Walk Out

[CindyR]

. Were the finished and unfinished categories properly differentiated in the report? If not I would say that really is an 'error' that should be corrected. and may lead to further analysis from the appraiser.

No they were not. Walk-out was not acknowledged and the finished vs. unfinished were not distinguished. BTW, another condo just like mine with no basement at all sold for $205,000 one year ago. Something just isn't right.[/QUOTE]

The two basement types should have been specified and differentiated. If the appraiser truly believed that finished was not superior to unfinished he should have specifically stated that in the report. That is probably an error that you can pursue.

 

[LiveJoy]

No they were not. Walk-out was not acknowledged and the finished vs. unfinished were not distinguished. BTW, another condo just like mine with no basement at all sold for $205,000 one year ago. Something just isn't right.

The two basement types should have been specified and differentiated. If the appraiser truly believed that finished was not superior to unfinished he should have specifically stated that in the report. That is probably an error that you can pursue.[/QUOTE]


As I said earlier, I contacted the Vice President of the Appraisal Company, and he brought up the appraisal on his computer. I pointed out what I believed to be "errors" or "omissions" on the report. I had him bring up the pictures of my home and the pictures of the #1 comp and I showed him the differences. At least he listened to me and said he would see what he could do. Unfortunately in the past six months there was only the one that was like mine that sold in our community. There were others that sold but were different floor plans--two story, two car garages, one bedroom, no garages, etc. That was the only one with the same first floor plan, and some type of basement.

 

[LiveJoy]

Walkout basements usually have more appeal than sub-basements (windows below grade) with no walkout. The adjustment for the difference is derived through market evidence. If there are no recent sales, then the appraiser should have gone back further in time to extract a percentage adjustment. The percentage adjustment is derived by pairing 2 sales (1 with walkout & 1 without walkout). The difference in sales price between the sale with the walkout (usually selling for more) is divided into the sale without the walkout to derive a percentage adjustment. This percentage adjustment usually does not change from year to to year. Therefore if the paired sale occurred 5 years ago and the percentage adjustment say was 5%, this adjustment would be the same in today's market. The 5% differential is reflected by current market conditions which may be stable, declining or increasing.

That was very helpful. Thank you.

 

[J Grant]

I did not read all the posts, impossible for any of us to know of course without seeing the properties. Besides the basement, what else differentiates the other sale from your unit? It could be more upgraded or better view, in which case even if appraiser adjusted for the basement the value might be the same. One assumes buyers would pay more for a finished walk out basement but appraisers have to find evidence of that in other sales and listings to support that assumption...and then the question becomes how much more...5k? 10k? 20k? The market has to let appraiser know, and it should relate to overall price of unit as well as cost...what would it cost to finish a basement to similar level

 

[ucbruin]

I agree with Michigan CG. I have seen finished basements add much more than $16,000. It could be that the finished basement adds the same as the main living area. I would have the appraiser clarify why the basement was not considered.

OP stated finished basement area is 600 sf.

In regards to THIS thread $16K premium for 600 sf finished basement in a condo developed appears overly optimistic.

 

[Michigan CG]

I seem to recall you stating you make no adjustments for FP, 3 vs 4 bedrooms and basements.

Do you really believe that a finished basement is going to increase a condo comp with a closing price of $205,000, 7%-8%?

You recall wrong. I do not make FP or bedroom adjustments but basements certainly I do as there is overwhelming information to support those adjustments. Do I think it will increase the value by 7%-8%, it could but we know little about the property. How big is the basement and what is the quality of the finish?

 

[Michigan CG]

OP stated finished basement area is 600 sf.

In regards to THIS thread $16K premium for 600 sf finished basement in a condo developed appears overly optimistic.

In my area $27/SF of finished basement would be very optimistic also but I know nothing about New Jersey. Still, the appraiser should have adjusted for it or said why he didn't. That is just common sense.

 

[Mike Kennedy]

OP "Unfortunately in the past six months there was only the one that was like mine that sold in our community."

Limiting potential comparables to 6 months - IF this was done by the Appraiser - MAY possibly have resulted in a deficient report. Did the report indicate 6 months as the time frame for the comparable search? The Appraiser and RE Agents involved in the transaction could have, and should have researched retroactively IN your development to determine IF and WHEN another similar Unit sold with a similar finished basement rec room. Secondly, all 3 should also have researched, your Condo Mgmt records, BOTH MLS and your local Assessor's sales records on truly competitive local condo developments as well. To either prove your Rec has some, or no contributory market value it is not unrealistic to retro search 1-3 years possibly 5.

Did you inquire whether or not any of the 3 parties above performed expanded potential comparable sale searches? Were there any Active or Contracted Listings of truly similar units with partially or fully finished Basements?

IMO, unless and until those questions are answered a formal Reconsideration of Value is in order.

SHOULD expanded search(es) by the Appraiser have been addressed IN the appraisal report then you have THAT Appraiser's opinion supported by market facts.

The market (other buyers and other sellers of similar Condos) may or may not consider the additional finished basement to be atypical and an over-improvement with no additional contributory value.

 

[Mike Kennedy]

Warren County......rural New Jersey.

Near here??? >>>

https://www.coldwellbankerhomes.com/nj/lopatcong-township/713-brandywine-way/pid_8932958/

if not, which Township?

 

[Riick]

>> The contract on mine is for $219,000.
>> The appraisal came in at $203,000.
>> The other condo, with a fireplace and without a walk-out to a patio
>> and with an unfinished, fully below grade basement sold for $205,000.

Folks, something sounds wrong to me here.
If we have a model match, and condition, view, and other amenities are fairly equal,
logic would suggest that the property with the finished walkout basement would sell
for more than the property without that amenity.
I'm not arguing for $219,000 but something more than $205,000
The appraisal suggests this extra has a negative value.
--- Unless values in the area have been slipping, looks to me like the appraisal is in error.

QUESTION TO THE Original Poster:
How long ago was the sale of the other unit at $205,
within the last year, 2-3 years ago?? .....6 weeks ago??