• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

New construction

Status
Not open for further replies.

Doug Meyer

Thread Starter
Senior Member
Joined
Sep 13, 2003
Professional Status
Certified Residential Appraiser
State
Indiana
Have a new home sale in a newer subdivision. Limited sales that are new and the builder will give sale prices but will not release the HUD 1 statements to verify price and concessions. It does appear that concessions are being made to these low end tract homes but difficult to verify. Would it be better to just disclose the builder will not release the HUD1 or just put "0" in for known concessions are should I make an across the board adjustment for concessions? The home is being sold for $130,000 but with no concessions known on this transaction.
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
Doug,

There is a difference between a concession versus a discount. If the builder is offering "free upgrades", it is important to note its contribution when comparing against the subject as for any market value difference.

If your subject is equal in quality factors (equally upgraded), then the market value is what the comparable sold for with those upgrades. If your subject did not have those upgrades, you will have to bracket the subject with market sales of inferior and superior upgrades to gauge the market value affect.
 

Doug Meyer

Thread Starter
Senior Member
Joined
Sep 13, 2003
Professional Status
Certified Residential Appraiser
State
Indiana
Tough to find out as "builder" is not offering any known free upgrades with these homes.
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
Tough to find out as "builder" is not offering any known free upgrades with these homes.

I would disclose that the builder did not provide the information and if I concluded based on my research that concessions were being provided but didn't have the HUD-1 to document it, I'd make the adjustments anyway and explain my rationale.

Doug- I interpret "across the board" adjustments to mean that the adjustment is applied to all comparables in the sales grid. Does this mean you are unable to use a re-sale for this assignment, or is the across the board adjustment in reference to the same-builder sales only?

Good luck!
 

Doug Meyer

Thread Starter
Senior Member
Joined
Sep 13, 2003
Professional Status
Certified Residential Appraiser
State
Indiana
Dennis the across the board would be for builder sales only. I do have a couple of resolds that I plan to use along with a sale from a competing subdivision. Just trying to cover the bases. Thanks Dennis and Randolph for your inputs!!
 

Tucson Appraisals

Junior Member
Joined
Apr 12, 2007
Professional Status
Certified Residential Appraiser
State
Arizona
Have a new home sale in a newer subdivision. Limited sales that are new and the builder will give sale prices but will not release the HUD 1 statements to verify price and concessions. It does appear that concessions are being made to these low end tract homes but difficult to verify. Would it be better to just disclose the builder will not release the HUD1 or just put "0" in for known concessions are should I make an across the board adjustment for concessions? The home is being sold for $130,000 but with no concessions known on this transaction.

If you cannot verify, then of course you cannot verify....don't use them. A really good way to swim through all the c.rap and make it to the other side is by using re-sales of "newer" homes that would appeal to the same type of buyer. These can be from the same subdivision AND subdivisions close by. Try it, you will see how full of c.rap the builder is!
 

Mike Boyd

Elite Member
Joined
Jan 18, 2002
Professional Status
Retired Appraiser
State
California
Concessions are not typically shown on the HUD-1. If the builder or agent says there were no concessions and there is no advertising or documentation suggesting that they are being offered, why would you think otherwise?. I would type in None known or None disclosed.
 

Michigan CG

Moderator
Staff member
Moderator
Joined
Nov 1, 2006
Professional Status
Certified General Appraiser
State
Michigan
Knock on the doors of the comparable sales and ask them.
 

Doug Meyer

Thread Starter
Senior Member
Joined
Sep 13, 2003
Professional Status
Certified Residential Appraiser
State
Indiana
Mike, I am trying to find any closing costs being paid. Too much funny activity going on with builders in these markets.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks