No Comps!

[Frederick R. Ruffell]

This has to be in the top 3 most difficult assignments I have had to date, the other 2 were early in the career and still learning the ropes.
Subject is a 2 on 1 spitting distance from Mexico in San Ysidro. In all of San Ysidro there have been a total of 20 two unit properties sold since 1984. Because this is a 2 on 1 and NOT a Duplex I know that it will compete with SFR properties in the current market. I know it will sell for $300K plus...But I got nothing, and I mean Nothing, for the Sales approach comparables. I did grid out 3 sales and the adjustments exceeded 40%, both ways. Income approach predicated on projected rents and the GRM of the comps used in the sales approach produced a W I D E range, however the average was close to the value I know to be correct. Cost approach... well you know, not really applicable on a 40 year old property but I did my best. Resorted to surveying the agents and they confirmed my conviction.
I guess this is the RISK SEEKER part of the biz. It is a good client and I have talked with the chief appraiser about it and am not too concerned about the value or the report as I know I have covered all the comps available. What would you have done differently? Are we always required to complete the report even if our "opinion" is not supported on paper within the guidelines requested by the client (i.e. FNMA)?

 

[wyecoyote]

Frederick,

Guidelines are just that guidelines. They are not set in stone most of them will even state as long as you explain why you varied from the guidelines you are fine. Some UW may pitch a fit.

The thing that I would do is explain first the sales history of the area that there have been only 20 sales since 1984. (You could even list all of them out so their is no room for arguments) List any current listings which you have probably done allready. Also state that you talked to the local agents in the area list date, time, name, contact number and summarize the content of the conversation. You may even want to put more emphasis in your final reconcilation on the income approach and/or the cost approach.

Like they say explain, explain, explain, disclose, disclose, and disclose.

The one thing I would say is this can anyone out there (in your market area) find "better" comparable sales/listings/pendings than what you allready have.

Just as another thought you may want to add in something like "there are no "better" commparable sales, active listings, and/or pending sales in the market area and/or competing/non competing market areas". Also bold the entire area where you describe what you did and came up with at the very least bold the fine points of it.

You also have talked to their chief review appraiser so tell him that it is coming in and when it is coming in and you would like nothing better than to sit down with him go over the report and show him your workfile. This way you are offering your olive branch and you are showing IMHO that you have nothing to hide.

Just my 0.02 cents for you take it or leave it and I am interested in hearing how others handle this.

Ryan

 

[Frederick R. Ruffell]

Yeah, Thanks Ryan. I guess my point is that from the outside looking in my value is subjective (given the guidelines I agreed to at the acceptance of the assignment) but from the inside looking out I am confident in my conclusion. :yellowblack:

 

[Pamela Crowley (Florida)]

Frederick,

From your posts here, you are a conscientious appraiser and pay attention to details. Sounds to me like you've done your job properly. As Ryan said, "Guidelines are just that guidelines. They are not set in stone most of them will even state as long as you explain why you varied from the guidelines you are fine." Shoot, I've had comps with 100% total gross adjustments a couple times because there really is nothing else to compare the subject to. When it gets that bad, I will also look for anything else existing that is similar to it whether it's been sold or not just to be able to state it's not the only one like it in the area.

It is what it is, I doubt any other appraiser would have done any better. Let us know what the UW had to say. These brain twisters force you to think outside the box and become a better appraiser. If you don't have a copy of "Appraising The Tough Ones", you might want to get a copy. If nothing else, it will make you feel better and give you more confidence.

 

[Phil Rice]

I use this statement in about half of my appraisals:

Adjustments in excess of normal guidelines are indicated by the market.

 

[Non Sequitur]

Hey Fredrick, how's the weather in San Diego? I was born there and have some good friends that live on Sweetwater Rd in Bonita. I'd move back but when you marry a Southern Belle she never wants to leave her home town.

As far as the appraisal, it looks like you're doing a better job than I'd do. The only suggestion I have is to add some listings, if any, that may support final value estimate.

 

[George Hatch]

Frederick,

I've done units in San Ysidro. Give me a call and maybe I can give you a hand on this. You have my number.


George Hatch

 

[Frederick R. Ruffell]

Thanks All,
It is currently overcast and the tuna are moving closer to about 120 miles away, just out of reach for my boat and it's current fuel capacity. I had one pending sale to hang my hat on and I played it Conservative. I have another sale that is just through the roof, I suspect that it was bought for the much larger lot for development. Thanks George I will keep you posted and contact you if need be.