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New construction - Overbuilt

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Lee SW IL

Thread Starter
Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
Received a request from an AMC for a 2055/Int on a custom built new construction.

Subject is located in a rural area between towns that have a population of 1300 and 1000. Typical value of homes in these two bedroom communities are for re sale homes-$85,000, new construction $140,000 $160,000. County has very few sales over $200,000. This home is assessed for $478,000.

Since no comparable sales are available. In my opinion the cost approach and assessed value would be the best indicators of value.

Checked with the county they said they have a "few" number of homes assessed over $400,000 in the entire county.

I m pretty sure Im going to turn this one down based on my limited experience of dealing with an overbuilt house.

But I'm curious on how you experts handle homes like this in other areas.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Carefully and NOT on a 2055!

It *may* be a regional home for your area, requiring a very VERY wide marketing area search.

It may be a white elephant with significant functional depreciation (superadequacy) despite it's barely or unfinished construction date.

In my, and many other, markets where land is readily available, folks with top 1-5% values kind of money often prefer to build themselves a new house to personal specifications, rather than buy someone else's taste, oddities or (perceived) mistakes! Those assessed values homes may have never sold 8O

Look to your market adn personal interviews with lots of folks isn't out of order to make sure you know what you THINK you know :p

Significant research is probably required. Make sure if you accept the assignment you charge accordingly, and yup, getting a mentor or paying for someone to oversee the process is probably in order!
 

wyecoyote

Senior Member
Joined
Jan 15, 2002
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Washington
oh no a white elephant not one of those. You may want to conisder doing this as a narrative not on any forms. Myself and my mentor did this on a 6,000 SF house once that was the largest in the county and surrounding 3 counties. Did not do this as a form report but as a narrative. Would recomend you ally yourself with another appraiser familar with naratives and white elephants. This was great experince for me.

Ryan
 
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