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Use Of Teardowns As Comps...
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Scott Kibler
Elite Member
- Joined
- Oct 7, 2003
- Professional Status
- Certified Residential Appraiser
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- Illinois
I try to avoid using teardowns as comps as in my experience they are typically bought by developers to replace with large custom built homes. In most cases the developers do not represent the typical buyer in the market. However there are areas where the land value has grown so much that the typical buyer of one of the remaining modest houses is a developer.
moh malekpour
Elite Member
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- May 25, 2002
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- Certified Residential Appraiser
- State
- California
I avoid tear down comp for the following reasons:
1- I don’t know how it looked like when it was sold and by looking at the MLS photo is like not looking at the comp.
2- I am not sure if MLS photo is genuine since the property doesn’t exist to verify it with MLS photo.
3- I am not sure what was the buyer’s intention at the time of purchase: keep the existing or demolish and rebuild it.
1- I don’t know how it looked like when it was sold and by looking at the MLS photo is like not looking at the comp.
2- I am not sure if MLS photo is genuine since the property doesn’t exist to verify it with MLS photo.
3- I am not sure what was the buyer’s intention at the time of purchase: keep the existing or demolish and rebuild it.
Big ole Boy
Elite Member
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- Dec 6, 2003
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- Tennessee
When the comps you drive up to are increasingly - scraped - then - your subject is most likely an improvement with a remaining economic life which is less than 10 years or maybe 0.
You got a land appraisal, most likely. - Naples, FL - all day long - 5 yr old houses
get torn down that cost $5 Million to build...
Your land residual is most likely 90 to 100% of the value.
Not a real great topic for USPAP - USPAP is mostly government pysco babbal anyways...
You got a land appraisal, most likely. - Naples, FL - all day long - 5 yr old houses
get torn down that cost $5 Million to build...
Your land residual is most likely 90 to 100% of the value.
Not a real great topic for USPAP - USPAP is mostly government pysco babbal anyways...
Kate
Senior Member
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- Aug 24, 2003
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- Certified Residential Appraiser
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- New Hampshire
I liked that instructor.Tthat class had a great passing rate from what I heard.
He made it fun. He brought lots of real life senerios into the text to make it more interesting and to explain why the laws are there and examples of what constitutes as a no no under the laws.
He made it fun. He brought lots of real life senerios into the text to make it more interesting and to explain why the laws are there and examples of what constitutes as a no no under the laws.
Pam Wyant
Senior Member
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- Feb 12, 2003
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- Certified Residential Appraiser
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- West Virginia
I've used some torn-down houses as comps, but only on other homes that are in extremely poor condition and will probably be town down, or will take major renovation to be livable. It goes back to conditon - in some areas the condition is more important than almost any other factor, and using a home in good condition to compare to one in poor condition will result in a very mis-leading value.
larryhaskell
Senior Member
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- Apr 23, 2002
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- Certified General Appraiser
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- Nevada
Katharine:
I don't think it's possible to read a buyer's mind about why they bought a particular property. We have quite a few teardowns in the Lake Tahoe area but properties aren't always immediately destroyed. Sometimes it may be a year or two after the purchase B4 a new home is built. It is quite possible that a buyer could purchase a home with the intent to live in the home and then later decide to tear down the house and rebuild based on additional info such as comparing the cost of updating an older home versus just building a new home. When I find a closed sale in this area and the improvements are still standing when I go by to take my picture, I use the property for a comp if it is appropriate. If it has been torn down then I would likely not use it in a report if I could avoid doing so. I have used properties in reports that I later discovered had been torn down but not much I could do about it then.
I don't think it's possible to read a buyer's mind about why they bought a particular property. We have quite a few teardowns in the Lake Tahoe area but properties aren't always immediately destroyed. Sometimes it may be a year or two after the purchase B4 a new home is built. It is quite possible that a buyer could purchase a home with the intent to live in the home and then later decide to tear down the house and rebuild based on additional info such as comparing the cost of updating an older home versus just building a new home. When I find a closed sale in this area and the improvements are still standing when I go by to take my picture, I use the property for a comp if it is appropriate. If it has been torn down then I would likely not use it in a report if I could avoid doing so. I have used properties in reports that I later discovered had been torn down but not much I could do about it then.
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