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Run down home

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Jeff Horton

Thread Starter
Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
I have one really run down house I am appraising. I can not find a single sale that is comparable to this home. I guessed as much when I got to the house. Several old cars in the yard. No doors inside, just curtains. Close to 2000 sf too.

I have found some older comps but nothing that I am comfortable with. I am thinking my only option is to use average condition homes and make very large adjustments. Adjustments are going to be totally out of line with the standards.

I don't really see any other option. Not sure what I am asking. It's Friday and I tired. Guess i just needed to complain a moment. Creative ideas are welcome though.
 

rtubbs

Junior Member
Joined
Jan 15, 2002
Well, Jeff, the ways I sees it is: if the property is so run down, it ain't a gonna fly anyhow. don't fret the standards; adjust as you sees fit. Have a great weekend.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
You are tired, put it aside and have a good night sleep. When you get up tommorow, the answer will hit you like a good eight cup coffee buzzz. :mrgreen:
 

Larry Lyke

Senior Member
Joined
Feb 2, 2002
Jeff --

Remember the subject is average and the comps are all good -- with above average adjustments!

The lender ain't gonna make the loan, so it doesn't matter.

If you don't want the fee, you can just call the lender and tell them to forget it. USPooP will forgive you if you are stealing the baby's milk money.
 

airphoto

Senior Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Pennsylvania
Sometimes referred to merely as "The PAP."
 

Lee in L.A.

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
If there's no run down comps, you'll have to make an across the board adjustment for a cost to cure and bring it up to average at least.

Happy explaining. :)
 

jt

Freshman Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Pennsylvania
Jeff, after you make your adjustments with the sales you have, what value are you coming up with in relationship to the value of the land, as vacant? If these two numbers are close, demolition of the structure may be warranted. The value of the land + land improvements, less the cost to raze the dwelling($4/sf-$5/sf for a typical wood frame dwelling in my area) = the current market value of the total property.
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
Jeff

Fridays do that to us all.

I would suggest that if you cannot find a similar sale, you use the best you have available and note the lack of normal maintenance as an adjustment in the sales grid. This adjustment is one that reflects the excess physical adjustment you used in the Cost Approach. Just explain that the house suffers from neglected normal repairs and maintenance which has the effect of increasing the effective age beyond normal and that this excess neglect was not found in any of the similar market sales. Therefore, since this is not a normal market condition, it was necessary to include this excess neglect as an adjustment in the sales grid.

Bingo!

Like someone said, this bird will probibly not fly for a loan but that does not mean you don't have to do your job right.

Hope the weekend is restful for you.

Regards
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Just a suggestion, but you might look at REO properties for comps if you have any in your area. Look at their condition and the amount of repairs and compare them to average homes of similar size. This should give you an idea of the value loss for homes needing a significant amount of work. You can then use this percentage loss against comps for the size of the subject.

Either that or tell the mortgage company that no one would buy the home but would simply buy the site and demolish the home, giving them a land appraisal with demolition cost. That oughta make 'em happy. NOT.
 
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