Hello,
I am appraising a non-arms length transaction among friends for a reputable lender. The custom built home sits on a little over an acre and has a little over 3,500 GLA. It is in a solid C4 condition. There is only one comp that I found in the market area that has a tennis court and it is in superior condition with superior amenities and it closed over six months ago (large market adjustment would be required), it is impossible to use paired sales to extract the true market value of this tennis court, due to the superiority of the comparable.
The average life expectancy of a tennis court is 25+ years if well maintained. This court was built in 2001 and is in rough shape (cracking in some places, water damage, peeling, etc). I tried attaching a picture, hopefully it worked. I'm not a tennis player but maybe someone here can give me some insight. If the tennis court is 21 years old, then 4/25=.16, the average cost to construct a tennis court in this market with fence and lights is approximately 100,000+. So, .16X$1,000,000 is $16,000. I don't know enough about tennis courts and was hoping to get some input from you guys. Do you think $16,000 is an appropriate adjustment? I don't think this tennis court was well maintained and honestly I think it would be a financial burden, as opposed to a value adding amenity. This method does not take into consideration market demand for the tennis court. On a scale of 1-10, I believe market demand in this area is a 1 at best. Would taking 10% of $16,000 = $1,600 be an appropriate method of adjustment? Should I still use the superior comp with the superior tennis court and explain that extracting the value for the tennis court is not possible and that I used this method? Does anyone have a better idea. I really don't like tennis, hopefully someone here does and can provide me with some directive. Thank you if you've gotten this far, I really appreciate you taking the time to read this and possibly respond.