And so does the fireplace.

lol, ok, next time your power goes out in the winter see how well those quartz counters and marble floors keep you warm.

 

[Mike Garrett RAA]

Typical adjustment IN MY MARKET for a fireplace in a median priced residence is $2,500 to $5,000. Very popular feature in this market. Not all fireplaces are equal, ie, wood burning, gas log, insert, full wall, etc. I still prefer using a percentage of contribution rather than just a dollar amount.

Looking for a basis for an adjustment? How about what builder's are charging as an option? I certainly understand why some markets might not demonstrate added value; however, I think many appraisers just don't like to make adjustments for anything.

Ask yourself this. Suppose you are not an appraiser. You are are buyer and looking at two houses basically identical. One has a very nice brick half wall wood burning fireplace with a stove insert. The other house doesn't have any fireplace. Would you pay the same amount for the one without the a fireplace?

 

[Tim Hicks (Texas)]

And so does the fireplace.

No it does not. You can have a home without a fireplace, but you can't have a home without flooring and counter tops...none that anybody would buy that was not going to install them.