Is It Okay To Compare Two Detached Units With Two Attached Units?

[bororke]

I am an UW and sometimes I see attached duplexes being compared to 2 on a lot. I realize that sometimes this is what is required due to limited sales but what should I be looking for in the report when this is being done? Any tips you can give an UW?

 

[Meandering]

I am an UW and sometimes I see attached duplexes being compared to 2 on a lot. I realize that sometimes this is what is required due to limited sales but what should I be looking for in the report when this is being done? Any tips you can give an UW?

Two houses on one lot, one deed one tax parcel, live together forever.

Two sides of a duplex, different tax parcles, do not live together forever, unless there is some mandatory assemblage in the zoning district. Hence,one side can be sold seperate of the otherside, which, is not the same as two houses on one lot - so, there should be a market difference in the Sales Comparison Approach, but might not be a market difference in the Income Approach, (provided both sides, or both houses are the same size/age/condition, yada, yada) but the Cost Approach should be higher for two houses, than for a duplex, if both homes added together have the same GLA as the duplex.

So, it depends on the market, it depends on the properties, it depends on the zoning, and it depends on how many approaches to value are being developed and reconciled. Also it depends on market rents in the area, and an understanding if market rents are moving in the same direction as sale prices, or in an opposite direction of sale prices.

So to summarize, it just depends.

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[AMF13]

I do it all the time in my markets. There's usually not a lot of 2 - 4 unit comps, so whatever there is I use. I see no difference between attached or detached, a far as market value.

 

[nstanbru]

Two sides of a duplex, different tax parcles,

Not in my area as residential income property. One parcel with 2 attached to each other is the norm.

 

[Ken Masla]

In my area, detached duplexes are significantly superior in marketability. You can rent them out almost as an SFR with their own yards, parking, garage, etc.

They are absolutely different in marketability.

 

[reviewbe]

Duplex here means two units on one lot, not salable independently. The situation Mr. Rhodes noted above would probably not be a suitable comparable sale, since it involves bulk sale of two independent properties, rather than two units on one. Or a MIL unit, which may not truly be an income property.

For one thing, I'd look at the rents. If the detached bring a different rent than attached, and the appraiser mixes and matches (may be appropriate if a dearth of sales) then the difference in desirability and income should be addressed in the report.

 

[Noreen]

I am an UW and sometimes I see attached duplexes being compared to 2 on a lot. I realize that sometimes this is what is required due to limited sales but what should I be looking for in the report when this is being done? Any tips you can give an UW?

In my market area ( No MA, So NH) we have state Code 109's ( two structures on one unsubdividable lot). Must stay bundled and are sold on one deed, as one transfer. So your requirements of zoning, "highest & best use, legally permissible " does come into play.

 

[AMF13]

The best ones are 4 little houses on 1 lot, all built different years, use code quadruplex.

 

[miktay]

They are very different in my market. The appraiser should do whatever possible to include at least one similar design property within the report. They can go back in time or further in distance to include a similar sale.

 

[leelansford]

I am an UW and sometimes I see attached duplexes being compared to 2 on a lot. I realize that sometimes this is what is required due to limited sales but what should I be looking for in the report when this is being done? Any tips you can give an UW?

If each property has the same H&B use as improved and one is a market substitute for the other--yes, why not? My GUESS is that more than a few appraisers may not have certainty that one is in fact a market substitute for the other and forge ahead (as complexities are frequently not handled well).