Historic home in the land of newbies

[Alison Swain]

I appraise in central Florida, where there are very few homes still standing which were built prior to the mid-1920's. I have an assignment to appraise a home which was built in 1891 (that's ancient for mid-Florida). The house was completely gutted and rebuilt a year ago, including new electric and plumbing. The owner says his insurance agent is ready to write a new policy and treat this as a new home.

My question: What may I use as legitimate comps? I've run a search of the whole town and the only recent sale I've found is a home built in 1930. May I use newer homes comps?

 

[Couch Potato]

Look to surrounding areas too.

I recently completed an appraisal for a sale of a house built in 1891 just a little northeast of Orlando. Such jobs are a lot of work, but I can assure you there are comps out there to match any condition of your subject. Try searching in the MLS using year built and Orange county as the only criteria. Don't hesitate to also look in Seminole and Lake counties, applying location adjustments where appropriate. I hope you are charging a large enough fee. The job I did took two weeks of my time.

Make sure you have help working on the job. You will need to talk with experienced appraisers to sort it all out. A job like this will make you head swim at times. The "treat it as a new house" line seems like a bit of a red flag to me. It is not a new house and that is part of its value in the market.

 

[hastalavista]

Alison-

The term "historic" implies a lot of things that may or may not be appropriate to your subject, and a 1891 built home may or may not be considered "historic", depending on how that term is used:

If historic = old, then make sure your analysis and report reflects this limited use of the term.
If historic = some aspect of the home that gives it historic significance (special design, special appeal, special past owner, special historical event that occurred on or near there, Elvis is regularly seen there, etc.), then you may have a very, very complex appraisal and I would advise seeking out some local & experienced help!

 

[Renee Healion]

How much really is left of the house that is old? It sounds like an effectively quite new house. Not brand new, but not old either.

Are they claiming any antique value? If not, I would suggest using (more typical) older houses that have been updated. It does not sound, the way you describe it, that there is any need to knock yourself out trying to find something scarce for comparison unless there is antique value remaining.

(Of course some owners claim antique value after their efforts have removed much of it.)

 

[Karl]

Is it registered locally & worse Nationally as historic?? IF it is get someone that has done TRUE historic Homes to help you.

 

[Big ole Boy]

use new comps if it is all new ....

.... specify in your value ...... that the lack of market data for historic homes limited your ability to examine its influence on the market and just appraise it as a new home - if indeed it is new ....

... how about making the home 1891/5 eff ?

in your grid

put the age of each home with an effective age ....

for example:

1891/5 eff

Comp 1 ........ 1995/10 eff

Comp 2 ........ 2001/5 eff

Comp 3 ........1980/20 eff

and so on and just do your best job to quantify "meaningful age" in the context of current market trends ......

 

[incognito]

Something else you have to recognize is that even a fullyrenovated and updated (not restored) old home is loaded with functional obsolescence, and to use new, contemporary floor plan homes as comparables could be a BIG mistake. Generally speaking, I like to use at least six comps on a home like this. Throw in some older similar homes if possible (even if they are old sales, use time adjustments, if indicated). Throw in some older, dis-similar style homes. Throw in some newer homes in similar locations and/or sites. Try a listing or two. You should expext a larger than typical range of value when done. Explain this in your scope, and reconciole towards the most comparable "comps" you have.

Also, I have found that this statement works WONDERS in this type of appraisal:

Per FNMA Underwriting Guidelines, Section 408.02, "Occasionally, there may be no similar or truly comparable sales for a particular property-because of the uniqueness of the property or other conditions." Per FNMA's recommendation, the appraiser has used his "...knowledge and judgement to select comparable sales that make the best indicators of value for the subject property, and to make adjustments to reflect the actions of typical purchasers in that market." The sales presented were judged by the appraiser to be the most comparable found. The appraiser has expanded the comparable search parameters, and has exceeded standard FNMA guidelines, and adjusted for significant differences, per FNMA's recommendation.

Except for VERY few cases, there is little "historic" value in older homes. If you feel youes is one of those, than as Karl suggested, get some help from someone who has experience in this...

Also, as Greg states, you will find the sales, you just have to look hard. I just completed a 1923 home in Melbourne, (actually the historic districe of old Eau Gallie), over here in Brevard County, and found 5 sales in comparable neighborhoods built from 1882 to 1935. None were comparable, really, and all were dis-similar in design, but that is what I had to work with. I'm sure you will find some...

 

[Alison Swain]

Thanks, guys for all the input.

 

[CANative]

Often (and depending on locale) "historic" homes will be named. Sometimes after the original occupant or the builder or some event. If this is true with your subject, you might look for sales of old homes which have been named. You might have to talk to the listing agent, local historic registrar, history buffs or hisotrical societies, etc. to get good descriptive data and background on each of the comparables and reconcile that against the subject's history. Look for "named" houses.

 

[Richard Carlsen]

What comps are the most similar locationally, physically and functionally?

You may not get all three but use those sales with come the closest in all three.

Actually, physical age is not my criteria for physically. It is Effective Age. Based on the upgrades etc., sounds like a newer house would work.

But you use what you got within the above three parameters.