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GLA Adjustment On URAR

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Conrad

Freshman Member
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Feb 4, 2002
Just for my own information, would a tract home of 1300 to 1500 SF with few upgrades and average quality be adjusted the same as a 4000 to 4500 sf tract home that was good to very good quality with every top upgrade the builder has available so it could be a model for an exclusive gated community? I am having a little trouble convincing a review appraiser that it should be higher than $30 a sf on a home that apppraised for over 800K.

Thanks in advance
Conrad
in Las Vegas
 

Fred

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Jan 15, 2002
Professional Status
Retired Appraiser
State
Virgin Islands
I am flying blind, but it would probably only be the same by accident, because you seem to have different classes of house. Are you adjusting the 4,500 sf one with sales around 4,500 sf or something a lot different? You should put up some numbers, like comp sizes and prices, and any significant adjustments you made.

It is apparently very common for people to use size adjustments based on square-foot rates much lower than the raw square foot prices or the contributory house prices. (That doesn't make it correct, though.) For your 4,500 sf house, those numbers are probably somewhere around $180/sf or as little as $120/sf.

In my view, using $30/sf or less at the prices you gave, there is an implicit argument that the house is an overimprovement and thus passed the "point of diminishing" returns;" so each additional square foot adds less and less to value.
 

Mike Garrett RAA

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Only if they were selling for approximately the same amount!
 

Phil Rice

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If you have those 2 homes on the same sales grid, that is your problem, or more to the point, that is the problem that the reviewer has.

If I were forced to use those 2 homes as comps on the same report, I would adjust GLA at the same rate (I use $50 per foot), and make a condition and/or quality adjustment on one or both to demonstrate why the big price difference
 
Joined
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Retired Appraiser
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Phil,

Will you add that comment to this thread:

http://appraisersforum.com/forum/index.php...=60&#entry75712

About being 'forced' to use those comps on a review grid, (ie: non comparable comps in a review because that's what was used by the original appraiser and the client asked you to re-grid THOSE comps) and how subjective the adjustments end up being when a comp used is not really a comp? Please expand on that a little more if you would, too. It's one of the scenarios I'm looking for in that thread.
 

Ben Vukicevich SRA

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Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Conrad,

If you are appraising new construction.. a ballpark s/f adjustment is very easy to abstract.

Just wander around builder websites in your area and peek at their models. Take Toll Brothers, for example. They are active in Nevada and in my area. Go to their website: www.tollbrothers.com

Look at their models in a Nevada development. Toll will tell you the list price and the square footage of the models. Just subtract the s/f difference from each model and divide it into the difference in the sale prices. That will give you a ball park of what the additional s/f adjustment should be and support for your argument with the review appraiser. Hopefully, your builder has a website. You can do this with any builder. The more, the better support you have. And since they've sold homes at that base model price,... there's the market adjustment for GLA.

Ben
 

Mike Garrett RAA

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Toll Bros bought out my step brother to gain access to the Phoenix market.
 

Conrad

Freshman Member
Joined
Feb 4, 2002
Ben,

Odd you should mention Toll Homes. This appraisal was on one of their models. Highly upgraded model with a base price over 500K. reviewer stated that because it is a "tract" home it should get the same $30 per SF as any other tract home. That is why I asked the difference in my original question. I didn't use a smaller home in the grid. All homes were within 100 to 200 SF of the model. I would never use a 1200 to 1500 sf home inthe same report as a 4500 sf home.
Thanks for the info everyone.

Conrad
 

Ben Vukicevich SRA

Senior Member
Joined
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Professional Status
Certified General Appraiser
State
New Jersey
Conrad,

So you're appraising a Toll?? I have four Toll home appraisals to get out tonight..

I did one awhile ago where the buyer didn't like the upgraded ceramic or marble flooring. He had over $100,000 of porcelain flooring installed. Nice stuff. Along with a $20,000 New Mexican Limestone faced fireplace. Now we're talking over-improvement.... :D :D

Ben
 

Conrad

Freshman Member
Joined
Feb 4, 2002
Ben

Thanks for the input, This is almost maxed out in upgrades, but there are several homes in the development that have gone over 1M, for the same basic square footage. This one only sold for 886K so I don'e think its over improved.

Conrad
 
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