House Style value?

[Suzanne K Hansen]

Just wondering how style of architecture fits in to this appraisal I'm working on. In a rural canyon/valley desert area where homes come in all shapes and sizes form mobile to grandure (conforming not being the issue), this is a semi grandure home in the Southwest Santa Fe Pueblo style. Although it fits the terrain, in Southern California, it is unique. I know I will get a question about this from the client and the home owner, so is this unusual style good? bad? or indifferent?

Thanks,

Suzanne

 

[Ted Martin]

Is it so personalize that it will require a longer marketing time?

 

[Farm Gal]

This *may* be a complex appraisal, protect yourself by doing a little more homework thatn usual! It may however be a lot more fun than the typical tract home, and well within your competency range.

There ARE occasional Pueblo style homes out there, I have seen them, so it is not entirely unique, but atypical should be handled with care: Marketing or appeal depends to some extent on how extreme the styling is and to what extent it might be 'polarized' to the degree that a 'typical' buyer :roll: (what ever that is) might by pass the house in favor of a more traditional for the area style! It sounds like it is in an area where there is room for some individuality anyway. Is the location atypically desireable or the opposite due tothe lack of homogenity of home styles?

See if you can locate some other similar style and scale homes and pay close attention to the DOM for the closed sales!

You may need to increase your marketing and exposure times as well as consider the value issue. I'd also cast a wider time search to try to find 'similar' atypical styles.

 

[Suzanne K Hansen]

Using your advice, Lee Ann, and implied advice, Ted, I just did an exhaustive search of the MLS for all of the County (no map code no nothing) and no time restrictions for any style, Santa Fe, Hacienda, Southwest, or Pueblo comments in all possible comment fields. Although each of these terms provided hits, only one in all of this huge county had a description or picture that resembled the Pueblo style of the home I am appraising. There were numerous other homes with unique styles in the stratasphere price and size range and in the most expensive areas of the county. I could not consider these as comparables for many reasons. I also looked at DOM for these unique and huge homes, and it was longer in general, but we are talking about estates.

So I'm still not sure how to get at this question of style for this particular home. My gut tells me that if you like this kind of home, you'll pay lots for it and if you don't, you wouldn't go near it. I have the feeling that it is unique enough to be a negative. I don't want to say that because, like I said, if you like it you'll jump to get it.

By the way, it is a refi not a purchase and it was listed 3 times and withdrawn in 97, 98, and 99. Any thoughts on this part as well?

 

[KD247]

Suzanne,

It's good to have adjustments that are clearly shown by the sales used in your report, but sometimes an important characteristic isn't bracketed by the best comparable sales. In that case, you may want to resort to a separate analysis of that single characteristic.

The best indication of the market's response to your subject's style is found in its sales history. When the property last transferred, were competing homes with conventional design selling for significantly more? When the subject was unsuccessfully listed, were the more conventional homes selling near the subject's asking price? (It's important to try to find properties that are similar to the subject in every respect, except for the design difference.)

If the subject's sales history produces inconclusive results, find other Pueblo style homes and perform the same analysis. You may need to go way back in time (maybe even five or ten years) or to distant competing neighborhoods (perhaps a couple of hours away), but I guarantee that the data is out there, somewhere.

Once you find some previous or distant sales, you can develop a factor that reflects the market's response to this style. My guess is that you aren't going to find a significant supportable market response to a Pueblo style home. I've seen several of them in Malibu, Westlake, and throughout Santa Barbara. There's even a newer tract in Summerland that mixes some pueblo style homes in with other Spanish and Mediterranean styles. They even have the wooden ladders leaning against walls. There's no one architectural style that appeals to everyone, but I've only observed positive reactions to Pueblo homes. (It might be a different story if we were in Chicago.)

Before you do the mathematical analysis, you may want to interview buyers, sellers, and agents in the subject's neighborhood. Even in expensive neighborhoods if you walk up to someone watering their lawn or checking their mailbox, they'll usually be happy to talk to you about their opinions. It's just about the only fun part of this job and it provides some of the best insight you'll ever find. If you get unanimous favorable reactions to the idea of a Pueblo style house, you might even feel comfortable throttling back on the extent of your investigation.

