New condition property with damaged flooring "as is."

[George Hatch]

Again, the comparison we were making doesn't involve someone who already owns the property making a repair or improvement.

The comparison is between a buyer faced with two alternatives for a purchase, and what effect the physical condition would have on their choices.

 

[alebrewer]

Again, the comparison we were making doesn't involve someone who already owns the property making a repair or improvement.

The comparison is between a buyer faced with two alternatives for a purchase, and what effect the physical condition would have on their choices.

Still not following how the CTC would be different for someone who already owns a home and someone who is considering purchasing a home? Unless you're drawing a distinction between OO buyers vs. investment buyers?

Also - still no offering of a solution to the OP's original question... I should have the same opportunity to shoot yours down as you have mine...

 

[George Hatch]

Most of these were extreme cases of trashed out houses here. The risk was high, it isn't a few boards on the floor and some tiles sized jobs. Yes, they made an EP, but the scope of the repairs were in the tens of thousands of dollars, not a few hundred bucks and some flooring from Lowes

All RE is local. In my region at least 80% of the "before" purchases involve homes that are still in serviceable condition, not trashed out. In some market segments its 100% of them. Regardless, there's enough of a spread in pricing between the before and after that the contractors are making a good living at buying at the lower price, fronting the labor and materials to remodel, and re-selling at the higher price. Some of that gets attributed to the contractor overhead position, but in all other construction work the contractor overhead usually doesn't amount to more than 15% of the total (10% is more common), and the margins between cost vs profit usually far exceeds that 15%.

 

[Terrel L. Shields]

we're not capable of swimming? Sorry - I just don't follow the analogy...

Fannie Mae treats their appraisers like rubbish and data mines their work. Watch the end of the vid and you get an idea what I think of them.

 

[alebrewer]

All RE is local. In my region at least 80% of the "before" purchases involve homes that are still in serviceable condition, not trashed out. In some market segments its 100% of them. Regardless, there's enough of a spread in pricing between the before and after that the contractors are making a good living at buying at the lower price, fronting the labor and materials to remodel, and re-selling at the higher price. Some of that gets attributed to the contractor overhead position, but in all other construction work the contractor overhead usually doesn't amount to more than 15% of the total (10% is more common), and the margins between cost vs profit usually far exceeds that 15%.

Your following the wrong track, George. Nowhere in the OP's post was there mention of buying a property to flip it, or that the property was 'trashed out'. Per the post, the property had actually already been rehabbed (meaning that it was most likely being purchased by an OO), and that the only thing that remained was the broken tile flooring. How in the world could you estimate EI for repairing tile flooring?

 

[George Hatch]

Still not following how the CTC would be different for someone who already owns a home and someone who is considering purchasing a home? Unless you're drawing a distinction between OO buyers vs. investment buyers?

Also - still no offering of a solution to the OP's original question... I should have the same opportunity to shoot yours down as you have mine...

We're appraising. The definition of MV includes the explicit assumption of the hypothetical sale and buyers/sellers. The choice one of these buyers is facing is the before vs after. We're not talking about people making home improvements over the next 5 years. We're talking about what a buyer's expectations are with the *acquisition* pricing when their intent is to have the finished product.

 

[alebrewer]

Fannie Mae treats their appraisers like rubbish and data mines their work. Watch the end of the vid and you get an idea what I think of them.

Isn't it interesting, though, how many CG's and MIA's flock to the residential world when commercial work is slow?....

 

[alebrewer]

We're appraising. The definition of MV includes the explicit assumption of the hypothetical sale and buyers/sellers. The choice one of these buyers is facing is the before vs after. We're not talking about people making home improvements over the next 5 years. We're talking about what a buyer's expectations are with the *acquisition* pricing when their intent is to have the finished product.

and..... still..... no...... offering..... of.... a..... solution..... to..... the..... OP's..... original.... question.....

 

[CANative]

Urban appraiser problem. These types of issues/adjustments stand out like a sore thumb and need a lot of explanation (sometimes I look up costs of things from retailers on the net and take a screen shot for the file.)

In rural areas where there is no conformity and no good comps, the adjustment just sort of melts away in the noise.

 

[alebrewer]

Urban appraiser problem. These types of issues/adjustments stand out like a sore thumb and need a lot of explanation (sometimes I look up costs of things from retailers on the net and take a screen shot for the file.)

In rural areas where there is no conformity and no good comps, the adjustment just sort of melts away in the noise.

MUCH, MUCH easier to appraise where there is a ton of data... Remember when we were asked to submit sample reports for inclusion on a panel? I'd never submit a rural appraisal.