MH appraising for more than it sold 8mos ago

[c w d]

The subject is a dblw mh and was on the market for 380 days for $64,000 and sold for $60,000. 2 comparables in the area appear to be very similar models due to their style and sizes. Site sizes are typically .25 acres in this area as they are for the subject and two of the comparable. The third comparable is a little smaller, 10 years older and a singlewide. The comparables look as if they are going to adjust and indicate a value of approx. $75,000. The area appears to be stable at present from previous declines during late 2006 & 2007.

Personally, I don't have a problem appraising a home for higher than it sold less than a year ago. But, I'm thinking how I could explain this to the reader. The market conditions don't support it and the fact that it was on the market for 380 days doesn't support the higher value. The difference from sale price to opinion of value is a 20% increase. I can't exactly say it's an acceptable variance. I don't want to say it's the luck of the draw. But that's exactly what it appears to be.

Suggestions?

 

[Wendy]

Need a bit more.....

Have already checked and made sure there was not reason for the prior long market time like reluctant sellers, crazy neighbors, or maint. issues?

When you say "market conditions don't support it" do you have any comparable actives or pendings that are for a price lower than $75?

 

[Randolph Kinney]

How recent are your comparables? What are your listings or pendings telling you?

 

[CANative]

Could be: Owner occupants forced out of the SFR type properties and needing something more affordable. They turned their noses up at propeties like the subject 8 months ago but now they're taking a second look.

Could be: Investors who want an income that covers debt load for a few years and then they will have a nice lot to build on when the market comes back.

 

[Mztk1]

If after you check into what Wendy and Randy said and consider Greg's point and you still can't iron out the problem, I'd look at it from a seasonal point of view. In Florida the Fall and winter are slow, slow, slow, and now it is the busier spring/summer market. Go into your MLS and search for sales from September through February and hit your statistics button. That should give you the average price, average sale price per square foot, median value for the location during that period. Then do the same thing from March through the effective date of the appraisal, and also include the actives and listings in that search. That will show you market changes between the two periods and by looking at the average list price, the LP:SP ratio of both the listings and the pendings, you can see if this change from March is likely to continue for the next month or so.

 

[Mike Boyd]

What did the comps sell for?

 

[J L H]

Does the FIRST sale make sense?

Was the first sale a "normal" sale? There are numerous reasons why the first sale might be suspect. Look at marketing time, indications of a quick sale, seller duress, arms length/family/estate factors, wannabe "investor" bailing out of a rental property, etc.

You're selecting valid comps TODAY to establish a value for TODAY. Would the subject sale eight months ago stand the "valid comp" test today?

 

[c w d]

I just noticed on the MLS listing for the subject a comment "Owner financing with $10,000 down to qualified buyer". I'm guessing it's a concession? Cash equivalence to the seller is $50,000. I've got a call into the Realtor.

The comparables sold for $75,000 back in October, and $69,900 and $65,200 both in April. The subject also sold in October. The $69,900 sale is a singlewide. I've driven by these comparables and with the exception of a screened porch they are pretty much the same as the subject, between 8 and 12 years old (the subject is 9yo), all within 100SQFT of the subject, all lots slightly smaller than the subject and all within half a mile. I have two other comps that I looked at but they sold for $55,000 and $82,500, approx. same size as subject, lots a little bit smaller and larger than the subject but not in it's immediate subdivision.

Now how am I going to explain how I'm appraising this for more than it sold for in a declining/stable market when it really sold for $50,000 cash equiv? m2:
It's gotta be variance. Gotta, I don't know how else to explain. Maybe the Realtor can shed some light. Right.

I misspoke about what the comps were looking like they would adjust to in my op. That's another MH I viewed on the same day 30 miles further south than the subject and that is my next appraisal to do.

 

[robert higgins]

Yes CWD it looks to appear to be an underlining affect on the subject sales price.

You stated it has been on the market for 380 days, is that typical for MH properties? If so, there maybe a negative market reaction to MH’s.

You stated in the heading it sold 8 months ago, what was the sales price then, and why is it on the market for over a year? Was the sales price 8 months ago supported by sales back then?

What was the listing history on it? Has the list price decline over time; is it a quick sale now? This goes back to Q #1.

 

[c w d]

Typical market timing in the area is 3 - 6 months. Why it was on the market for 380 days I don't know. The place looks fine. Average condition for the area. There isn't a negative reaction MH's because they are the predominant type of dwelling for the area. Original list price is $64,900. Sold for $60,000. The current owner has both titles (1 for each section) and RP certificates. I asked the owner if she had done anything to the property. She said no. Well, with the exception of a 8x9' wood deck in the rear.