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Angel Calzadilla's Blog

By Angel Calzadilla | Agent in Fort Lauderdale, FL

What to look at when appraising a condo unit


When doing an appraisal, is it true that the appraiser cannot use any comparable in the same building as long as it is being sold by the developer?

There were 9 closed sales in my building in the past 6 months and he did not want to use any of them, claiming that there are not considered market value because the developer is selling them. Is that right? If not, how can I fight this?

Answer I:

There's no law saying you can't use them, but for the appraisal to be utilized for the financing, well you've heard the old adage..."He who hath the gold makes the rules" that's exactly the problem. Here is but one set of guidelines put out by freddiemac, now couple that with fanniemae and FHA and you get the idea.

 - For Established Projects, three comparable sales may be used from within the subject project that are resales exposed to the open market, and not under the control of the project developer or property seller of multiple units

 - For properties in controlled markets, at least one comparable sale must be outside the influence of the developer, builder or property seller. Resales from within the subject project that have been exposed to the open market may be used to meet this requirement. Comparable sales from outside the subject Project must also be outside the influence of the subject property's developer, builder or property seller

 Units in Detached Condominium Projects: Comparable sales may be detached 1-unit dwellings not in a Condominium Project that are in the same market and compete for the same purchasers. The appraiser must support the use of 1-unit dwellings as comparable sales and must analyze and report the impact that the condominium restrictions have on marketability and value. 

 Answer II: 

It seems nowadays appraisers and banks have their own set of rules when it comes to using comparables. I've even seen the rules vary from bank to bank subsequently to the benefit of the bank. 
 
Angel Calzadilla

Comments

By Helen Oliveri,  Sun May 27 2012, 07:05
Great blog!

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