Inground pools?

[MARKETVALUENOW]

I just got off the phone with a client who's UW requested me to remove a an adjustment for an inground pool. They specifically stated that "pool adjustments are not allowed in Michigan" I have not ever heard of such a thing.

The subject is a high-end home. I would believe that potential buyers would not be scared off by the minimal maintenance costs associated with a pool, as compared to the cost of the home.

Am I wrong for including an adjustment?

I can understand that it may not be a benefit in a small, more inexpensive homes where the buyer may not want to, or can't afford to maintain the pool, but I would estimate that the owner or potential buyer of the subject would not blink at the cost of maintenance.

The house also has lighted tennis courts, a basketball court, and a lot of acreage, which all require yearly maintenance as well, but they did not ask me to remove any of those adjustments?

How should I proceed.

 

[larryrebecca]

Pool

Hum? Michigan rule? In Texas I make the adjustment, high end house, $15,000 and up depending on house. I just did a high end house that had a $280,000 pool, I made the adjustment to the comps that didn't have as good of pool even. I've never heard of rule not allowing a pool adjustment. I don't make adjustments for an above ground pool that isn't attached? but in ground gunite? hum? interesting.

 

[Michigander]

Try finding paired sales data if at all possible. I had one about 5 years ago in a value range of $500,000 to $700,000 neighborhood (acre lots) with the houses with pools selling between $15,000 - $20,000 above the ones without, with the remainder of adjustments being generally neutral. You just have to include your research with the appraisal in this instance in order to allay the fears of the underwriter, but they can't dictate what you adjust for and them not being "allowable in Michigan" is utter rubbish.

One thing I would really like to do one day is send a survey to some recent home buyers who bought houses with pools and ask them what they felt they paid extra (or less) for the property due to that feature. Since the buyers are the ones in the market and paying (or not paying) for a feature, it would be great to have their input. Haven't done this though, just thought about it.

 

[Thomas Fiehler]

I had the same request a few years ago from a lender out of Cleveland. I refused but told them that I would call the State and touch base with them. After a call to them, and the lady at the State laughing at the stupid request, she said "If its there and has value then it MUST be included". WHen I relayed the message to the UW, along with the name of the lady at the state, she said that all the other appraisers must be wrong. To that I agreed!

 

[stefan olafson]

There is probably value and it should be included, but where are you pulling your numbers from?

That is what is getting appraisers in general in a lot of trouble. The justification for the adjustment is proper, but the methodology of arriving at that adjustment is just plain wrong. What an appraiser adjusts for pools in Texas, Florida, North Dakota, or anywhere has nothing at all to do with proper adjustments in Michigan.

Paired sales, hopefull with and without pools is your best bet. Having none of those paired sales with unique amenities such as riding stables, tennis courts, etc should give you an idea of value versus cost.

Good luck and go get em.

 

[Michigan CG]

They specifically stated that "pool adjustments are not allowed in Michigan"

According to who?

 

[MARKETVALUENOW]

I guess the almighty UW strikes again. Where do they come up with this #$%^?

You'd think I would be used to it by now, but it still shocks me when they come up with these rules that do not exist and try to make me adhere to them.

Talk about a pain in the butt!!!!!!!!!!!!!!!!!!

Thanks for all your help. I am gonna stick with it and give them paired-sales to prove it.

 

[laynelucia]

Matched Pairs, plane and simple, for everything

 

[Charley Horse]

Matched Pairs, plain and simple, for everything

So very true!

I can recall in the seventies, Dearborn Heights… (north of Ford, west of Beech Daly)… in-ground pools actually diminished property values… consensus of Realtors (at that time) was the market was concerned w/“liability issues”… I no longer know that specific market… BUT, currently in the market I work, I can’t find any contributory value… I suspect it has something to do seasonality and who wants to swim in an in-ground pool when you have Grand Traverse Bay, Torch/Elk Lake to frolic in during summer months… same goes for tennis courts in higher end properties… no contributory value that justifies an adjustment… I do know several appraisers in my area that do make adjustments and use a percentage (PIOA) of the cost for an adjustment.

Several condominium developments in our market have pools… it appears given my analysis, HOA fees typically average 50% + higher for maintenance fees/liability insurance… consequently (or so it appears), I haven’t derived any contributory value in that market either.

However… in Florida (Cape Coral), I’ve seen appraisals whereby they adjust nearly 100% of cost… obviously... a different market than Michigan

 

[Wolverinefan]

I never heard of such a rule....who is feeding you this line of bull?