Unadjusted values don't bracket the subject's value

[ZZGAMAZZ]

Lol...well, no wonder... send an email like that to me with b.s. legal jargon and I'd block you from my inbox forever.

That might have been the reason nobody responded. I realized that in advance but didn't want to request their professional advice without cautioning them about the potential for their advice to be scrutized, by the BK Court, or the State Appraisal Board, or by the creditors. I didn't want to over-emphasize that possibility but it was import IMO.

 

[ZZGAMAZZ]

Just curious, would you also deduct your local entrepreneurial incentive % on top of the adjustment? Or would that be baked in?

Your question might be even more important than one would think; subsequent interviews of some pretty smart folks revealed the possibliity that an investor/builder might be the most logical potential buyer for a property like this, and if so, the buyer "probably" would pay even less than the market value - the cost to complete the project because of cost-related factors that a lay person wouldn't be aware of, as well as the need to ensure that the completed renovation was done according to code, etc. etc. And "I think" that a "typical contractor" who would buy the property would do so at a steeper discount, with that portion of the discount going to EI. My mentor who is a savvy appraiser, broker, investor, etc. told me about a recent $7,000 appraisal that he turned down after realizing the implications...and he kinda smirked upon realizing how little I charged for the assignment, unaware in advance of anythig more than "the property is being renovated."

 

[George Hatch]

You need to know the costs to complete. As a general rule with partial construction Cost to complete * 2 = discount. You can prove that with matched pairs involving other heavy fixers, flips and partial construction. As usual, you're not looking for direct comparables for your subject; you're looking to build the adjustment factor for use with your direct comps.

 

[George Hatch]

As for percentage complete, M&S had one at some point - they probable still have it in their database if you look. Another reference you can cite is the Calif BOE Assessor's Handbook Section 531 "Residential Building Costs". Its near the back of the publication

 

[Zephyr999]

Just curious, would you also deduct your local entrepreneurial incentive % on top of the adjustment? Or would that be baked in?

The cost approach would include that element as a separate line item...if that's what you mean?

 

[ZZGAMAZZ]

You need to know the costs to complete. As a general rule with partial construction Cost to complete * 2 = discount. You can prove that with matched pairs involving other heavy fixers, flips and partial construction. As usual, you're not looking for direct comparables for your subject; you're looking to build the adjustment factor for use with your direct comps.

I am beginning to think that my inability to determine the percentage of construction finished/unfinished from the builder doesn't matter as long as I obtain the Total Project Cost - Amount Paid thus far from the owner--after like 48 hours thinking about it.

 

[Surf Cat]

The cost approach would include that element as a separate line item...if that's what you mean?

Yes, that's what I mean. No one's going to take on a partially completed project without some sort of discount. Zzagamazz needs to find out from the contractor the % of the construction that's not complete. As opposed to a guess.

 

[Mike Ault]

I am beginning to think that my inability to determine the percentage of construction finished/unfinished from the builder doesn't matter as long as I obtain the Total Project Cost - Amount Paid thus far from the owner--after like 48 hours thinking about it.

What if "the amount paid thus far from the owner" does not correlate with the actual "percent completed"?

 

[ZZGAMAZZ]

Yes, that's what I mean. No one's going to take on a partially completed project without some sort of discount. Zzagamazz needs to find out from the contractor the % of the construction that's not complete. As opposed to a guess.

Contractor advised me that he is owed so much money that he "isnt willing to devote ANY more time to the project, inc time needed to answer my question, but u can hire a contractor to make that decision." When I responded to his q about the reason for the appraisal by describing client confidentiality, he said that he had a good idea, alluding to the BK that would guarantee the loss of income. I subsequently notified BK lawyer and property owner, who is my client. Then Plan B concerning the outstanding amount is debunked in following AF post...

 

[J Grant]

MV is what does it sell for, not what it costs or what the loss is.

If a house is half finished or 1/4 finished all you need is a rough idea , you don't have to be accurate to the dollar what it costs to complete ( every estimate is different btw in real life from contractors)
A partly finished house appeals typically to investors and property flippers, and whether it is a part-finished new house or an old house needing upgrades and repair the project is similar in their eyes, buy it low, put in the least $ they can to flip it and sell it for a higher price of X $. Some flippers do a really good job and just a cosmetic fix. A person buying an unfinished home takes on more of a project wrt expertise and permits than just repairing an existing home. But again, it is not their cost that is the issue, though we should have a rough idea of it, it is what a part-finished home would sell for considering the cost to cure and time to hold it etc

Your overly legal for no reason warning to RE agents scared every one of them off. It wa overkill. Asking for their opinion in a survey did not expose them to liability esp since you do not have to disclose their names in the appraisal.