• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Say What?

Status
Not open for further replies.
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Just came up with this one for an area where sales are just not coming together to make sense!

"Comparable sales used are considered the newest, nearest, most similar qualified and verifiable sales found by the appraiser at this time. All sales found within the past year in the subject project and the closest competing projects were researched and considered. The range of sale prices vs GLA and amenities in this area appear to be scattered at this time with many appearing to have no known or found justifiable reason(s) for the differences."

Where's Austin and how does he do what he does????

I'm at a point where I'm beginning to think these areas that are Realtor driven with their pet appraisers are getting really wacked out with no common sense or applicable reasons for the range of sale prices - at least none that I can find!!! This area is also loaded with FSBOs right now. :question:

Also, using the newest sales, I'm coming in $9,000 under the $289,000 contract price and leaving the minor functional problems without adjustment because I just can't find anything like it. Subject was on the market for almost a year. Sales 6 mos to 1 year ago were higher. :blink:
 

Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Pamela,

Not sure if this will help, but. I have noticed this a little also. Many people are fixing there homes up for marketing efforts at greater levels. Essentially, interest rates are low, finance plans for appliances, floor coverings etc. are 6 months no pay. This has helped a home owner get there house ready for sale with no cash. I plan to do the same thing myself soon. This way I get MAX price as compared to my competitors.

Not the total answer, just part of the whole picture.
 

TEL2002

Elite Member
Joined
Jan 16, 2002
Professional Status
Retired Appraiser
State
Louisiana
Pam,

The 9K is about 3% less than the sale price. What %range should an appraiser be in? I've heard we should always be within (+-)5% of the actual dead on value, I've also heard we should always 2be within (+-)2% of the dead on value. If it is not a cookie cutter, I bet if you had 5 appraisers do this house, you would have 5 different estimated market values...but they should all be darn close to each other...how close is the question?
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
4 best and newest comps adjusted at:

$276,300
$275,300
$280,500
$271,800

The older adjusted comps are:

$292,000
$294,600

The 3 bedroom sales are under $250,000

Subject is 7 yrs old, 3 bedroom 2.5 bath, enclosed the attached garage into a rec room and added a detached 2 car garage. Nothing like it around this market area!!! Everything in the GLA range it now has is typically 4 - 5 bedrooms with 3+ full baths.
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
Pam: As I have stated many times before: “if there are no value factors that correlate with price, then there is no basis for doing an appraisal.” That is why that argument is voodoo that people buy houses based on emotion and you have to know the market to appraise under these conditions. If you can’t find any correlating value factors, you may as well fold your tent and go home. One little trick I use is to graph every value factor you can think of versus price. For example, graph GLA, room count, br’s, baths, fire places, whatever you can think of against price to see if anything correlates, then calculate a trend line and see if that factor correlates with price. Most of the time in my market what you describe is attributable to property condition as the value determining factor in older dwellings. Property condition in 80-year old homes can range from original condition to completely remodeled but there is no value factor to reflect it other that range of prices under the conditions range.
I have a market segment just like the one you describe that is totally irrational. These are large (2500 to 5000 sf) high quality dwellings that were constructed in the 1920’s in the center of the original uptown heart of the city and surrounding a small urban university. They stated out as single family, then in the 60’s were converted to srf with some rental units and then recently started re-conversion back to srf. The people that drive this market are the Yuppie crowd. They like to go to a party and say: “We just purchased an apartment house on West Main Street.” That is really sheek in Yuppie circles.
It is really insane. These houses have central heating system with up to five rental units and the landlord pays the heat. They are chopped up functionally with very high maintenance and attract strange tenants. The gross rental multipliers run as high as 100 and up while at the same time you can buy modern townhouse & garden apartments with low maintenance plus high occupancy with a GRM of 70 to 84. It makes no economic sense to purchase the old houses. I have literally spend days searching the history of every dwelling in the district back 15 years trying to find a price pattern but there is none, it is pure whim.
To further complicate the problem the major market player is a woman whose husband is a home inspector. They are buying them all up. Every time I do an appraisal for one of her purchases she is on the phone wanting to know what the hell is wrong with me. Finally, the bank just got some one else to do appraisals for her purchases. This woman is an expert at milking the system. She knows that this kind of property will throw an inexperienced appraiser for a loop and she knows how to play her cards.
This is lose-lose situation for an appraiser. This is the very class of person that will turn you in to the state board if they don’t get things their way. My solution is to just say: “I have done extensive research in that neighborhood and in my opinion there is no discernable value pattern.”
Would you believe that in 30 years of appraising, almost every problem I have had with objections to my appraised value came from within a circle within a radius of one half mile inside this neighborhood?
 

Blue1

Elite Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
Simple....As Realtors ALWAYS tell me.......Just go farther away! :blink:
 

airphoto

Senior Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Pennsylvania
Pam!

You got indicated values in that tight of a range? Whoa! I dunno what that feels like ..
 

Tim The Enchanter

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
4 best and newest comps adjusted at:

$276,300
$275,300
$280,500
$271,800

The older adjusted comps are:

$292,000
$294,600

The 3 bedroom sales are under $250,000

Hmm. <_< Your $289 sale price is within the range including the older comps. Are prices declining?

Seems to me if they really wanted 4 bedrooms the rec room could serve as #4. Maybe the buyer only needs 3 bedrooms, and wants the rec room for their pool table or whatever. I don't suppose they would be the only 1. And, how much diff is there from 2.5 to 3 full baths? 1 fixture.

Don't you wish sometimes you could give a range instead of a point value? :)
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Welcome to a declining market. Extended marketing times, increasing inventory and lowered sales prices. It's a classic trend. That being said, it may be a seasonal trend. I find that sales activity is seasonal but the market normally goes flat in the winter as opposed to an upwards trend in the summer. However, over the last year, sales are flat at best after declining approximatley 10%. I'm beginning to see a second declining trend. Sales have been down virtually every month over the last year. While homes have to be fixed up to sell, excessive repairs and updates are not returning value. (Andrew-be careful!). I was reading a realtor rehash of last year where they are saying that the "Average" sale price was still increasing. Again, that is the most meaningless statistic out there, right with "Median" sale price. It says nothing about the home style, quality, location, etc. The comments said that builder inventory was down showing a strong demand and a shortage of available new homes. No, it means that builders are not building "spec" homes and are not starting until they get a contract. They don't want their money tied up in non-producing inventory. You drive through a new home subdivision and you will find builder signs on vacant lots but not on homes under construction.

I don't look for a turn-around anytime soon.

Roger
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Thanks, Roger. I'm not yet ready to actually state that this market is declining but all the signs are here with varying degrees depending upon the individual market areas and subdivisions. The hype being put out in the media is amazing! I believe they are trying anything to make it hang on while it just keeps slipping out from under them, and they absolutely refuse to acknowledge it.

:(
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks