|Appraisals/common house mortgages||<– Date –> <– Thread –>|
|From: David Mandel (dlmandelrcip.com)|
|Date: Thu, 2 Jan 1997 00:53:40 -0600|
Denise (I think) wrote: >> when appraisers appraise condos, >they add very little value for the common facilities.< > and then Thomas wondered: > I wonder if this works for tax appraisals too. I wonder where the >trade off is between a low tax assessment and a high appraisal for resale. In our experience here, anyway, tax assessors assume that the value is what you paid for your property and assess it accordingly. That's how we were treated, and we recently succeeded with an appeal to have our initial assessments lowered to the appraised values, which were lower than our final prices (a long story of its own). *** I'm still wondering about this business of considering a separate mortgage for common facilities due to their low-balled value when considered part of the condominium units. Denise indicated that one project did this. Does anyone know which? The idea sounds intriguing but contrary to what I though the structure of a condo is: the owner of each unit owns an undivided share of the land and any common facilities. Who would be the owner of the common house if it has a separate mortgage? Also, if the reason for doing this is that "when appraisers appraise condos, they add very little value for the common facilities," then why would a lender and its appraiser all of a sudden consider the same common facilities so much more valuable just because they are owned by some separate entity that's seeking a separate mortgage? This sounds too much like alchemy. And if the appraised value is not raised by separation, then it won't help, because someone -- presumably the same individual unit owners -- will still have to come up with the same large down payment. Moreover, I question whether the typical cohousing condominium's common facilities are so much more costly than those of many other condos which may well have swimming pools, club houses, exercise facilities, heck, even golf courses. Well, I could see the golf course owned by a separate entity and having a separate loan. but the other stuff? I doubt it. Instead of complicating your structure with a separate entity and mortgage search that may not pan out anyway, I suggest working on your appraisers, waxing enthusiastic about how desirable your project is and politely badgering them for higher values if needed to help getting loans. No need to make a big deal about how different cohousing is from other condominiums (if condo is your structure, that is). On the contrary, lead the appraiser to treat it as much as possible like other condo projects; the concept is familiar to her/him. The most important attribute is to show that you and the other buyers are willing to pay $XX for these homes. That's what makes them as valuable as you need them to be. And once the first couple of sales are recorded, it's even easier for the appraiser to justify the high numbers you need for subsequent sales. So if you can, have the first sales close be those to buyers who can and want to make down payments on the large size anyway. That will help the others who need larger loans obtain them by establishing high values. David Mandel, Southside Park, Sacramento
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