Where on the grid to make this adjustment?

[SuperDuperB]

On new construction homes, lately I have been asking for contracts on comparables when the opportunity presents itself. I do not know where to make the adjustment for differences in options selected on the grid. I have a comparable, very similar floor plan and GLA on the same cul-de-sac that sold for $30k more than the contract price of my comparable. I got the contract and options selected were ~90k for comparable compared to ~70k for subject.

Completely separate assignment but same question, where on the grid: Subject property has primary bedroom on second floor along with all the other bedrooms, some comparables has the primary bedroom on first with all other bedrooms on second. There is a very clear difference in pricing for this. So where would I put this adjustment if say all comparables and subject have the same amount of rooms??

First time posting on here, so please forgive me

 

[shrubberyvaluation]

On new construction homes, lately I have been asking for contracts on comparables when the opportunity presents itself. I do not know where to make the adjustment for differences in options selected on the grid. I have a comparable, very similar floor plan and GLA on the same cul-de-sac that sold for $30k more than the contract price of my comparable. I got the contract and options selected were ~90k for comparable compared to ~70k for subject.

Completely separate assignment but same question, where on the grid: Subject property has primary bedroom on second floor along with all the other bedrooms, some comparables has the primary bedroom on first with all other bedrooms on second. There is a very clear difference in pricing for this. So where would I put this adjustment if say all comparables and subject have the same amount of rooms??

First time posting on here, so please forgive me

Just because one person will pay 70k or 90k for those options does not mean the market will, same with the cul-de-sac. Adjust for quality if you see a difference and location if you see a difference for cul-de-sac or make a seperate line adjustment.

 

[SuperDuperB]

Just because one person will pay 70k or 90k for those options does not mean the market will, same with the cul-de-sac. Adjust for quality if you see a difference and location if you see a difference for cul-de-sac or make a seperate line adjustment.

I appreciate the response. I always wonder if making dollar for dollar adjustments for these options is the correct approach but in the end it actually seems like the most pure way to account for differences in the new construction market. One buyer clearly was willing to pay ~12k for that additional garage bay etc. The adjustment for it should be ~12k.

Cul-de-sac I put that difference on the location line.

 

[Terrel L. Shields]

I appreciate the response. I always wonder if making dollar for dollar adjustments for these options is the correct approach but in the end it actually seems like the most pure way to account for differences in the new construction market. One buyer clearly was willing to pay ~12k for that additional garage bay etc. The adjustment for it should be ~12k.

Cul-de-sac I put that difference on the location line.

you can support a dollar-for-dollar adjustment with the numbers. otherwise, I venture you are left with only one other option. Pull the number out your heinie because I bet you cannot "pair" those extras with other sales to justify anything but dollar for dollar. Additional items are a PITA on new construction. Lucky for me, I usually am dealing with custom homes where such add-ons are in the price, and the houses are a unique design.

 

[Zoe]

The selling agent is likely the best person to ask on the differences in price. But back to your question on the grid. There is always a blank line at the bottom of the grid. You indicate it is functional utility difference. I may be reading you wrong but you indicated the difference is attributed to location of the bedrooms. That would be hard to justify. If that were the case, the builder would go to floor plans that were bringing the higher prices.

 

[SuperDuperB]

The selling agent is likely the best person to ask on the differences in price. But back to your question on the grid. There is always a blank line at the bottom of the grid. You indicate it is functional utility difference. I may be reading you wrong but you indicated the difference is attributed to location of the bedrooms. That would be hard to justify. If that were the case, the builder would go to floor plans that were bringing the higher prices.

You would figure they would but it is clear as day, this one floor plan they have is ~2300 sqft, all sell for roughly the same price. Then I have, by the same builder, neighborhood, section floor plans that are ~1900 sqft that consistently sell for more. Only difference is primary is on first floor. Options are just about nonexistent in this case so only thing left to attribute difference to is the floor plan. This is a community that has sold over 1,000 homes in past year and this builder is perhaps the largest so plenty of data points especially in that GLA range.

Thank you, that is what I was leaning to (last line on the grid).

 

[Zoe]

You would figure they would but it is clear as day, this one floor plan they have is ~2300 sqft, all sell for roughly the same price. Then I have, by the same builder, neighborhood, section floor plans that are ~1900 sqft that consistently sell for more. Only difference is primary is on first floor. Options are just about nonexistent in this case so only thing left to attribute difference to is the floor plan. This is a community that has sold over 1,000 homes in past year and this builder is perhaps the largest so plenty of data points especially in that GLA range.

Thank you, that is what I was leaning to (last line on the grid).

Explain that also to the agent/builder. I don't know who gave you access. Explain to whoever gave you access and in the appraisal report.

 

[Zoe]

If you explain to whoever gave you access to subject, it solves many problems.

Your report is primarily targeted to someone who has no clue about the subject.

 

[Tom D]

i like the terrel heinie adjustment. it also depends on the sale price. most of the time it is extras, upgrades, or the famous lot premium. if without the extras adjustment the range is pretty tight, don't try to be a perfectionist, especially if they all have mostly same type. the problem occurs when your subject has the extra high extras. then you have a small nightmare. but in a certain price range the extras are a small %. you can put 'extras or upgrades' on the last blank line of the grid and adjust from there. funny thing is, CU doesn't look at that line. the other problem is what extras were there for everyone to find out, to be kept in your work file. maybe you can figure out the big extras to adjust and leave out the rest.

in the old day, extras were always paid for with cash, didn't show in sold price. it was hidden tax free cash for the builder. eventually, a big builder went to prison for tax evasion doing that. someone squealed on him.

 

[J Grant]

On new construction homes, lately I have been asking for contracts on comparables when the opportunity presents itself. I do not know where to make the adjustment for differences in options selected on the grid. I have a comparable, very similar floor plan and GLA on the same cul-de-sac that sold for $30k more than the contract price of my comparable. I got the contract and options selected were ~90k for comparable compared to ~70k for subject.

Completely separate assignment but same question, where on the grid: Subject property has primary bedroom on second floor along with all the other bedrooms, some comparables has the primary bedroom on first with all other bedrooms on second. There is a very clear difference in pricing for this. So where would I put this adjustment if say all comparables and subject have the same amount of rooms??

First time posting on here, so please forgive me

There are several blank lines on the bottom of the grid where you can invent your own category and put the adjustment there, write in your own:

Options/upgrades

Primary bed loc.