New Construction, No Landscaping

[Mark K]

Common occurance around here this time of year. I don't change the report and address it in the final inspection addendum.

Verbiage similar to : "Subject is complete per plans and specs provided to appraiser except the final grade/seed and straw (or sod). Weather does not permit planting grass and estimated cost for final grade/seed/straw/sod is $2,500 (or whatever is appropriate)."

Lender escrows usually 150% of my estimate until complete. Sometimes they send me to inspect for completion next spring (inspect fee) and other times they accept the buyer signing off on completion and release funds to builder.

 

[Walter Kirk]

Thomas,
I have never seen a mortgage lender who would lend on new construction without landscaping. Your approach would be correct if there were a large enough number of sales without landscaping to establish an adjustment but in my experience there aren't any.

 

[deturner]

Wow, for some reason, I wasn't notified of any replies to this topic.

I'm thinking more along the lines of "subject to" seeding the yard. Shrubs were on site at the time of the inspection but not installed.

I'm going to contact the lender to see which one they prefer. I'll give them the choice of "as is" or "subject to" and let them make the call.

Dave in NC

 

[Farm Gal]

Dave I think you have the best solution...

Let the cleint drive the bus, that way if they wreck, you can point out who was the loose nut behind the wheel prior to the accident.

~~~~~~~~~~

FWIW I have seen a limited few high end homes and moderate value ones where the seeding either never happened or was let die in place. Dunno the reason why But in each case the homes took a huge hit at resale despite the fact that no specific 'other faults' with the improvements were present.

A truely unkempt yard is a huge detriment to resale, but YOUR job is to value as is (or maybe subejct to) ...

Interestingly I have seen many newer homes with unseeded lawns not take much of a hit.... It is when SOME is there or NONE is there a few years later that the real hurt to value seems to occur go figure?

 

[deturner]

UPDATE:

Spoke to the LO today and she wants me to hold off on delivery until they get some grass seed down. If it dies, so be it. The funding will not go through unless the seed/straw is in place.


Their call.

Can we say "Extra Fee to take new picture?" I thought you could.

Dave in NC

 

[Mike Garrett RAA]

Our builders issue a "sod certificate". You can't put down sod when it's below freezing. My reports for new construction state...."landscaping to be installed weather permitting". A few lenders will ask me for a final inspection but most don't.

What kind of area do you live in where landscaping makes no contribution to value? I think that statement is overly simplistic and unrealistic. Not long ago I appraised a home where the home owner spent over $20,000 for landscaping. Tell him it adds no value.

What I typically see is a market perception of from $3,000 to $5,000 for lack of landscaping IF most of the homes in the area are nicely landscaped. Unfortunately we have been experiencing the worst drought in 100 years here in Colorado Springs. For that reason many people have let their lawns go to pot.

 

[Steve Owen]

Mike, I think you are correct, but I also believe this might be very local. In some segments of my market, the landscaping would make very little difference - in fact there is one subdivision where the natural woods have been left intact and an ordinary lawn might actually harm the value. For most of my area, however, the landscaping is quite typical and this conformity creates a certain degree of value.

I am often asked whether the landscaping the ho has done will increase their value. My stock reply is "No. The market expects the property to be landscaped, so it will not increase your value; but, if you had not done it, it would probably hurt your value."

It is interesting that you gave specific numbers. I find those numbers to be fairly well consistent with my own market for a certain segment of homes in the over $150k to $300k territory. However, for lower value homes, I think the lawn contributes much less, and for higher value homes it can be much higher - especially if there are amenities such as inground sprinklers.

It is interesting to me that landscapping, when done to the extreme, quickly becomes a super-adequacy, in my market it almost never returns the full expenditure in value. The market here has an expectation of what the landscape will be - anything more is something just done because you want to and not because you expect to get the money back. Anything less will detract from overall value.