upstatesc
Freshman Member
- Joined
- Aug 9, 2012
- Professional Status
- General Public
- State
- South Carolina
I have some questions I'm hoping some of you can shed light on. I recently applied for a USDA loan and have run into a very low appraisal on the property I was going to purchase that I strongly feel doesn't accurately reflect the market values of our area.
The property in question is a 2,430 square foot modern ranch home completed in 2007. (For the record that is the appraiser's sq footage, the Realtor actually had it at 2380 so I trust that part as being accurate) It is situated on a lot of .81 acres with a sales contract price of $190,000.
The appraiser who is from another neighboring county roughly 45 minutes away used four comps, all from a two mile radius in his report. Selling price would be $190,000, or $78.19 per square foot based on the appraisal report. The appraiser valued the property at $175,000 with a Q3 quality rating.
Comp #1 was a 2342 square foot short sale house almost identical to the one I am buying, just slightly smaller. It sold for $154,000 in October of 2011. Age is the same as well with a Q3 rating.
Comp #2 was an eight year old 1829 square foot foreclosure that a listing realtor purchased themselves in October of last year for $132,000. The appraiser had total adjustments of +$33,045 on this comp for a Net adjustment of 25% and a gross adjustment of 27.3%. This comp was rated a Q4.
Comp #3 was a recent sale of a 12 year old 1,620 square foot home that sold for $136,000 in the same neighborhood. He adjusted this comp +40,256 for a net adjustment of 29.6% and a gross adjustment of 50.5%. The sale price of this home was $83.95 per sq foot based on his calculations. This comp was also rated a Q4.
Comp #4 was a 20 year old just sold 1,621 square foot home in an older but similar neighborhood less than 1/2 mile away. He adjusted this comp +29,905 for a net adjustment of 17.6% and gross adjustment of 33.5%. The selling price of this home was $170,000 or $104.87 per square foot. He also rated this comp a Q4.
All four comps were similar in composition- 3 bedrooms, 2 baths, and all but one had 7 total rooms (Comp #3 had 8 total rooms)
All four houses are on comparable lots and no adjustments were made for location. All of the adjustments were for square footage, age, and things like fencing and security systems. All had garages, driveways, and other similar features.
The appraiser did not disclose in his report that Comp's #1 & #2 represented a short sale and foreclosure.
I'm curious what the input from the forum would be on this choice of comps. We're located in a small town with a very limited market. There are no active comparable listings on the market (by the appraiser's own admission in his report), and in most cases appraisals in this area will use additional comps from the neighboring city (7 miles away) since we are located in the same county and are part of the same school district, etc. Where we are is considered more desirable because most feel the smaller schools here are better.
If you were the appraiser in this question would you not consider comps from the neighboring town given that you are in the same county, same school district if you could find an ample supply of houses there equal in size, quality, and age with which to compare the current property?
The property in question is a 2,430 square foot modern ranch home completed in 2007. (For the record that is the appraiser's sq footage, the Realtor actually had it at 2380 so I trust that part as being accurate) It is situated on a lot of .81 acres with a sales contract price of $190,000.
The appraiser who is from another neighboring county roughly 45 minutes away used four comps, all from a two mile radius in his report. Selling price would be $190,000, or $78.19 per square foot based on the appraisal report. The appraiser valued the property at $175,000 with a Q3 quality rating.
Comp #1 was a 2342 square foot short sale house almost identical to the one I am buying, just slightly smaller. It sold for $154,000 in October of 2011. Age is the same as well with a Q3 rating.
Comp #2 was an eight year old 1829 square foot foreclosure that a listing realtor purchased themselves in October of last year for $132,000. The appraiser had total adjustments of +$33,045 on this comp for a Net adjustment of 25% and a gross adjustment of 27.3%. This comp was rated a Q4.
Comp #3 was a recent sale of a 12 year old 1,620 square foot home that sold for $136,000 in the same neighborhood. He adjusted this comp +40,256 for a net adjustment of 29.6% and a gross adjustment of 50.5%. The sale price of this home was $83.95 per sq foot based on his calculations. This comp was also rated a Q4.
Comp #4 was a 20 year old just sold 1,621 square foot home in an older but similar neighborhood less than 1/2 mile away. He adjusted this comp +29,905 for a net adjustment of 17.6% and gross adjustment of 33.5%. The selling price of this home was $170,000 or $104.87 per square foot. He also rated this comp a Q4.
All four comps were similar in composition- 3 bedrooms, 2 baths, and all but one had 7 total rooms (Comp #3 had 8 total rooms)
All four houses are on comparable lots and no adjustments were made for location. All of the adjustments were for square footage, age, and things like fencing and security systems. All had garages, driveways, and other similar features.
The appraiser did not disclose in his report that Comp's #1 & #2 represented a short sale and foreclosure.
I'm curious what the input from the forum would be on this choice of comps. We're located in a small town with a very limited market. There are no active comparable listings on the market (by the appraiser's own admission in his report), and in most cases appraisals in this area will use additional comps from the neighboring city (7 miles away) since we are located in the same county and are part of the same school district, etc. Where we are is considered more desirable because most feel the smaller schools here are better.
If you were the appraiser in this question would you not consider comps from the neighboring town given that you are in the same county, same school district if you could find an ample supply of houses there equal in size, quality, and age with which to compare the current property?
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