Question about appraisals Comparably sized unrenovated apartments (some in habitably maintained condition) are recently closing in the mid 500s. I happen to know they have all been bid up *much* higher than that, but the appraisals are pulling back the amounts in the last instance. I'd like to know how much room/change we might expect granted for a custom renovation with restored details? Also... [more]
Question about appraisals
Comparably sized unrenovated apartments (some in habitably maintained condition) are recently closing in the mid 500s. I happen to know they have all been bid up *much* higher than that, but the appraisals are pulling back the amounts in the last instance. I'd like to know how much room/change we might expect granted for a custom renovation with restored details?
Also this is an hdfc building that has termed out of the program, therefore income caps vary by unit vis a vis formula relation to the price. The income cap on our unit will be 50% higher than the others that have closed. Would the income cap difference be factored in by an appraiser?
Would it be unreasonable to think that a renovated/higher income cap unit could come in at 650k or higher? Wondering how the professionals on here might position the numbers and/or describe what appraisers consider.
Thank you!
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Response by David2016
over 6 years ago
Posts: 110
Member since: Feb 2016
Any takers on this question?
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Response by front_porch
over 6 years ago
Posts: 5316
Member since: Mar 2008
Hi David,
Sorry we SE regulars have left you hanging. I don't know the answer, but in the service of my good deed for the day, I did ping a broker from Anchor who I think would know the answer -- he goes by "uptown specialist" on these boards and I'm hoping that he'll weigh in here.
Best
ali r.
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Response by UptownSpecialist
over 6 years ago
Posts: 139
Member since: May 2013
Hi David,
Best answer: It depends. It's not a great answer- but it's real. Yes, it's typical for appraisers to factor in the income restriction details- though opinions will vary and sometimes quite widely. HDFC's are a tough breed to value and what you are describing sounds like it leaves a lot of room for differing opinions. In theory, the renovated unit with higher income cap should be valued quite a bit higher. The market has shifted uptown in the last 6-9 months- so I don't know how you are defining recently closing. As such, I am seeing apartments close lower than expected including in HDFC's that recently amended their formula- so that the income restriction is nearly triple what it was 2 years ago- and it seems they are selling at prices lower than what I would have expected even with the older, lower income restriction. Situations like these are likely impacting appraisers views.
As to your valuation numbers- impossible to know without the address and a lot of specifics about the building. HDFC's, especially in northern Manhattan, have so many different variables than I see in market rate buildings and valuations are definitely complicated. I do try to assist the appraiser (if they will accept it) by providing comparables when possible backing the sales price- but even if they accept it, doesn't mean they will agree with your comps.
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Response by David2016
over 6 years ago
Posts: 110
Member since: Feb 2016
UptownSpecialist - thank you for this thoughtful response. By "recently closed" I mean this year. 4 out of 5 of the other units had bidding wars. The 5th one , which is the only one at all renovated (in 2007) is a harder sell because it's smaller and the reno is extremely cheap, ugly and unfriendly. Of the 4, one is waiting for contract and another other for closing. 2 have settled in January/February. The one waiting for closing was bid very high the first time but the deal got killed by the appraisal in January. The seller wasn't willing, at that time to go 75k lower. Second time around (a month ago), it still went way above ask though not as high as in the first round.
It sounds like what you are saying is that 650k is not crazy but in no way presumable? I'll see if I can assist with comps when the time comes.
ali r. - thank you for the good deed :)
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Response by UptownSpecialist
over 6 years ago
Posts: 139
Member since: May 2013
Yes, $650k is not crazy but not presumable.
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Response by David2016
over 6 years ago
Posts: 110
Member since: Feb 2016
Thanks. Is there a number above the mid 500s, that could be? Maybe 600k?
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Response by UptownSpecialist
over 6 years ago
Posts: 139
Member since: May 2013
I find myself saying this almost daily in this business...."It depends". I can't comment on price with any degree of accuracy without knowing a great deal more about the building and apartment, and even then pricing is part art, part science. There are some apartments and buildings where pricing is quite linear and predictable to a large degree- and there are many more where pricing requires tremendous adjustments to account for variables. Even then, it's not pure science.
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Any takers on this question?
Hi David,
Sorry we SE regulars have left you hanging. I don't know the answer, but in the service of my good deed for the day, I did ping a broker from Anchor who I think would know the answer -- he goes by "uptown specialist" on these boards and I'm hoping that he'll weigh in here.
Best
ali r.
Hi David,
Best answer: It depends. It's not a great answer- but it's real. Yes, it's typical for appraisers to factor in the income restriction details- though opinions will vary and sometimes quite widely. HDFC's are a tough breed to value and what you are describing sounds like it leaves a lot of room for differing opinions. In theory, the renovated unit with higher income cap should be valued quite a bit higher. The market has shifted uptown in the last 6-9 months- so I don't know how you are defining recently closing. As such, I am seeing apartments close lower than expected including in HDFC's that recently amended their formula- so that the income restriction is nearly triple what it was 2 years ago- and it seems they are selling at prices lower than what I would have expected even with the older, lower income restriction. Situations like these are likely impacting appraisers views.
As to your valuation numbers- impossible to know without the address and a lot of specifics about the building. HDFC's, especially in northern Manhattan, have so many different variables than I see in market rate buildings and valuations are definitely complicated. I do try to assist the appraiser (if they will accept it) by providing comparables when possible backing the sales price- but even if they accept it, doesn't mean they will agree with your comps.
UptownSpecialist - thank you for this thoughtful response. By "recently closed" I mean this year. 4 out of 5 of the other units had bidding wars. The 5th one , which is the only one at all renovated (in 2007) is a harder sell because it's smaller and the reno is extremely cheap, ugly and unfriendly. Of the 4, one is waiting for contract and another other for closing. 2 have settled in January/February. The one waiting for closing was bid very high the first time but the deal got killed by the appraisal in January. The seller wasn't willing, at that time to go 75k lower. Second time around (a month ago), it still went way above ask though not as high as in the first round.
It sounds like what you are saying is that 650k is not crazy but in no way presumable? I'll see if I can assist with comps when the time comes.
ali r. - thank you for the good deed :)
Yes, $650k is not crazy but not presumable.
Thanks. Is there a number above the mid 500s, that could be? Maybe 600k?
I find myself saying this almost daily in this business...."It depends". I can't comment on price with any degree of accuracy without knowing a great deal more about the building and apartment, and even then pricing is part art, part science. There are some apartments and buildings where pricing is quite linear and predictable to a large degree- and there are many more where pricing requires tremendous adjustments to account for variables. Even then, it's not pure science.
Got it. Thanks.