Single Family Comps on Condo Report?

[Judith Maves-Klatt]

I have received an order for a subject property that is a single family home, but is in a condominium project. This single family home and all of the other single family homes in this project are called condos in the legal descriptions. The city is calling them "air condos". In any case, they sit on a small parcel of land that is owned by the owner of each condo. The lender wants a condo appraisal report, but the only other condo sales in this county are duplex style, townhome, or highrise style condos. My question is - can I use single family homes that are not considered condos as comps in my condo report? I have never run into a condo that was a single family home on individually owned land! Help! Thanks in advance.

 

[timd354]

I have received an order for a subject property that is a single family home, but is in a condominium project. This single family home and all of the other single family homes in this project are called condos in the legal descriptions. The city is calling them "air condos". In any case, they sit on a small parcel of land that is owned by the owner of each condo. The lender wants a condo appraisal report, but the only other condo sales in this county are duplex style, townhome, or highrise style condos. My question is - can I use single family homes that are not considered condos as comps in my condo report? I have never run into a condo that was a single family home on individually owned land! Help! Thanks in advance.

Whether or not something is a condominium unit has nothing to do with the style of the property. Condominiums can be comprised of highrises, midrises, garden apartments, townhouses, detached houses, even unimproved parcels of land in most states. Whether or not something is a condominium is solely an issue of the legal title for the property and can be definitively determined by looking at the legal documents for the property. It sounds like you are appraising a condominium unit that that is comprised of a detached single family style improvement. It is appropriate to appraise this property on the 1073 condo form and all comparable sales should also be condominium units as it is simply not appropriate in most cases to compare a condo unit with a non-condo unit. If this means some of the comparable have to be townhomes style units, you will just have to make do and try to make an appropriate adjustment for any difference in marketability/value, etc.

 

[Mike Boyd]

If the land is described in the title report as a condominium, the deed should reflect the ownership as tenants in common with the other owners in the project. If it does not, then it is not a condo. There are several projects in my area that have condos on one side of the street and identical PUD units on the other side.

 

[Lee Lansford]

...they sit on a small parcel of land that is owned by the owner of each condo. ...

Are you certain of this?

 

[Howard Klahr]

My question is - can I use single family homes that are not considered condos as comps in my condo report?

I would not recommend it. Have you investigated what other developments in the area directly compete with the subject development? Speak with real estate agents active in the subject development as to where prospective purchasers also consider when evaluating homes in this development.

As has been previously noted, condominium is a form of ownership, not an architectural style.

 

[Couch Potato]

My question is - can I use single family homes that are not considered condos as comps in my condo report? I have never run into a condo that was a single family home on individually owned land! Help! Thanks in advance.

Your best comps will be other houses in the condominium, but houses in a PUD can be used if you are very careful. Even if there are no recent sales, you will want to go back in time as far as needed to find other sales. Compare them to houses not part of a condominium to check comparability. Don't be trapped by the word "condo." The physical characteristics are far more important than the style of ownership.

Take the time to read the declaration of condominium. That is where you will find the unit description. Make sure you understand all the unit controls. Look for any restrictions on construction. Once you understand the details of the unit characteristics, it should be obvious if a house in a PUD is comparable.

 

[h2obio]

Sounds like the pre is incorrect and it's a PUD, not a condo, since the individual condo owner owns the land, IMHO.

 

[josephdifranco]

I would weigh in on the side of using non-condo single family houses (preferrably on small lots) if you can't get sf condos. I think that the market would substitute a detached SFR before attached townhouse comparables.

Good luck,

 

[Flakey]

I've run into this before. They are condos. timd354 nailed it.

 

[RSW]

This topic has come up many times on this forum. Please do a search and you will find them.