SFR Townhouse and Condo Townhouse Comps

[Have Laser-Will Travel]

PUD Townhouse and Condo Townhouse Comps

The subject is a townhouse design (attached) but on its own lot. It's actually in a PUD and there's a pool, etc. If I'm a shopper, I'm going to look at this the same as a similar townhouse with condominium ownership rights. I think using condo townhouse comps would be appropriate but, it's for HUD and the way things are today, I am thinking someone is going to needle me about the distinction. Is there any difference in the ownership rights, etc. that might be an important distinction? Participation in the PUD is mandatory, liens can be imposed for HOA dues, there are common amenities, the unit owners vote. Maybe there's some kind of marginal homeowner's insurance benefit or mineral rights or something. I think the only practical difference is they own dirt instead of airspace rights over the dirt. Can I use townhouse comps with condo ownership and be bulletproof?

 

[MikeinLA]

I have seen site condos compared to PUDs if absolutely necessary because they also include the land, but not airspace condos. I wouldn't do it.

Mike

 

[J Grant]

I have done it...if carrying charges are similar and price ranges similar, get confirmation from agents a buyer would look at both.

That said, it makes sense to use the most similar ownerships, fee simple TH comps that are not condos, assuming you can find them. I would try to use 3 of those first and then the condo TH comps as additional ones . (unless there is a shortage of comps that are fee simple TH?)

 

[Lee Lansford]

... Can I use townhouse comps with condo ownership and be bulletproof?

Sure, if you do it right (as in "look to the market").

Look to the market and judge (as in, do a comparison of) the reaction of the market to the two.

As a broad generalization, I have not observed a difference in value where the sole difference is the form of ownership. There may be some differences (e.g., the condo townhome may not have useable "private" green area where this is of some significance) which effect value, but, anything of significance should be obvious (based upon research--which may require you to stretch back in time and into competing neighborhoods and market area--and some analysis).

I don't know if it is still available, but, "Appraising the Tough Ones" (Appraisal Institute) might be of some interest.

 

[sail143]

It comes down to market perception. Not much, if any difference, from my experience. Buyers accept condominium costs for the convenience of not having to do or manage your own maintenance.

 

[J Grant]

There's market perception and UW perception...in general, clients and UW tend to have a problem with this, so explain and again, imo, if you have similar TH fee simple comps, what is the reason for using TH style condo comps...but there are times and markets where they can be comps and market reaction is similar.

It depends on the community regs as well. In general, not always, but often, condos have stricter regualtions...no renting or limited rental allowed, no pets or limited pet size, no pick up trucks in driveways, and so on. These rules can make resale's more difficult. Some TH PUDS have similar rules, others, more lenient rules. So make sure to research that, also marketing time of TH condos vs fee simple TH .

Condos can tend to have more legal issues and assessment/repair issues, as repairs of common elements are shared and more expensive, the board fights over improvements etc. That makes condo ownership less appealing to some, though a well run building avoids those issues and the stricter rules appeal to a set of buyers as well.

(if you want to experience a form of water torture, attend a condo board meeting)