Habitat For Humanity House, How Do You Appraise These

[davetherock]

I am appraising a Habitat home this afternoon, never done one before . The owners have had it several years and are moving out of the state, this is a sale. The street has all nice Habitat homes, but all around it for miles are dilapidated homes and empty lots. The nearest similar type home would be 5 miles away in better areas. My initial reaction is to use older homes nearby and adjust condition and age, and nicer homes 5 miles away and adjust for site. Any other hints or such?

 

[EddieB]

My experience with appraising homes built by Habitat is that after a few years, they fit in nicely with the surrounding homes. Appraise this like you would any other renovated home in a similar area.

 

[Elliott]

Is there a profit participation clause? I've never done a Habitat house, but I observed prices in a subsidized SFR project and USDA use to have a 50% profit participation clause. It kept prices at closer to original determined price, then as the restrictions were removed, prices came closer to market and then were at market.

 

[Don Clark]

Appraise like you would any other home. These homes are built strictly to code, and are likely better as far as quality is concerned. 5 miles, in many markets, is acceptable.

 

[Sid Holderly]

I have volunteered for Habitat and their construction in this area is better then entry level builders and approaches that of some custom contractors.
In this area, they are sold to the ower with 2 mortgages. The first covers the materials plus ??? & the second compensates for labor. The total of the two should be the market value of the new home. The second mortgage is forgiven at a certain percentage per year. If they more out they have to pay off the mortgages just like anybody else.

Any comparable stick-built of similar age and condition would be a comp. In my area of small towns going 10 miles out not uncommon.

In the local city, Habitat works with the city government in renovating older homes and filling in replacements on vacant lots as well as homes in the newer (blue collar for a lack of any better term) subdivisions.

 

[Michigan CG]

It sounds like the Habitat homes in your area are in locations like they are in my area. You are looking for market value as defined. Your problem is the location adjustment not the site value adjustment.

In my area the Habitat homes are located on sites that are basically worthless while in the better part of town the sites are only worth about $10,000-$15,000 which does not account for the differences in value; the difference in value is the location, not site value (in my area).

In my area the worn-out houses in the good part of town are selling for $60,000-$90,000 while the homes in my Habitat neighborhood are selling in the $25,000 range.