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One bedroom -rare in my market

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Jeff Horton

Thread Starter
Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
I have my first one bedroom house to appraise. It's a new-ish house and in good, actually very good shape. Rural location and as in the title, 1 bedroom. I have never seen a one bedroom house in our market. I have not looked yet, but considering our small market I would be amazed to find one sale. If I did it's very doubtful it would be similar.

In our market two bedrooms are harder to sell except in the low end of the market. If I find a low end sale I doubt the difference is going to reflect the Market Reaction for this house.

I am sure there is going to be a market reaction to this, no doubt. It might be in the Market Time more than the price. I am feeling that I just will not have the info to make a call. I hate being in that situation too.
 

Judy Whitehead (Florida)

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Florida
It is rare in most markets (except retiree condos, etc., perhaps) and I can tell you right now that if your lenders are like ours you are going to "suffer" by being the bearer of bad news. We had 2 rural properties where the lender made the owners put in a wall and closet so that we could call it 2 bedrooms - no matter how cheaply done.

After the owners put in the 2nd bedroom (one of them enclosed part of the living room) we had to go back out and reinspect and take pictures. And this was all before the current lousy market conditions. It doesn't take a mental genius to guess that there would be a market reaction. Perhaps your market reaction adjustment (if you don't have paired sales) would be the cost to build another bedroom? Just a thought....

The problem with paired sales in a rural market is the lack of sales. In other words, if you don't have 20-30 sales to compare, how reliable is the data? That what they taught at the last CE I went to....
 

Metamorphic

Senior Member
Joined
Mar 15, 2008
Professional Status
Certified Residential Appraiser
State
California
First thing do some MLS and pub record searching and figure out how big a "neighborhood" you're going to have to define to get a decent size population of small homes. Second, do a long (going far back in time) detailed market analysis so you'll have a dependable basis for adjusting a old sale. By expanding your neighborhood as far as reasonable and going back in time as far as your market data will support, and then documenting this effort with a coherent couple of paragraphs of text, you'll have done due diligence to find the best available comps. Then if you throw in comps to bracket the subject on major adjustments and write a sentance or two about each comp expliaining what its role in the analysis is (Comp 1 represents the most recent comparable sale helping define current market value of homes in this size/price range, Comp 2 is the most recent sale in the subject's immediate vicinity helping define location related value, Comp 3 brackets lower GLA, older actual and effective age, and lower quality and condition, Comp 4 brackets superior age, size, condition..... etc etc).
 

Jeff Horton

Thread Starter
Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
Well, just I suspected there are very few one bedrooms sales and none are comparable. Mostly low end homes where I suspect the buyers motives are different.

I did find one that I included as a forth comp. Across the county with many differences. The biggest being it is 40-50 years old and mine is 2 years old.

I am going to make a functional Adjustment and send it off. Then wait on the phone calls and emails about it. I just not a typical house and they won't like that no doubt. Reminds me why I do so little Mortgage work!
 

Jim Bartley

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Well, just I suspected there are very few one bedrooms sales and none are comparable. Mostly low end homes where I suspect the buyers motives are different.

I did find one that I included as a forth comp. Across the county with many differences. The biggest being it is 40-50 years old and mine is 2 years old.

I am going to make a functional Adjustment and send it off. Then wait on the phone calls and emails about it. I just not a typical house and they won't like that no doubt. Reminds me why I do so little Mortgage work!


How did you arrive at an adjustment? What did you base it on?
 
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