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Need a quote

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Joined
Mar 19, 2002
Professional Status
Certified General Appraiser
State
Illinois
I'm valuing three units in a condominium building. There used to be a statement on standard 10 which addressed the valuation of multiple units, but that statement was retired. I'd like to include a quote and page number for the report I'm currently working on.

Basically it stated that when valuing five units or more, the sum of retail values does not represent the market value of the whole property.

Can anyone provide a USPAP quote (and page number) if one exists which addresses the point at which discounting multiple units should occur?

I did try the search function, but was unsuccessful, thanks for any responses.
 
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Montana
SR1-4 (e)

e)
When analyzing the assemblage of the various estates or component parts of a property, an appraiser must analyze the effect on value, if any, of the assemblage. An appraiser must refrain from valuing the whole solely by adding together the individual values of the various estates or component parts.
Comment: Although the value of the whole may be equal to the sum of the separate estates or parts, it also may be greater than or less than the sum of such estates or parts. Therefore, the value of the whole must be tested by reference to appropriate data and supported by an appropriate analysis of such data.

A similar procedure must be followed when the value of the whole has been established and the appraiser seeks to value a part. The value of any such part must be tested by reference to appropriate data and supported by an appropriate analysis of such data.

Unless I misunderstood the question.

Regards,

Doug
 
Joined
Mar 19, 2002
Professional Status
Certified General Appraiser
State
Illinois
Doug,

Thanks for the quote, but I'm wondering if there is anything specific to the exact number of units for me to quote. Earlier in the year, we discounted something that was 4 units, and the reviewer came back and said no discounting is required.

If there is nothing specific to the number of units so be it, but if its out there, we might save some phone calls later.
 

Mike Boyd

Elite Member
Joined
Jan 18, 2002
Professional Status
Retired Appraiser
State
California
If each of the condominium units is on a separate deed, I might not discount them in a normal market. In a very slow market where condos do not sell well and if you have been instructed to value them all together as one property, then I would use similar sized 3 unit properties.
 

PL1957

Senior Member
Joined
Jul 19, 2004
Professional Status
Certified General Appraiser
State
Illinois
Doug,

Thanks for the quote, but I'm wondering if there is anything specific to the exact number of units for me to quote. Earlier in the year, we discounted something that was 4 units, and the reviewer came back and said no discounting is required.

If there is nothing specific to the number of units so be it, but if its out there, we might save some phone calls later.
I think the citation you are looking for is FIRREA specific. I also think the magic number of units is 5.
 

Don Clark

Elite Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Here is the link to FIRREA.

http://www.appraisalfoundation.org/s_appraisal/bin.asp?CID=20&DID=197&DOC=FILE.PDF

Certified Residential Real Estate Appraisers can appraiser 1-4 units. 5 or more require the services of a CG as 5 or more are considered commercial. I am referring to individual parcels, properties, condo units, duples, 3plex, 4plex. i am not referring to units or percentages of ownership in a single property.
 

The Warrior Monk

Moderator
Staff member
Moderator
Joined
Mar 30, 2005
Professional Status
Certified General Appraiser
State
New York
SOW is important here. The number "5" is simply an arbitrary number. If there is no demand for condo units, and 3 are put on the market at the same time, that is relevant to the assignment.
 
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