Koert

 

[Ted Martin]

Suzanne,

I was trying to get you to take a more subjective view of the subject. Your own personal impression of the subject's curb appeal. Don't get to wrapped up in the appraisal process at this time. View it as a potential buyer or selling agent would. Once you've got a feel for it finding the comps will be a little easier.

 

[Farm Gal]

Ted nailed part of it~! You need also to emulate a BUYER not a statistics machine!

But keep in mind should your looksee determine that it really IS 'atypical' in appeal:

Some times a unique home is appealing to a particular buyer but marketing time and exposure time get into the act to a degree that precludes a 'normal valuation'... IF it is going to take a year or two to FIND that 'special' buyer, the lender had better know!

How do you figure this out? Koert's advice is well made, but I'd also make sure I talked at LEAST to the realtors who listed the thing!

Don't get caught in the trap of 'this is what it would be worth if the right buyer' came along! If the same size/location home minus the 'style' would sell in 30 days then you have an issue that needs to be addressed!

And watch out for that 'would pay more for' thing... I would want PROOF of that one, there are very few houses for which buyers line up an pour the last pennies out: emotional love of style is one thing cash is cash for most folk... particularly in these perilous financial times...

Frank Lloyd Wright? Yup!
Archetect Joe who had free reign to design? :? maybe... but show me the money first!

 

[KD247]

Ted and Lee Ann,

You're right, but it's pretty clear from Suzanne's initial question that she didn't feel comfortable subjectively estimating market reaction to this unusual style. (Many appraisers would just fake it; asking the question is a good indication of Suzanne's high level of professionalism.)

When I find myself floundering, I like to take a step back and outline a strategy for approaching the problem. Otherwise, it's too easy to spend hours staring glassy-eyed at a huge stack of meaningless sales data. Deciding if a factor is an important value determinant is probably the most important part of the appraisal process. Thank goodness that it's usually intuitively obvious!

Suzanne said, "I know I will get a question about this from the client and the home owner...". The client's answer will be in the report (something like, "Although there is no recent data involving sales of Pueblo-style homes in the subject's neighborhood, analysis of sales trends in directly competing neighborhoods shows no significant market reaction to homes with Pueblo design"). The homeowner doesn't get to ask the question. "I wish I could discuss this with you, but federal law prohibits it". If you do feel compelled to violate USPAP and discuss it with the homeowner, remember to start a separate workfile! (That's a joke.)

Koert

 

[Suzanne K Hansen]

Thanks so much for your comments, Lee Ann, Ted and Koert.

After pulling up data on market times for cancelled listings over the last 6 years for similar sized homes in the map areas and comparing them with market times for sold homes of the same criteria, then pulling out unique listings and comparing those market times, as usual, I am not only glassy-eyed and brain dead but I've discovered that everso important scientific principle that when results are equivocal, all possibilities are probably equally likely.

Sound like gobbledigook? Sort of... actually there is some kind of common sense to that.

I just discovered that both flooding and fires occurred during the period of time when this property was listed several years in a row.

It's getting more and more interesting!

Tomorrow...the inspection. Tonight...recycle a ream or so of paper. (Well maybe only half a ream)

Suzanne

 

[Farm Gal]

:lol: :lol:

Well you have probably if nothing else proven a point: That there is more to this than science, and it ain't just art either :wink:

Sounds like you cast a pretty wide net... methinks I'd have done some of that AFTER looking at the thing... rather than before,

Whether my response was 8O 8) or to the 'viewing'.

As Koert said: the homeowner gets Nuttin' but , "Isn't this interesting" "What a lovely view", or other minor inanities at the time of inspection. Value? "Why Ma'am it will take me many HOURS to establish that now that I know what the house looks like"

Seriously, when you get a been listed but not sold, be it due to being overpriced, a unique property, or (worst case) a true white elephant: see if you can talk to the listing agents. Some (discounting sour grapes) have a real feel for what made something NOT sell at the listed price~

here's hopin it is 'near normal'! :wink: