We are selling our home on five acres (4.97), and will be entering into a contract shortly (if all goes as planned). My question is when the appraisal is done, is there a standard of the comps they pull on the range of acreage. Btw, this will be a conventional loan. For example, would they only pull 1-10 acres; or up to 5 acres; or anything over 1 or 2 acres, etc. An important note is that this is a small town, so there isn't a ton of comps. So in my opinion, the broader the search the better a picture it gives on our value. Otherwise it could be skewed, and maybe not in our favor. When I look at the comps, I pull up 1+ acres with mnfd home, because there's only a handful above maybe 2 or 3 acres. A couple of the best ones for us are more like 12 - 16 acres. They sold for more than we are asking, but I think they're really good comps, as one is right up the street from us, and just very similar in every other way besides less acreage. I'm worried that the appraiser would just pull up some formula that would leave out these important comps. Is there a standard for this? I'm in Oregon if that makes any difference. I am worried, as I had a bad experience with an appraisal recently on another house, which was a first. Also, people around here seem to complain about the appraisers. Thanks for your insight.
Hello @Kathryn Bowden ! That is certainly a great question for an appraiser. I am. realtor and I can only say how I prepare CMAs for "unusual property". Anything that is difficult to find comps I will just continue to broaden the search until I have a good handful of properties that are close enough to the subject property to determine value. What would likely happen is an appraiser would try to start off with 1-10 acre properties and if they do not find the comps they need they will go to 15 acres or whatever it may be until they feel like the know the true value of the subject property. Lot size is only one of the many factors that go into a home valuation and if things like the condition or location do not match the ones that are pulling up they will continue to broaden. Also, if you believe there is a serious issue with the appraisal after you review it you can contest it and potentially get a second opinion.
@Jacob Wathen , thanks so much. So, if the appraiser were to start with 1-10 acres, would he/she then broaden their search even if they've found similar properties, but just wasn't able to get to the value of my offer/contract? Does that make sense? My property has five acres. Most of the comps are at one acre, but otherwise similar. But the comps I like the most are in the 11-16 acre range. Very similar in every other way and did sell for more than I'm asking. Though I don't know how much might get attributed to the extra acreage. If too much, then I might be better off with the lesser acreage ones!
The appraiser would only broaden their search if they do not think they have found decent comps. They will not look at the price you have valued your home and then try to find the properties that will back up the value. Unfortunately that is just not how it works. Sometimes appraisals are just 500 bucks short of the list price. The reality is you can list your property for whatever you want. The goal is to list it competitively and get a lot of interest in the property. If you list at or just below market value you will have significantly more buyers that are interested in the home than if you use the higher valued properties (12-16 acre ones). Having an additional 10 acres will certainly impact the value of the home. There are ways to determine an approximate cost per acre in your area and do a deduction from there.
If I were you, I would come up with a reasonable compromise between the higher priced homes with more acreage and the lower priced homes that do not exactly fit the location/style/updates of your place and see how the home performs. I also think it is a good idea to consult a realtor in your area. Many agents will be willing to conduct a comparative market analysis for the opportunity to list your home. I certainly understand the appeal to selling a home yourself but agents can put your property in front of more motivated buyers and represented sellers typically make the commission they pay back in the higher price they receive. Just a thought! Let me know if you have any other questions or if you would like referrals for agents in your area.
hey, I thought I would jump into this thread since I have experience in our area. The first issue is that we only have 3 appraisers in the county, and 2 work in the same office essentially.
With my recent refinance, the appraisal included crescent city, langlois, and north bend which is unfavorable to Brookings since our area is more desirable. Properties with acreage are a rarity so they will expand the search.
My refinance came in 30k less than expected, so I did my own comparables and report to counter the appraisal. They increased the value by 15k, so it was worth the time and effort.
Good luck with your journey!
Thanks, @Jennifer Z. . I've heard that as well! I just don't get it. People need jobs - I don't understand why there has to be a shortage of appraisers. I don't get the system behind it that causes that situation. And the reason I'm thinking ahead is because I too ran into a problem with an appraisal on an investment place we have up in Gold Beach just a month or so ago. We had multiple offers, but they appraised it a fair percentage lower - $140,000 on a $150,000 contract (originally had offers for $155,000). However, our place was a stretch on the price per sq foot, but that's because it's a tiny cottage and there are no comps at that size. We gave them our reasoning and comps (also our's was way nicer finish out), but they didn't budge. Our Brookings place should be much easier to justify, but since I was burned once, now I don't trust the process. Yes, we would definitely dispute it , especially depending on what comps they were to use. But hopefully that won't be necessary! All feedback from realtors has been very good on price, and my comps justify it, at least in my unprofessional opinion.
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