How Important Is It To Match Bedrooms/baths

[Smokey Bear]

I got conditioned on an appraisal because I had a 3 bedroom, 1 bath home and didn't have an exact match with 3 bedrooms, 1 baths. It's in the Berkeley Hills, with panoramic views of San Francisco, the Golden Gate Bridge and the Bay Bridge. I found comps that matched the views and had similar GLA, but they were a 3/2 and some 4/2s. In this area, the view is the most important feature, some of the homes are teardowns, and the only way to match baths was to go 400 sf smaller than the subject, when I had ample comps of similar GLA.

Also, the home was in average (REALLY average) condition, meaning original kitchen and needed some paint and updating. Some of the homes in the area have been beautifully restored, but many have not. It was a private sale that was still being negotiated and there was no contract to review. Come to find out the owner is in bankruptcy and is selling to his tenants and is claiming that the house is in poor condition "contract states property is in poor condition & seller is going to great length to have buyer acknowledge & accept present condition. " I didn't see anything that was in "poor" condition, and think that the owner is either 1. trying to sell the house to the long term tenants at a lower price and is trying to justify it, or is overly paranoid about nothing coming back to haunt him and making it look worse than it is to protect himself.

"Appraiser to review TDS and comment on & clarify condition of property " And yes, I have the usual disclaimers that I am NOT a home inspector, yada yada.

 

[CANative]

"Of the sales data considered in the analysis, the comparables used in this report are the most recent, proximate and reasonably similar sales found."

It sounds like you have considered the most salient features in selecting comparable properties to use in the report.

 

[Richard Carlsen]

You should use 'em if you've got 'em but if they are not relevant to the subject, they do not belong in the grid except possibility to included one or two simply to demonstrate the marketability of 3 bdrm 1 bath houses.

What you are referring to is an UW hang-up. Without a 1 bath house in the grid you have minus adjustments all the way across the grid and UW's don't like that. Quite frankly, neither do appraisers but if you do not have a real comp to put in the grid, adjustments all of the way across the grid are necessary.

 

[Bill_FL]

The underwriters concern is that you have only demonstrated that homes with a view and more baths are marketable in the area. You have not demonstrated that a home, even with the view, with only one bath is marketable.

They want you to prove both.

 

[Jeff Horton]

Ask the undwritter to provide WRITTEN requirements for a perfect match. Then if they still insist, offer to do what they want and send the report in unsigned and the Underwritter can sign, put in their adjustments and furnish his/her Lic number too.

Had one last week that I thought I was goign to have to do that to the UW. After the third request for the same thing I was about to unload on the UW.

 

[Robert Anderson]

Originally posted by Cynthia Hamilton@Jul 4 2005, 08:23 PM
I got conditioned on an appraisal because I had a 3 bedroom, 1 bath home and didn't have an exact match with 3 bedrooms, 1 baths....

Cynthia,

I agree with the others. You appear to have done your job and used the appropriate comparable sales.

I was curious, though, as to what you mean when you say that you "got conditioned on an appraisal..." I've been yelled at, received nasty letters, dropped from approved appraisers lists, but not yet conditioned. It sounds painful.

Bob Anderson

 

[Karl]

Maybe the underwriter lives in a one bathroom home with 6 other pepole BUT has a view & through this personnal experience , after the intial love of the view, BELIEVES that two bathrooms, beats a view. Does your Appraisal match the contract or the estimated value for a Refi. due to recent events, could make a underwriter nervous. Did you put more into the explanation than the common typical "These are the BEST comparables " cause that upsets many underwtriters when these are NOT the BEST but the ONES AVAILABLE.

 

[Smokey Bear]

The contract was signed AFTER the appraisal was signed and turned in and there was no TDS as well as of the appraisal date. Now they're wanting me to review those documents as well and comment on them or change my report accordingly. I didn't see anything that would lead me to call the condition of the property "poor".

As for the lack of baths (the Catholic syndrome, which I grew up with ), in this neighborhood, people buy for the view, and if the house doesn't suit them, they tear it down and build a new one or add on. You can always (almost) change the house, but you can't change the view.

Again, I think the owner is wanting to do lots of disclaimers since he's in bankruptcy and doesn't want anything to come back at him, but I haven't seen the contract and TDS, so I'm not sure yet. The buyers drove me nuts pointing out all the GOOD things about the house, and didn't have anything bad to say about it even though they had lived in it for years.

 

[Bill Baughn]

Good morning Cynthia,

While others have commended you on a job well done in finding a home with a view (and I think that is great too, don't get me wrong) if it had been me, I would have tried my best to find another 3/1 house with or without a view. Clearly one with a view was not available so I would have gotten one without a view. I would then had found me a 3/2 home without a view similar to the one you already had with a view. Assuming all else was similar between the homes as far as other amenities goes and condition, you could now make an adjustment for the lack of the second bath (for the original sales you used) and then you could make an adjustment for the view which your new 3/1 sale didn't have.

Others suggested something to the fact if they wanted to add a second bath they could but I'm sure you realize that the cost to cure of the new addition is not equal to the return in value for it. Therefore you now have a functional obsolence problem which I hope you related into your report.

Someone else suggested that if the home were in such "poor" shape, that the home would be knocked down and a new one built in it's place that would have two baths. The only reasoning for buying the house was the "view". Don't you then only have LAND VALUE? What lender is going to lend on land value only?

Personally I think you should have done as I suggested in the beginning to go out and find that 3/1 and 3/2 without views (since the 3/1 with a view didn't exist or maybe it did exist but didn't support your sales price). You really needed that one bath comp in my humble opinion. Besides being a functional problem it also falls into the catagory of being a desire and appeal problem.

Quick question, had your subject been a 2/2 would you have tried to find a comp with only 2 bedrooms or would you have just used 3/2 and 4/2 comps?


Bill Baughn

 

[Lee SW IL]

If you say the view is the predominate feature, make sure you emphize the predominate feature. I assume you took pics of the view
If the view is that important, take pics of the view of the comps as well.
Maybe use a similar room count without the view and take a picture of the non view and explain, explain, explain about the location (view ect).


Your job as an appraiser is to be the eyes and ears for the lender. Meaning you need to describe the property as best as possible.