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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