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Very large 1-Story Rambler (Rancher)

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Rick Phillips

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Certified Residential Appraiser
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District of Columbia
The subject used to be a 1500 sq. ft. rambler--one story with a full basement.

It would be nice if it still were since Comps 1,2,3, & 99% of the rest of the neighborhood = 1500 sq. ft. ramblers...

At some point the subject had another 1500 added on to the rear. Very nice family room w/ fireplace, half bath, full bath, and extra bedroom, etc. So now it is twice as large as any one-story around.

Many improved or new houses in the neighborhood are also up to 3,000 sq. ft., but in the form of 2-story (also w/ basements), colonial or cape style homes.

This area is anything but rural btw.... tons of sales everything you want ... except very large one-story houses...

I can go back a year and a half and out 3+/- miles and still not find a rambler this large.

My question is whether or not I should include a 2-story colonial as an extra comp...
 

DJBanas

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Aug 26, 2005
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Certified Residential Appraiser
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Pennsylvania
I had the exact same problem a few years ago. I used 1 undersized rancher as a 4th comp and used 3 similar sized 2 story homes as the first 3. Explain clearly why you used these. Is there really a market perception that 1 is inferior/superior to the other? Mine flew with no problem.
 

Mike Millson

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Dec 23, 2005
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Certified Residential Appraiser
State
Virginia
Rick, I feel you're pain. The colonials(made from ranch extensions) are generally worth more and are much more prevelant as you said. The adjustment will be hard to extract from the market. I did a similar one(3,600 SF) extended ranch(1951) in McLean in 11/06 and found numerous comps(McLean). If you're subject is in Northern Arlington than the location might be quite similar. Good Luck.
 

Rick Phillips

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District of Columbia
It is only my opinion, but I believe that people do pay more for that extra story even if it means no bigger size. The appeal might have something to do with shuffling their kids upstairs and out of sight :)

Mike, if it were north Arlington I wouldn't be sweating it ... since there's gold and/or oil underneath all those homes (and some parts of Mclean too :D). This is in an older Springfield hood. And I think it is likely an over-improvement--but I wanted to hear if others ever ended up using 2-stories as comps...
 

Mike Millson

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Dec 23, 2005
Professional Status
Certified Residential Appraiser
State
Virginia
Yeah, I realized that after I posted. I assummed you were talking about Arlington from your profile.

What happenned to all the town house jobs with tons of comps from the same subdivision. It seems like they're all getting harder and more complicated to do. Good Luck.
 

lostinthezone

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Mar 2, 2008
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Certified Residential Appraiser
State
Maryland
You might want to consider going to a nearby neighborhood and see if you can extract an appeal adjustment (percentage) from ramblers and colonials that are closer in size to each other, (if there's a neighborhood where you can do it). Also, if nobody else in the subject neighborhood has done this, you have to wonder a bit about marketability/appeal and whether you should adjust for the size difference at a substantially lower rate. I assume you've expanded your search to include split-foyers, split-levels and contemporaries? Frequently an agent will list the 1 stories under "contemorary" in MRIS if they've got the big addition. I've had some luck finding some bigger/oddball properties that way. If you still can't find anything, I'd go with the colonial as a 4th and be conservative about relying on it too much.
 
Joined
Jun 3, 2005
Professional Status
Certified Residential Appraiser
State
Colorado
Rick --

In Denver, ranches have a higher value and better market appeal than 2 stories and split levels. In a case like this, I'd use similar sized homes, regardless of style, with either no adjustment or a $4-6k positive adjustment for the ranch style -- with at least one ranch home in the report, regardless of size.

Good Luck!
 

Webbed Feet

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Feb 11, 2005
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Certified Residential Appraiser
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Canada
Mr. Phillips,

I don't know your area. But in reading a report on such a house the very first thing I would do is go over the "declared" neighborhood with a fine tooth comb. All too often what appraisers pull is simply describing a neighborhood that encompasses a ridiculous land mass so they can go into other locations to make things look good in the report. All because they are either clueless as to how to deal with over-improvements or number hitting. So my only comments are questions. Can you really prove those two stories are in the same market area without differences in the value of the locations? Are you using too large of neighborhood boundaries? Are those two stories really going to remotely be similar in market reaction simply due to the GLA? Do you have completely different market reactions due to functionality and curb appeal?

If you cannot address the above, or fail to, you're going to have a very weak appraisal as a result.

Webbed.

P.S. I have to respond to postings that suggest adjusting for the greater amount of GLA "at a reduced rate" as if this ever adequately addresses over-improvements.. It does NOT! The measure of an over-improvement comes from the burden on ownership of it. Some of the things used in consideration in arriving at an adjustment are excessive taxes, insurance, maintenance, and cost of utilities for starters. Not reducing the GLA adjustment using some % pulled out of your ***. It's not the size people, it literally is the annual expenses of owning it, and maintaining it, when the improvements are in a location that cannot attract those that can afford to do so. What use is getting a great buy "per foot" on a building when one's monthly budget is in the red due to the ownership of it and one cannot afford repairs?
 
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lostinthezone

Sophomore Member
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Mar 2, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
The measure of an over-improvement comes from the burden on ownership of it....

Sure, which is demonstrated in what somebody is willing to pay for it. What I'm suggesting, (and maybe it's not clear from my post), is that if the large addition has limited appeal for this particular style dwelling based on the lack of other similar sized rambler dwellings in the neighborhood, you may want to consider adjusting less per sq ft for the difference than what the market usually dictates when adjusting your comps. IE If you can only find colonials in the size range indicated, and the market shows that you typically adjust at $60 sq ft for the size differences indicated, I'm not sure I would apply that to the rambler because the rambler seems to have limited appeal for a similar size. If you can find market data that shows you what the correct $ p/sq ft should be for this style and size, all the better, however, that sort of data seems to be lacking in this case. All I'm saying is that based on the lack of data, I would consider being more conservative.
 

bcoester

Freshman Member
Joined
Dec 28, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
The basic principle is you can change a house but you cant change the market ares that house is in. If all the houses are 1,500 sf rambler and sell for $150,000 just because you put huge addition doesnt mean that your house is going to be worth alot more. What i would so is value the addition sepreately from the orginal house. Take the addition out of the GLA and value the orginal house alone, then give value for the addition seprately on a per square foot basis or a flat adjustment. Ask yourself: What would someone in that market area pay for an additional 1,500 sf? Or the use of 1,500 sf? What is this 1,500 used for. Is is a big family room, or is there too many bedrooms now? Try to find similar houses with additions recently put on. The problem with using houses that were built at 3.000 sf if they have a different layout and a flow that is very hard to duplicate with an addition. From experience the majority of additions I see dont flow with the house the same as if it was built that way

Brian Coester
www.coesterappraisals.com
 
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