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Unique property, need help- Please

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Paul Ness MAI

Member
Joined
Jan 14, 2002
Professional Status
Certified General Appraiser
State
Pennsylvania
I wouldn't go with the cost approach unless there is a substantial amount of land, in which case most of the value would be in the land. I don't think you indicated how much land. With such a limited market property you would still have to reflect functional obsolescence and how would you come up with that?

I'm thinking you need to derive some sort of discount for an extended marketing period. If it is rural, possibly search "bungalo" or "cabin" type second homes? People here in southern PA own cabins in the mountains in northern PA, usually on some acreage, or bungalos along a local river, not much good for anything but weekend getaways. Anything like that in your area? I was through southern AZ many moons ago, visited "Old Tuscon" as a kid back in the days of a TV show called High Chapperal(sp?) that was filmed there and remember there was nothing but cacti and desert in every direction.

Good Luck!
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Been thinking about your problem property. There is a workshop constructed in the same manner on the UofA experimental farm here in Safford. Does the UofA have any info on this type of structure? As far as comparables are concerned, the only thing I can offer is a round house of stucco block construction with a half doughnut on the second floor. Bedrooms on second floor have railings over looking the main floor instead of interior walls. Located on about 4 acres on the bank of the only running stream in the county, with lots and lots of mature mesquite and tamarask trees. Sale occurred a year ago. If that sale will help I can send you some info. Got three dome houses available for sale, each on 7,000 square foot lots. What about a resale of a straw bale, since I understand there are a lot of them in Pima County? Or a rammed earth resale or a resale of anything out of the ordinary. Finished a straw bale couple of weeks ago, used other homes constructed of Eterna or Rasta as comparables--and the round house since it was unique.
 

Damon Pedersen

Junior Member
Joined
Jan 18, 2002
Professional Status
Certified General Appraiser
State
Iowa
The Cost Approach....what the heck??? Who produces cost information on this type of structure? If there is land value, I see your point, but then why not complete it on the land form and add in a dollar value for this "improvement".

The structure obviously contributes some value to the property as it sure looks like it is habitable. How much, I dont know.

I have no advice at this time but I will keep thinking. I do think that to rely solely on the cost approach would be misleading. First of all the actual cost basis would be questionable and secondly, the amount of functional depreciation would vary greatly from one person's eyes to another.

Just my opinion.

Damon
 

Neil (Texas)

Sophomore Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Texas
Dome Home Builder:

Mark Henrikson/ Tim Williams
Yuma Dome
10360 South Ave. 5E
Yuma, AZ 85365
(928)341-1581
or (928) 328-2811

The monolithicdome.com webisite has a list of dome BUILDERS and LENDERS. Who knows, maybe this is a niche market for appraisers :lol:
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
>>I wouldn't go with the cost approach, as it is likely to be much higher than what a buyer would pay. <<

Why? Don't you have exactly the same problem? How to adjust for the uniqueness, i.e.- obsolescence in the cost approach, functional utility in the Sales approach? If you have enough comps of other similar houses you can extract either the adjustment or the obsolescence, same thing. The problem in the cost approach would be the RCN, but you can estimate that if you can get accurate estimate for the time of construction. Assuming the RCN at construction is estimated, a time adjustment from M & S table index can bring that cost up to date.
Market reaction could be estimated by polling local Realtors and have them estimate the amount of obsolescence or discount. Even if rather informal, a poll of say 10 Realtors who know the place might be better justification than attempting to extract the answer from the market on an isolated sale or two.
Ter
 

jtrotta

Senior Member
Joined
Jan 16, 2002
Neil

now there you go again with your plethera of information; absolutely great resource tool. Thanks, and now Mrs.Biggers should be able to solve her mystery or at least get a much better handle on it.

I'll bet of all the resources available; * this Forum does come up with some of the best stuff on the planet. :)

8)
 

Caterina Platt

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
New Mexico
Why? Don't you have exactly the same problem? How to adjust for the uniqueness, i.e.- obsolescence in the cost approach, functional utility in the Sales approach? If you have enough comps of other similar houses you can extract either the adjustment or the obsolescence, same thing.

Terrell,

I would agree when there are similar situations. From what Pamela has posted, it appears there are not sufficient similar 'unique' sales to determine the true and aggregate functional obsolesence in the first place. The cost approach without this data would almost certainly be significantly higher than what the market would recoup the sellers. My response was to some previous posts who had suggested to 'just go with the cost approach'.

One possibility may be to break up the unique features and see what market data is available in portions. While you may not be able to locate a sale with most or all of the unique features, you probably can find at least some of the features in a variety of sales. Maybe start with 1 bedroom sales. Then look for other 'unique' design sales. The living area adjustment would be most accurate if you can locate sales that were significantly smaller than their surrounding counterparts.

One thought, is there a sale possibly of a similar parcel in the subject area with an improvement that got tucked into the vacant land listings? Maybe a large workshop or barn with electric and plumbing? While this wouldn't be useful in a residential sales grid, this amount plus an estimated amount to 'finish' the structure for living purposes would at least give you a baseline idea of where you may end up in value.
 

DianaOKC

Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Oklahoma
I saw a segment on HGTV the other day that showed them building a home on the coast by laying a foundation, blowing up a balloon, lining the bottom couple of feet with iron bars and then blowing insulation and topping off with stucco. They mentioned a company that does only this by the name of monolithic dome institute of Texas. Hopefully they can provide a list of customers for you. Good luck!
 
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