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Which Form To Use?

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zhencai

Sophomore Member
Joined
May 27, 2003
Professional Status
Certified Residential Appraiser
State
California
I have a request to appraise a house. According to Realquest/NDC, its land use is Condo, its zoning is R1 residential. I went to check the house and found that it's townhouse. Which form should I use? URAR or Condo?

Thank you.
Zhen Cai
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Townhouse is an architectural term--not a descriptive term for a form of ownership. A single family home can be on a site by it self, in a subdivision with zero lot lines, or Z lots, etc with a mandatory home ownership dues which means it is a PUD (Planned Unit Development). Depending on the laws in you state, instead of a PUD it might be a condominium development. Definition in Websters dictionary for a condominium (condo) is: A form of real property ownership in which the purchaser of each unit of an apartment building or in a complex of multi-unit dwellings acquires full title to the unit and an undivided interest in the common elements (the land, roof, elevator, etc.). A condo might be called a townhouse, a home in a PUD might also be called a townhouse depending on the typical terms in your specific neighborhood. Other terms that might be used are patio homes, duplex homes, quads, row houses, etc, etc, etc.

So you need to do some research into the subdivision CC&Rs for the subject subdivision and based on the laws in your state, make a determination whether the home is in a "condo" development or a "PUD" development based on those CC&Rs.

Zoning has absolutely nothing to do with whether it is a condo or a PUD. See the discussion under What is a PUD in another thread.

If the subdivision CC&Rs indicate it is a condo, then use the condo form regardless of the style of home. If the subdivision CC&Rs indicate it is a PUD, then the URAR would be most applicable. If you are in one of those states where owners in condo developments own their land under their unit, then a URAR might be better.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Fannie Mae guidelines effective June 30, 2002.

Section 301 - Units in Condominium Projects

A condominium project is one in which individual owners hold title to units in the project along with an undivided interest in the real estate that is designated as the common area for the project.

Appraisals for condominium units that secure manually underwritten mortgages are usually documented on the Individual Condominium Unit Appraisal Report (Form 1073) or the Desktop Underwriter Quantitative Analysis Appraisal Report (Form 2055). However, we will accept appraisals of detached condominium units on the Uniform Residential Appraisal Report (Form 1004), if the appraiser includes an adequate description of the project and information about the owners' association fees and the quality of the project maintenance. Desktop Underwriter will specify the level of property analysis and review for Desktop Underwriter-processed mortgages that are secured by condominium units.

The appraisal of an individual unit in a condominium project requires the appraiser to analyze the condominium project as well as the individual unit. The appraiser must pay special attention to the location of the individual unit within the project, the project's amenities, and the amount and purpose of the owners' association assessment since the marketability and value of the individual units in a project depend on the marketability and appeal of the project itself.

You can access them at http://www.adfinet
you have to register but it is free.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Read the legal description.....if it says "Lot 4, in Block 1, etc" is is most likely a town-home and can be done on the URAR. If the legal reads something like "Condo unit 345 in building XYZ" then it is a condo and should be done on the condo form.

New appraisers should have special guidance when doing condos as they are more complicated than a simple single family house or town home BECAUSE of ownership of common elements. The appraiser should also review the condo declaration and financial reports.
 
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