Model lease back

[berad]

The Subject is a builder's model for a newly developing subdivision. At closing the buyer is doing a lease back to the builder for 18 months in order to use for sales and marketing. The 3-car garage has been built out into office space. I did the report subject to the office space being converted to a garage. The lender has contacted me with the following "Appraiser made Subject to garage being restored. This is a model lease back and garage is to remain builders offices during the lease back. Please have Appraiser correct". However, this is not typical for the area. Needless to say there are no other sales with converted garages to office space in the area and I'm not real sure how I would adjust for something like this if at all? The builder has stated that they're paying for the garage to be converted at the end of the lease. Any suggestions?

 

[Mark K]

It sounds like the lender is aware of the sale/leaseback and is keeping the loan in-house. If this is the case, I wouldn't make it subject-to. You could estimate a cost-to-cure to install garage doors and adjust accordingly or simply note it in the report and move on.

 

[glenn walker]

No big deal, "AS IS " it will be converted back when its sale closes . it doesnt change value its a interment use.

 

[berad]

Thanks you!

 

[J Grant]

The Subject is a builder's model for a newly developing subdivision. At closing the buyer is doing a lease back to the builder for 18 months in order to use for sales and marketing. The 3-car garage has been built out into office space. I did the report subject to the office space being converted to a garage. The lender has contacted me with the following "Appraiser made Subject to garage being restored. This is a model lease back and garage is to remain builders offices during the lease back. Please have Appraiser correct". However, this is not typical for the area. Needless to say there are no other sales with converted garages to office space in the area and I'm not real sure how I would adjust for something like this if at all? The builder has stated that they're paying for the garage to be converted at the end of the lease. Any suggestions?

We can not and should nor force people to make changes to their property is not typical for the area. Nor should we do it just because it is hard to find comps

You don't have to find sales where a garage was converted to an office, just find similar comp sale to bracket ( if it is out there ) without a garage .The adjustment for lack of garage can be depreciated cost or found by comparing other garage vs non garage house sales and extract the difference for an adjustment

 

[glenn walker]

We can not and should nor force people to make changes to their property is not typical for the area. Nor should we do it just because it is hard to find comps

You don't have to find sales where a garage was converted to an office, just find similar comp sale to bracket ( if it is out there ) without a garage .The adjustment for lack of garage can be depreciated cost or found by comparing other garage vs non garage house sales and extract the difference for an adjustment

All the Builders in my area use the models three car garages as sales offices, they are designed with easly removed glass sliding doors. The doors can be removed and garage and over head garage doors installed in less than three hours , then carpets removed and now you have a fully functional garage, Costs to Cure $3,000 and its all done. No Need to make a federal case out of this, no need to find a comp as there is none and its stupid , the people that are going to live in it know what they are dealing with. This is a good way to lose a Client . Just use some good old fashioned common sense , its a brand new home with a $3,000 cost to reconvert to a functional garage. LMAO