Rob Lentz
Junior Member
- Joined
- Nov 8, 2005
- Professional Status
- Certified General Appraiser
- State
- Michigan
How do you feel about using the sale of the subject a year prior to appraisal as one of your comparables?
I have a property in a very exclusive new site condo development, where there are few sales to choose from. This is what I have to choose from:
Subject: 12/2006 -- $535k -- 4249 SF
C1: 09/2007 -- $490k -- 3056 SF
C2: 09/2007 -- $510k -- 3000 SF
Then, I have two listings in the development:
L1: on market since 11/2007 -- $575k -- 3300 SF
L2: on market since 3/2007, but recently reduced significantly -- $465k --3200 SF
That's all I have to go on....the market in the local area for 1/2 mil $ homes is limited in a good year. The nearest similar development is a good 15 miles away.
What would you do? (Notice the size of the subject versus the comps)
I used it - and the L/O says that it was inappropriate to do so. And of coarse, doesn't want to pay. I reminded him that the fee is not contingent on closing a loan. He says that the appraisal is not acceptable. In my opinion, the borrower's LTV is probably not acceptable. What do you think?
Basically, I concluded that the subject's prior sale was one of the best pieces of market data I have to go by. Our market is slow and in decline, so my thoughts are to use the subject's prior sale - any reason this would be inappropriate?
The borrower has added finishing touches, decor, and approx. $10k of landscape work. My conclusion was that the improvements and the market decline are cross-cancelling. After adjusting other differences my closed sales indicate a range as follows:
Subj -- $535K --0%
C2 -- $512k -- Gross:5.28%, Net 4.46%
C3 -- $520k -- Gross:7.9%, Net 1.9%
Thanks in advance for taking the time to comment,
Rob Lentz
Cert. Gen. Appraiser
I have a property in a very exclusive new site condo development, where there are few sales to choose from. This is what I have to choose from:
Subject: 12/2006 -- $535k -- 4249 SF
C1: 09/2007 -- $490k -- 3056 SF
C2: 09/2007 -- $510k -- 3000 SF
Then, I have two listings in the development:
L1: on market since 11/2007 -- $575k -- 3300 SF
L2: on market since 3/2007, but recently reduced significantly -- $465k --3200 SF
That's all I have to go on....the market in the local area for 1/2 mil $ homes is limited in a good year. The nearest similar development is a good 15 miles away.
What would you do? (Notice the size of the subject versus the comps)
I used it - and the L/O says that it was inappropriate to do so. And of coarse, doesn't want to pay. I reminded him that the fee is not contingent on closing a loan. He says that the appraisal is not acceptable. In my opinion, the borrower's LTV is probably not acceptable. What do you think?
Basically, I concluded that the subject's prior sale was one of the best pieces of market data I have to go by. Our market is slow and in decline, so my thoughts are to use the subject's prior sale - any reason this would be inappropriate?
The borrower has added finishing touches, decor, and approx. $10k of landscape work. My conclusion was that the improvements and the market decline are cross-cancelling. After adjusting other differences my closed sales indicate a range as follows:
Subj -- $535K --0%
C2 -- $512k -- Gross:5.28%, Net 4.46%
C3 -- $520k -- Gross:7.9%, Net 1.9%
Thanks in advance for taking the time to comment,
Rob Lentz
Cert. Gen. Appraiser