Fireplace Adjustments

[TRESinc]

I fully anticipate a $5,000 adjustment for my in-ground pool even though the cost is about $35,000.

you should consider yourself lucky if you get a positive adjustment for an in-ground pool at all. between the cost to maintain, potential for added insurance costs and other factors (here we have requirements of a fence being installed within 10 feet of all sides of the pool, minimum 3' height) coupled with the maybe 3 months of use a year they are more of a hindrance than a commodity. your weather is pretty close to what we get.

very early in my appraisal career my eyes were opened to in-ground pools. had a sale of a house with one, then went back a year later for a refi and the pool was gone. the owner was a professional triathlete (didn't even know such a profession existed) so i asked him why he got rid of the pool when he basically swam for a living. he said it was cheaper to get a YMCA membership, or even not and pay $5 a use, to use their pool vs maintaining his own in his backyard.

compare that to a fireplace, which costs MAYBE $100-200 every few years when you have the chimney cleaned.

 

[Baron Von Squidlo]

I have never seen anyone show support, actual support, for a fireplace adjustment.

I know you don't want to hear this but you can with regression analysis.

 

[residentialguy]

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[residentialguy]

I know you don't want to hear this but you can with regression analysis.

Providing that there is actual support to be seen. Pretty tough to extract a 1% adjustment in a market that typically sways ~5% on identical houses...which you won't find. So now you have a gazillion other things that can be attributable to the price variances in the real market. RA has limits and small individual items is one of them.

 

[residentialguy]

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.

Yes, it is part of quality....just as that 2 story open great room with multi-tiered dome ceilings and marble pillars are quality (last I heard, you didn't need those, too).

Including it under quality gives the appraiser more wiggle room to defend.
Which would you rather defend?

• 20k adjustment for "quality" or
• 2500 for granite tops, 3000 for fireplace, 5000 for marble tiled baths, 7500 for 2 story great room, 2500 for solid panel doors?

I'll take door A for the win, Tim.

I've stopped making small adjustments. If I have strong market evidence, I'll make a quantitative adjustment, but I still round to min of $2500. If it's under 2%, I don't adjust. I reconcile with qualitative analysis. The days of whittling to a nice close quantitative range is over, unless you're doing a large complex with many similar properties.

 

[KenAZ]

I adjust between $1,000 and $5,000 depending on the house and neighborhood. Everyone love a fireplace, even if it is never used. Just adds appeal. I did a paired sales analysis on this about 10 years ago, and found $1,000 for tract homes was actually supported. Of course I could only do that in a stable market in a neighborhood of tract homes. Regression would never see it.

 

[Terrel L. Shields]

know you don't want to hear this but you can with regression analysis.

I've run a lot of regressions on residential property to lump in the fireplace as a "dummy" variable (1, 0) and have yet to have a clear and reasonable adjustment. The amount is often absurd (like $50 or $50,000). A fireplace tends to be a proxy for the overall quality in my opinion.