Help.....log cabin appraisal order

[Mike Ferrara]

HELP...........I have an order to appraise a custom built log cabin home....has any one done one of these......how do they compare to stick built..........how does the cost approach apply??????????

 

[Mountain Man]

Marshall & Swift has the cost analysis of log homes in their book. If it is a really extraordinary home, they have a special cost book for that too.

 

[Dave Smith]

More expensive than most stick builts. Its a "quality" issue in the respect that most log home buyers are willing to pay more for the "mystique" of living in "Abe's log cabin."

Use comparable "exotic" custom built homes, preferably log homes of similar quality for comps. If log homes aren't available then use the best stick builts you can find for comps. If you dont' have good quality stick builts then use the next best you have and do a quality adjustment... and explain, explain, explain.

Then hope, hope, hope... that the UW reads 'splaining you did.

 

[Tim Hicks (Texas)]

In our area, lenders require at least two log home comps, regardless of distance. Fortunately, they are not too uncommon and that is feasible. Usually my third comp is a wood sided frame home.

 

[Restrain]

You need at least 1 and preferably two log cabins. The problem is the quality (watch for green wood-they shrink) between companies. I have seen companies use green pine and install bolts that have to be tightened. Other companies use kiln dried spruce that are notched on the top and bottom and do not shrink. Look very carefully. If the logs are splitting, they were put up green and will shrink and separate. Look for extensive caulking. In a good quality home, the caulking should be virtually invisible between the logs. Check around the windows for separation and settlement. Finally, look for deterioration. If a log is showing signs of rotting, you have to cut the log out and replace it, which is very difficult for a log home and very expensive.

Good luck.

 

[Richard Carlsen]

I have two custom log houses going up right now with regular draw inspections once a month.

One house will have about $840,000 into just the improvements. My experience has been that the market in my area will not pay for the cost of such a structure. The appraisal on this one showed that the market would only recognize a value of about $720,000 for structure and the land. These things tend to be monuments to the owners.

Make sure that if it is new, you get all of the builders cost estimates and quotes. You will have to then determine how this stacks up against M&S if that is what you use. In this case, I determined that "Very Good" was the equivalent.

If you are to do the draw inspections, realize in advance that log houses are not constructed like frame houses and the inspection progress forms provided will not usually work. There is so much handwork involved from cutting in electrical runs to chinking to sealing that it just won't be comparing apples to apples.

I find log homes a lot more difficult to do. Especially when the UW wants 2 additional log houses as comps. I've had to go as far as 45 miles for a comp and that usually is not comforting to an UW.

I would suggest you read a book from the local library on "How To Build Your Own Log House" or something like that to get an idea of what is going on in putting this thing up.

 

[Charlotte Dixon]

In our market area, the lender also requires two log home sales, regardless of the distance. I never put a vinyl clad home in as a comp, but stick to cedar/wood exteriors. It appears to me, at least in my market, that resales of log homes (10-20 yr. old ones) seem to diminish in value. Also, the Realtors are listing these things too high and maybe have had some pressure from the seller. There are new log homes going up in our market area and the log home buyers seem to want their brand new one, apparently so they can watch the construction, which may be part of the whole attraction to log homes. As far as cost, Marshall & Swift is the answer for me. I've been the "bad guy" in a couple instances because the log homes didn't conform to the neighborhood. Example: Flat piece of sandy ground with no trees, at the beach, surrounded by contemporary vinyl sided homes. I mean, does this make sense :?: We have a couple of developments in our little state which consist of nothing but log homes, as per their restrictions. These areas are wooded and graded to display the log homes at their best. I've been lucky finding current log home comps because of these subdivisions.

 

[Nancy in Friday Harbor]

Mike,

You will never get this by underwriting if you persist in calling it a "Log Cabin Home". Lose the word "cabin", unless it really is a cabin. The word cabin implies small, rustic with perhaps the dooly out back in a littler "cabin". Large log homes are anything but cabins!!

In my market, we rarely have enough sales to have log comparables. The market basically looks at the log home in the same way they do any other home of the SAME QUALITY. Quality items to look for are the size of the logs, tightness of the joints/chinking. Properly set, windows & doors should have a space above them and not be fully secured to the logs at the sides -- let's the logs "settle" around them. The space is often covered by a board or trim work. If you don't have log comps, go back a couple of years. And make comments that a number of similar log homes have been built in the last few years (if this is true, of course), but none have come to market. Or comments that they have ready market acceptance when comparing like quality. (I assume in your market that they really do -- there are some areas where log homes are NOT the thing to have.)

Ain't appraisin' fun?

Nancy