Refrigerators in value

[Atlanta CG]

Often refrigerators are included in resales and are just viewed as personal property. But in new construction I am seeing them added into the prices at cost and obviously the comps include that value as part of the transaction. How do others handle this? If subtracting the value (cost?) from the comp, it brings it below the same subject model being appraised and buyers, particularly first home purchasers, do not care that it is part of the mortgage as they do not have the $2000 to pay for one. All the comps have the fridge and it is hard to separate that value from the transaction without knowing exactly what type (fancy or average) it is.

 

[J Grant]

I would not adjust for it, too small a cost item to matter - I would just note in subject contract it is delivered without a fridge so buyers can pick their own ,

In reconciliation state the purchase price of subject is a small amount below the comps due to subject not conveying a fridge on sale. Remember in our appraisal we are not appraising the subject as a new sale from builder price where buyers add up every item in a running tally cost to reach the CS price, cash register style. We are appraising the house as a finished package - would most resale buyers expect a discount for not having a fridge? I doubt it - they might expect a discount for no appliances, but often a home is conveyed without a washer /dryer or fridge. Sometimes a home is sold with it and buyer repleaces with their own choice anyway. It is a line item cost from builder so it does not necessarily translate to that exact $ amount as a contributory value to the whole in an open market sale./resale (best to add at least one but I like to , if available, use two recently built resale comps in addition to the new house builder sales comps )

 

[Meandering]

Often refrigerators are included in resales and are just viewed as personal property. But in new construction I am seeing them added into the prices at cost and obviously the comps include that value as part of the transaction. How do others handle this? If subtracting the value (cost?) from the comp, it brings it below the same subject model being appraised and buyers, particularly first home purchasers, do not care that it is part of the mortgage as they do not have the $2000 to pay for one. All the comps have the fridge and it is hard to separate that value from the transaction without knowing exactly what type (fancy or average) it is.

If the buyers can't provide their own refrigerator, because they lack $$$

What are they gonna do when they find out their tax bill has been underestimated and their escrow is raised?

How long will they be able to afford the mortgage?

And what will they say, when their attorney points out that refridgerators are not real estate, do not last 30 years, yet the owners are paying 30 years worth of interest on a loan for that refrigerator because it was included in the "value".

Run.

 

[Bobby Bucks]

Meandering…….I just now realized you hadn't left, but joined the fake name subculture, I knew that writing style was somehow familiar.

 

[Terrel L. Shields]

Careful. With these new "Built in" refrigerators, enclosed and attached as they are, they may be considered real property. Try to get a gander at the actual item and how it is installed as well as the pix of the comps fridge. I was at one, with a glass door refrigerator and a matching walk in freezer, both built into the kitchen

 

[Ariba]

Often refrigerators are included in resales and are just viewed as personal property. But in new construction I am seeing them added into the prices at cost and obviously the comps include that value as part of the transaction.

How about all the builder's incentives that are not reported or disclosed. For example lot premium, upgraded carpet, cabinets, flooring, preferred lender discounts, flooring, inventory closeouts, end-of-month discounts, etc. You are worried about a refrigerator?

 

[Overimprovement]

In most markets, refrigerators are typically not considered real estate, which makes them personal property. Like Terrel mentioned, you may have to dig in a little bit. Also, look at contracts for homes in your area. If the appliances are specifically mentioned in the personal property section, then it is not automatically assumed they go with a home.

I would take great care in assigning value to personal property. Better to let it lie, unless its contribution seems significant, and you can defend giving it value.

 

[Meandering]

Meandering…….I just now realized you hadn't left, but joined the fake name subculture, I knew that writing style was somehow familiar.

You can't retire in some places.

 

[glenn walker]

No adjustment-and if they all come with them it's a Zero sum game anyway.

 

[Elliott]

Page 1 has 'refrigerators, range/ovens, dishwashers, disposals, microwaves, washer, dryers, and others.'

High end properties might have built-in refrigerators (a Sub-Zero can set you back $7K), along with 'built-in' washer/dryers, along with 'compactors,' 'warming ovens.' Years ago I did a house owned by a founding partner of oen of Oregon's largest tech companies and it had a device next to the breakfast table, "I asked, "And what does that appliance do?" "Built-in toaster."

If you have ever done a 'typical' REO, you are likely to find all of the built-ins stripped out of the house.

I only count real built-ins. They seldom make any difference to the final value estimate. Keep it simple and consistent.