Twin Home Help

[JEFF HERUTH]

*URGENT*, I am doing an appraisal today for a twin home in the Minnesota. The house has a purchase agreement for $206,500 with 3k concessions. The twin home is large for the area (about 2400 sq. ft. / 1500 GLA). I can't find any comps within two miles or even futher back than a year. The comparables that are twin homes are less than 1800 sq. ft. and are selling for about 175k. I believe the house should probally appraise higher than the sales price.

Can I use single family homes for comparables? What would be a good adjustment $$$, and how would you adjust for it....under a seperate line, or for the lot size etc.

<or> would you use comps all 5 miles away etc... and try to find active or pending comps. any awnsers today would be helpfull.

 

[Richard Carlsen]

I'm not sure what you mean by "twin home". I'm sure you do not mean "Twins Home".

Are you referring to a single parcel with two houses on it?

My gosh, if there are no comps, you just might have to use the Cost Approach.

 

[JEFF HERUTH]

I'll clarify twin home. It is side by side single family homes with seperate ownerships and a common wall. (seperate parcel numbers)

Is it nessary to find common wall comps?

If I use a detached single family home what would a adjustment be for a home in the 200k range.

 

[JM2187]

Jeff,

It sounds like this assignment is out the scope of what you should be doing if you're asking the forum for adjustments.

Ignoring that obvious issue, some questions: Would the same buyer be interested in this 'twin home' as a single family? If not, then these shouldn't be used for comparison.

What is the highest and best use?

If the subject is unique then would a potential buyer limit their search for this property type in a two mile radius? If not, then using similar sales 5 miles away makes sense.

Is the property an overimrovement in it's market? If so, this needs to be addressed in terms of valuation.

I've yet to see a lender accept a cost approach to value as the sole approach, certainly Fannie Mae won't, so this is most likely not an option. Instead most lenders would most likely require that similar, two unit sales be used, I'd say mix up the smaller closer units with the more distant sales, at least 4 comparables. Good luck.

 

[JEFF HERUTH]

I just havn't run into an area where there are no attached comparables. I believe that the only difference between this house an single family home is a common wall.

I don't know how the common buyer veiws a common wall... Is it a difference in price that will motivate them for the same square footage, or is a single family home buyer different than a common wall buyer?

 

[CANative]

We call those duets around here.

Have you notified your client about this particular situation. They may not lend on it or they may require two separate appraisasl, or may have some other way of how they need to have it handled.

These properties can probably be sold separately.

As to comps, you may be able to find attached homes in a PUD, or go further out in your market area, be careful to account for location differences.

 

[JM2187]

Highest and best use should answer the question.

 

[Walter Kirk]

Where are you in Minnesota? There are lots of twins and townhouse style units near the Twin Cities as well as lots of older townhouses in the cities. Ifyou are located outside of the metro area look for sales of townhouses or detatched units of similar size which would compete with the subject. Since the subject is a twin what did the other side sell for? Are there other twins nearby which may have sold over a year ago, if so can you develop a ratio between those sales and competing houses?

 

[CANative]

The twin home is large for the area (about 2400 sq. ft. / 1500 GLA)

I may have been under the wrong impression, but it sounded like the assignment was for both units on the same sales contract.

 

[JEFF HERUTH]

I ended up finiding some comps that were about 2-4 miles away, all smaller and have adjusted values of 200-225k. I added a pending and active comp. This is not as tight as I usally like my apprausals to be, but hopefully the explanation dose it justice for the underwriters. None of these were perfect, but together I think they support the value.

but I am still wondering if anyone would use a dettached home as a comparable on a single family attached home, and how much they would adjust for future referrence.