Site Condo Lot Adjustments?

[George Hatch]

If you're trying to isolate an adjustment factor for the effect of this form of ownership vs fee simple than you don't need current sales to do that. You can use the sales history of this project and check up on the prior sales to see how they've stacked up to subdivision homes in the past, and bring that adjustment factor forward into your current comp selection. Or, you can look for other such projects in other areas and see how they have been comparing to the sales of subdivision homes.

 

[George Hatch]

I am assigned to the purchase-related appraisal of a similar property in Beaumont at present, conducting a search using SFR w/HOA, in addition to Condo, per se, with all potential properties filtered by legal description, based upon an assumption that a typical buyer wouldn't care whether a property is a SFR in a PUD, or a Condo, and using a mixture of both property types in the SCA grid, while waiting for the lender to advise whether they are good with my choice of a 1004 rather than a 1073 because the condo cert I requested from the management company probably won't ever arive.

There's no need to assume anything when you can actually make the comparisons yourself using previous sales in this project. I'm not suggesting that your assumption is actually wrong, but I am saying that if you make an unnecessary assumption then the odds of some reviewer deciding on the fly to challenge that assumption goes up.

 

[brady2000]

In my experience site condos are typically situated on plats that are more or less the exact footprint of the structure. If already considering the overall GLA and/or GBA in your analysis then to also consider another adjustment for the area of the site would be potentially double-dipping in my opinion. I can see an adjustment for a superior/inferior location or view but not necessarily site size however the market data should speak for itself!

 

[Mejappz]

In my experience site condos are typically situated on plats that are more or less the exact footprint of the structure. If already considering the overall GLA and/or GBA in your analysis then to also consider another adjustment for the area of the site would be potentially double-dipping in my opinion. I can see an adjustment for a superior/inferior location or view but not necessarily site size however the market data should speak for itself!

That’s my experience as well. Most of these site condos are situated on zero lots. If an adjustment is to be made, it would be for Location, e.g., Corner/End Lot or View.

 

[glenn walker]

I am assigned to the purchase-related appraisal of a similar property in Beaumont at present, conducting a search using SFR w/HOA, in addition to Condo, per se, with all potential properties filtered by legal description, based upon an assumption that a typical buyer wouldn't care whether a property is a SFR in a PUD, or a Condo, and using a mixture of both property types in the SCA grid, while waiting for the lender to advise whether they are good with my choice of a 1004 rather than a 1073 because the condo cert I requested from the management company probably won't ever arive.

No not on a 1004-its a site condo, and as far as a Condo-Cert tell the lender you will complete it as soon as you have one or walk : )

 

[Lil Rhody]

On site condos the owner of the property also owns the site, hence its called a "site" condo. They have to mow the lawn, do any sort maintenance to the land and they are also responsible for the landscaping. In addition with a site condo the property owner also owns the exterior walls. Its the same as a regular ole house except they have an association due usually for a club house, tennis court or a pool etc. You should definitely make an adjustment if there is market data indicating that an adjustment is necessary for site size difference.

Would you happen to have a source for a definition of Site Condo that references land ownership and/or the ownership rights? I have been looking for a few days and cant find any credible definition that includes any verbiage of the land ownership. FHA has the following definition of Site Condo in the 4000.1:
Definition
A Site Condominium refers to:
• a Condominium Project that consists entirely of single family detached dwellings that have no shared garages, or any other attached buildings; or
• a Condominium Project that:
o consists of single family detached or horizontally attached (townhouse) dwellings where the unit consists of the dwelling and land;
o does not contain any Manufactured Housing units; and
o is encumbered by a declaration of condominium covenants or a condominium form of ownership.

I am reviewing an appraisal of a detached condo unit, that the appraiser called a site condo but there is narrative explaining that there is no land ownership. The lender is trying to submit this loan through HUD as a site condo to circumvent the approval process and when I told him that a site condo includes land ownership and that this property is just a detached condo unit, he is asking for a definition source. I asked for the declarations but they don't want to pay to get a copy. Any help would be appreciated.

 

[ZZGAMAZZ]

Would you happen to have a source for a definition of Site Condo that references land ownership and/or the ownership rights? I have been looking for a few days and cant find any credible definition that includes any verbiage of the land ownership. FHA has the following definition of Site Condo in the 4000.1:
Definition
A Site Condominium refers to:
• a Condominium Project that consists entirely of single family detached dwellings that have no shared garages, or any other attached buildings; or
• a Condominium Project that:
o consists of single family detached or horizontally attached (townhouse) dwellings where the unit consists of the dwelling and land;
o does not contain any Manufactured Housing units; and
o is encumbered by a declaration of condominium covenants or a condominium form of ownership.

I am reviewing an appraisal of a detached condo unit, that the appraiser called a site condo but there is narrative explaining that there is no land ownership. The lender is trying to submit this loan through HUD as a site condo to circumvent the approval process and when I told him that a site condo includes land ownership and that this property is just a detached condo unit, he is asking for a definition source. I asked for the declarations but they don't want to pay to get a copy. Any help would be appreciated.

This site discusses the issues and references FNMAE standards: https://www.classvaluation.com/site-condo-conundrum/

 

[NachoPerito]

I have seen plats have 'site condos' in order to fit more lots onto a property. If your lots are smaller in this subdivision than you probably have an inferior subdivision. Could be due to site size or could be that you are part of a condo and the others aren't. I am not sure what a typical buyer would prefer, but probably not a condo ownership.

 

[ZZGAMAZZ]

I have seen plats have 'site condos' in order to fit more lots onto a property. If your lots are smaller in this subdivision than you probably have an inferior subdivision. Could be due to site size or could be that you are part of a condo and the others aren't. I am not sure what a typical buyer would prefer, but probably not a condo ownership.

I just completed a site condo purchase assignment using similar site condos and also detached PUD's with HOA fees, describing which-was-which in the SCA narrative and explaining my rationale for doing so, although prioritizing identical site condos. I figure that market reaction to the two types must be identical if the MLS listings often were incorrect because realtors would be more aware of the distinction than a typical buyer.

 

[Trihard]

Would you happen to have a source for a definition of Site Condo that references land ownership and/or the ownership rights? I have been looking for a few days and cant find any credible definition that includes any verbiage of the land ownership. FHA has the following definition of Site Condo in the 4000.1:
Definition
A Site Condominium refers to:
• a Condominium Project that consists entirely of single family detached dwellings that have no shared garages, or any other attached buildings; or
• a Condominium Project that:
o consists of single family detached or horizontally attached (townhouse) dwellings where the unit consists of the dwelling and land;
o does not contain any Manufactured Housing units; and
o is encumbered by a declaration of condominium covenants or a condominium form of ownership.

I am reviewing an appraisal of a detached condo unit, that the appraiser called a site condo but there is narrative explaining that there is no land ownership. The lender is trying to submit this loan through HUD as a site condo to circumvent the approval process and when I told him that a site condo includes land ownership and that this property is just a detached condo unit, he is asking for a definition source. I asked for the declarations but they don't want to pay to get a copy. Any help would be appreciated.

Call or look at the assessors property look up website. Is there a value that they have for the site? If it is a site condo they should have a value just for the land. If there is no land included its just a detached condo. You don't need Fannie or FHA to explain that. Sounds like the lender is tying to fit a square peg into a round hole.