Garage Adjustment

[Grace]

What are other appraisers using for garage adjustments? My old boss used to use $3,500 for a 2-Car Garage, $2,500 for a 1-Car Garage, and $1,500 for a carport. He never told me where those figures came from (he was the type that told you how to fill in the form and nothing more). I used to ask questions, but learned pretty quick that he didn't appreciate them. Maybe he didn't know, maybe he was just using figures that his boss told him to use way back when. I think that happens a lot in appraising.

I used those figures for years and have never been questioned, thank goodness.

I'm appraising an older home and am not using the cost approach, but the subject doesn't have a garage and the comps do. I looked up an average quality garage in Marshall & Swift, but it requires the square footage, etc. and I don't have specific info. on the comps. I could make a pretty good educated guess (400 SF, wood siding, etc.)

I want to be able to respond to underwriters if they ever question my garage adjustments, and I guess it would be nice to produce a credible report!

I would feel pretty stupid saying "Well, that's a good question! I've just always used those figures!"

 

[Lee Lansford]

What are other appraisers using for garage adjustments? My old boss used to use $3,500 for a 2-Car Garage, $2,500 for a 1-Car Garage, and $1,500 for a carport. He never told me where those figures came from (he was the type that told you how to fill in the form and nothing more). I used to ask questions, but learned pretty quick that he didn't appreciate them. Maybe he didn't know, maybe he was just using figures that his boss told him to use way back when. I think that happens a lot in appraising.

I used those figures for years and have never been questioned, thank goodness.

I'm appraising an older home and am not using the cost approach, but the subject doesn't have a garage and the comps do. I looked up an average quality garage in Marshall & Swift, but it requires the square footage, etc. and I don't have specific info. on the comps. I could make a pretty good educated guess (400 SF, wood siding, etc.)

I want to be able to respond to underwriters if they ever question my garage adjustments, and I guess it would be nice to produce a credible report!

I would feel pretty stupid saying "Well, that's a good question! I've just always used those figures!"

In various and diverse neighborhoods where I regularly appraise, the contribution to MV of a 1-garage space vs. NO garage space may range from "next to nothing" to $35,000.

Does this help?

By-the-way, if your former Supervisor Appraiser used such adjustments (as you shared in your message) over a wide range of neighborhoods with a wide-range of housing values, your SA was (and probably still is) clueless.

 

[Lee Lansford]

...I would feel pretty stupid saying "Well, that's a good question! I've just always used those figures!"

Your concern is well founded.

 

[Walter Kirk]

All adjustments must reflect market reaction. You must determine how much a typical buyer will pay for that garage. This will require you to do a pared sales analysis, in fact several. Your old boss may have done such an analysis but my guess is that he was just lazy and used those numbers.

Do not confuse the Cost Approach with the Market Approach, it doesn't matter what M&S values a garage at since you want to know what it will sell for, not what it costs to build.

This is basic stuff and if you want to be a professional appraiser you must underatand the basics.

 

[Michigan CG]

Grace your old boss did not know what he was doing and did not teach you the correct way to do this.

Some garages, the extra space may be worth $15,000, and for some they may be worth nothing.

It all depends on the specific market.

A simple garage costs about $20/SF to build, nice garage space could cost $30/SF and more.

I have given $12,000 for an extra stall and I have given a two car garage no value.

I have seen people pay more that it costs to build because it can be financed vs. having to build one with their own $$$.

I have met so many people who appraise based on a "list" and it is very wrong. I have heard from more than one "I adjust for size by $25/SF for old or small houses and $50/SF for new or big houses because that is the way my mentor taught me to do it".

May I suggest you buy Appraising Residential Properties, 4th Edition from the Appraisal Institute and read it cover to cover.

http://www.appraisalinstitute.org/store/p-99-appraising-residential-properties-4th-edition.aspx

If you ever had to defend your reports to the state, a reviewer or in court you would lose badly.

For your next CE class I would take a sales comparison class from a REPUTABLE provider, not Joe's Appraisal School.

 

[Couch Potato]

I would feel pretty stupid saying "Well, that's a good question! I've just always used those figures!"

Another self-taught appraiser being added to the ranks. Good luck. You have come to the right place. m2:


Rather than use the number you got from your boss, who got it from his boss, who got it from his boss, who got it from his boss, who got it from his boss, who got it from his boss, who got it from his boss, who got it from his boss, who got it from his boss, who got it from his boss, who got it from his boss, who got it from his boss, who got it from his boss, who got it from his boss, who got it off a list some stranger at a party gave him; try a search for sales that are similar except for the garage, and look at the price difference. Or maybe download a significant number of sales in a file you can open in a spreadsheet to use a statistical analysis to extract a reasonable value. You could use construction costs as a guide, but equating cost to value is problematic too.

 

[starmansf]

Grace,

The correct answer is a paired sales analysis. The value of garage parking depends on the area in question. There is less availability of garage parking in cities as opposed to rural areas, making it more valuable.

 

[Diego Lopez]

Paired sales is the ideal way to figure out what to adjust for anything on the grid, but sometimes is very difficult to extract a number using paired sales because the market is imperfect. The fact of the matter is that a garage might be worth $10,000 to one buyer and $5,000 to another in your specific market area.

If I can recommend a book to you from the AI I think is called "Defending you opinion of value." It goes over different techniques of determining adjustments.

One-way you can do it if you don’t get anywhere with a paired sales analysis is with the depreciated cost method. With this method you figure out what a garage would cost to build, subtract depreciation, and you have a basis from which to make your adjustment.

Again, this is not the ideal way of determining an $$ adjustment (paired sales is better) but is better than "I got the number from my old boss."

 

[starmansf]

oh, for crissakes...

adjust it at $5000 or $10000 per space and leave it at that.

 

[38Scarcello]

I would do whatever needed to find a comp without
a garage. $20 says it will come back to bite you in
the tush especially the way the stips are these days.

"Appraiser to provide 1 additional comp within 2 feet
of the subject property that has sold within the last
24 hours that does not have a garage"