- Jan 16, 2002
- Professional Status
- Certified Residential Appraiser
I performed an appraisal last week on a new construction townhome. Two current townhome resales approximately 2 yrs. in age in the same subdivision were located. I cited those on the grid, plus another townhome sale in a similar townhome community. The two resales in the subdivision were very similar to the subject in style, possibly the same model, and similar sq.ft.living area. The estimated value came in a little less than $2,000 short of the contract price. There were very few adjustments needed. The builder has asked why I didn't utilize new construction sales which would bring the value up to what he's selling this unit for. I'm sure the appraisal will be appealed/challanged. The lender and builder don't understand why I didn't ignor the resales, use at least one new construction sale, and let it fly at the contract price, leaning on the new construction. I think that closed resales are a better indicator of market conditions. I could add a 4th comp, which would be a closed new construction sale in that subdivision, but it wouldn't change things in my way of thinking? What do you think, and how can I best explain this to them?