Using Condominiums as Comparable Sales for a Single Family (details)

[residentialguy]

all of the above will be reflected in their sales price, right? If the sales prices are similar to the non condo units, voila no preference (for similar units).

Doesn't the need to go 50 miles for comps indicate, perhaps, a problem with the subject property? Most people prefer homogenous areas and if the subject is a bit of a one off, it's usually a problem IMO.

Not necessarily. Attached condos are quite different and I don't believe that they are good substitutes for a detached SFR. You can try to find the market variance, but attached homes where you don't have land, per se, pull a different market. They may be similar in price....so might a gas station. However, it may be the best. I do think you should look at other comparable communities, and then it should be up to the appraiser to use what s/he thinks would give the most credible foundation to their opinion.

 

[DTB]

Not necessarily. Attached condos are quite different and I don't believe that they are good substitutes for a detached SFR. You can try to find the market variance, but attached homes where you don't have land, per se, pull a different market. They may be similar in price....so might a gas station. However, it may be the best. I do think you should look at other comparable communities, and then it should be up to the appraiser to use what s/he thinks would give the most credible foundation to their opinion.

as I previously stated: in my market.

There are many areas where style, function, condition are the main factors for buyers. Type of ownership is a foreign concept to most buyers, particulalry first time buyers which typically are the buyers in theses areas in my market.

If the buyers want Lincoln Park or Wrigleyville, THAT is what matters to them.

YMMV

 

[Couch Potato]

as I previously stated: in my market.

There are many areas where style, function, condition are the main factors for buyers. Type of ownership is a foreign concept to most buyers, particulalry first time buyers which typically are the buyers in theses areas in my market.

If the buyers want Lincoln Park or Wrigleyville, THAT is what matters to them.

YMMV

You mean the three most important factors in real estate are not ownership style, ownership style, and ownership style?

 

[Mark K]

Re-read my post. I NEVER said competing. Those are your words.

The important thing to remember is that a property does not have to be COMPETITIVE with the subject to be COMPARABLE to the subject.

Fannie Mae seems to think otherwise.

"Comparable sale properties that are not truly comparable to the subject property or are in COMPETING neighborhoods are acceptable provided the reason for the use of the comparables is adequately documented and explained. The appraisal must include a discussion of how a COMPETING neighborhood is comparable to the subject neighborhood.


NOTE:In some situations, sales of properties that are not truly comparable or sales of properties that are located in COMPETING neighborhoods may simply be the best comparables available and the most appropriate for the appraisal analysis."

From EFannie all regs.

Looks to me like you can use noncomparable sales in the same neighborhood OR comparable sales in a COMPETING neighborhood. However, noncomparable in the same neighborhood is, IMO, far superior to any sale located an unreasonable distance away, no matter how similar the property style.

 

[incognito]

Looks to me like you can use non-comparable sales in the same neighborhood OR comparable sales in a COMPETING neighborhood. However, non-comparable in the same neighborhood is, IMO, far superior to any sale located an unreasonable distance away, no matter how similar the property style.

Then the best recommendation I can make to you is to not accept any complex assignments of unique properties. There is a living to be made appraising tract homes in your area, I'm sure!

NOTE:In some situations, sales of properties that are not truly comparable or sales of properties that are located in COMPETING neighborhoods may simply be the best comparables available and the most appropriate for the appraisal analysis."

I'm not sure of your point. I conceded and agreed many posts back that comparable AND competitive is best. However, it is not always possible. Where in the FNMA guideline I posted and you utilized, do you see a requirement for competitive?

Show me a definition from an appraisal text which suggests that a comparable must be competitive, and I will retract my "50-100 mile" advice. I don't believe you will.

From The Dictionary of Real Estate Appraisal, AI, : "Comparables" (there is no term comparable in this dict.): "A term for similar property sales, rentals, or operating expenses used for comparison in the valuation process;..."

Now, from The Appraisal of Real Estate, 13th, AI, "More often, comparable property data is specific supply and demand data that relates to competitive position of properties similar to the subject." The authors used the terms "More often", because we have unique and complex properties out there, for which "competitiveness" as a search criterion makes a comparable search either too restrictive or impossible.

Take a class on appraising complex properties, or even on Historic properties. You may have an opportunity to see that some times, the competitive aspect is not all that important to "comparable" searches; but the "comparable" always is!

Lastly, I don't believe I ever condoned the use of a condo for a fee simple property, of different style. I just said that I wouldn't do it if I couldn't support the adjustments (or lack there-of) for the differences in style (detached SFD vs stack condo) and ownership rights (condo vs fee simple), and I offered to the OP what I believe is a reasonable alternative for comparables. Good Luck...

 

[Mark K]

Then the best recommendation I can make to you is to not accept any complex assignments of unique properties. There is a living to be made appraising tract homes in your area, I'm sure!

...

Well, aren't you the condescending prick.

 

[incognito]

Oh well, I hope the OP found the thread informative....


Mods?

 

[AnonApprsr]

I printed the thread for the colleague. He went and found SF sales, and listings. He did note the condos, but did not use them directly in the SCA.

 

[AngelEyes359]

Then the best recommendation I can make to you is to not accept any complex assignments of unique properties. There is a living to be made appraising tract homes in your area, I'm sure!

Over the top!!!! Fragile ego?