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How Old Is New?

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TRESinc

Elite Member
Joined
Dec 1, 2011
Professional Status
Licensed Appraiser
State
Ohio
got into a discussion with one of my clients today over something in the FNMA selling guide and was wondering what others would say. the guide states:

Additional Requirements for New (or Recently Converted) Condos, Subdivisions, or PUDS

If the subject property is located in a new (or recently converted) condo, subdivision, or PUD, then it must be compared to other properties in the neighborhood as well as to properties within the subject subdivision or project. This comparison should help demonstrate market acceptance of new developments and the properties within them. The appraiser must select one comparable sale from the subject subdivision or project and one comparable sale from outside the subject subdivision or project. The third comparable sale can be from inside or outside of the subject subdivision or project, provided it is a good indicator of value for the subject property. Two of the sales must be verifiable from reliable data sources, other than the builder. Sales or resales from within the subject subdivision or project are preferable to sales from outside the subdivision or project provided the developer or builder of the subject property is not involved in the transactions.


so the question is - what is new? would 2 years old be considered old? what if the development has houses that are 3 years old? 5 years old? how about if it started 5 years ago but still has new construction happening? what about if it started 8 years ago, original developer went bankrupt, someone recently started building again? like most FNMA things it leaves a lot of room for interpretation.
 

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
AI states an example of new construction as 3 years old. Puds are never built in a day...often over years. I don't think anyone would give a ratzass if you just logically explained your position, whatever it may be. Probably want to stay newer than 50 though ;)
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
I think in this case new means the status of the community in the market...is the sales office still open, or has it only recently closed , then it is new (to the market )
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York

  1. New Residential Construction
    – The category of statistics called "New Residential Construction" consists of data on the five phases of a residential construction project: (1) housing units authorized to be built by a building or zoning permit; (2) housing units authorized to be built, but not yet started; (3) housing units started; (4) housing units under construction; and (5) housing units completed.
  2. Completed Housing – A house is defined as completed when all finished flooring has been installed (or carpeting if used in place of finished flooring). If the building is occupied before all construction is finished, it is classified as completed at the time of occupancy. In privately-owned buildings with two or more housing units, all of the units in the buildings are counted as completed when 50 percent or more of the units are occupied or available for occupancy. Housing completions are estimated for all areas of the United States, regardless of whether permits are required.


    https://www.census.gov/construction/nrc/definitions/index.html
 
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Jim Bartley

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
I would say the project is new until you have some re-sales.
 

bnmappraisal

Elite Member
Gold Supporting Member
Joined
Nov 9, 2011
Professional Status
Certified Residential Appraiser
State
Florida
so the question is - what is new? would 2 years old be considered old? what if the development has houses that are 3 years old? 5 years old? how about if it started 5 years ago but still has new construction happening? what about if it started 8 years ago, original developer went bankrupt, someone recently started building again? like most FNMA things it leaves a lot of room for interpretation.
Good post/thread TRES. (my bold) I think you're right.
I guess to me, it comes down to reasonableness (is that a word?)
 

Noreen

Senior Member
Joined
Feb 5, 2011
Professional Status
Certified Residential Appraiser
State
New Hampshire
AND....its selling below value.... AND....there are multiple offers on it!

I had this same go around with a MA broker ( I'm from MA, live in NH , just over the line) last week, through the lender. I played "dumb, I knew she was full of it, I told her to submit copies of the four offers, sales comps she though I overlooked and I would be happy to review my data. She couldn't, surprise, surprise...do they think we are stupid??
 
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