Unusual house

[FBN2007]

House is 87 years old, has 8 regular size bedrooms, 4 small bedrooms, 4000+ square feet, once used as a rooming house when first built, zoned for single family use now. In average condition. Larger than any other home in area by far. What methodology would you use to appraise this. Make large size adjustments by comparing to homes in immediate area or expand marketing area to other communities to find similar large homes and make location adjustments as needed.

 

[Rufus]

Do both.

I tend to use recent nearby sales for comps 1 - 3, selecting the least dis-similar available. Underwriters seem to place great emphasis on sale date for the first three comps. The perfect comp next door may be rejected if it sold over one year ago and you place in slot 1, 2 or 3. Next go for very good simularity regardless of distance. Then go back in time for nearby better size simularity. Include actives and pendings if they are like the subject. Three comps with good size simularity helps support that aspect of the appraisal.

You'll probably need 6 - 9 comps. Make location adjustments to the distant comps if appropriate. Basically try to cover all bases with regard to location, sale date, size and age. Also, be sure to explain the complexity of the assignment to assure the reader that you've made every effort to produce a credible report.

 

[Mike Kennedy]

suggest ascertaining if zoning allows for multi-fam; market data for 2-4 family sales exists, and if H&BU is really single family.

 

[Andy Taylor]

Just completed an on-line CE through McKissock called "Even Odder-MORE Oddball Appraisals". It addressed the situation you are describing, i.e. overbuilt, overimproved, complex properties. You might want to check out this course. It does cost $109.

 

[Mary Tiernan]

Had one recently in my area.

Don't forget to look at listings and expireds and talk with local realtors. In my area, several properties with large square footage and bedroom count had expired over the past two years. Also take into account the typical purchaser in your area. In my area, this type of property does not appeal to the average home buyer due to income levels etc.

 

[Lee Lansford]

House is 87 years old, has 8 regular size bedrooms, 4 small bedrooms, 4000+ square feet, once used as a rooming house when first built, zoned for single family use now. In average condition. Larger than any other home in area by far. What methodology would you use to appraise this. Make large size adjustments by comparing to homes in immediate area or expand marketing area to other communities to find similar large homes and make location adjustments as needed.

From what you tell us, your Subject exhibits functional obsolescence.

If you "expand marketing area to other communities to find similar large homes..." (and, I believe that you have to do this), be certain that those properties are SIMILAR (not limited to GLA similarity) to the Subject.
Another "large" house, originally constructed as a SFR and with the utility one would expect of a SFR, would not appear to be a direct market substitute for your Subject.
And, if you were fortunate enough to find a "clone" ("big, old, rooming-house") of the Subject, be certain that its' zoning is SFR.

Be careful...this is the type ("complex") of assignment that often creates problems for the appraiser long after the appraisal is communicated to the client.

 

[FBN2007]

Mike,
H&BU would appear to be as a 2-4 family as it seems zoning does allow that. Would the methodolgy be to make adjustments for functional obsolesence (the estimated cost of converting to multi family) and then use 2-4 unit homes as comps?

 

[FBN2007]

Barry,
Can you kindly give a brief synopsis as to how the McKissock course suggests approaching this? Thanks

 

[Joker]

Sounds like you need to do an exhaustive HBU analysis FIRST!

HBU could be assited living, group home, funeral home, or other permissible use. Then and only then should you consider what comparables to use.

That is, unless your assignment is value in use of a SFR.

 

[Mike Boyd]

Before the term "functional obsolescence" came into my vocabulary. the term "White Elephant" would describe such a house. White Elephants are very difficult to sell. I have known such houses to be on the market for years. To simply go to another community where there are similar properties could result in a misleading report. I would explore finding the mean square footage and age for the community. Then, adjust only up to that mean.