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#274375 - 02/08/09 06:54 PM URBAN......SUBURBAN?
CandyMan Offline
Major Contributor

Registered: 07/13/08
Posts: 2608
Loc: California
I need some forum input......Define the difference between urban and suburban...I had a QC issue a few months back......The order was with a new company.....I'm still having difficulty addressing this.....It may be an East Coast thing......just not sure......I'm located on the West Coast...

I presented this same question to about a half dozen agents in my area.....what I found strange, is I got 6 different answers.
Once I get some feedback from the forum (hopefully coast to coast), I'll post what on what I was told by this company. My gut feeling is this may be a set up for a future E&O issue...
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#274376 - 02/08/09 07:03 PM Re: URBAN......SUBURBAN? [Re: CandyMan]
Mr. Foreclosure Offline
Major Contributor

Registered: 09/01/06
Posts: 2834
Loc: upstate New York
Population density can be tough to define; even in rural areas there will be pockets that are villages or small cities. I generally look at a larger area for an overall average density, most of my area I define as rural though I occasionally get in to one significant size city and its suburbs.

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#274378 - 02/08/09 07:05 PM Re: URBAN......SUBURBAN? [Re: CandyMan]
FL_Agent Offline
Veteran Member

Registered: 07/15/08
Posts: 953
Loc: Puffy Clouds
Candy, I had a similar issue with an area that I consider for the most part semi-rural to rural except for the one area which you may consider the main city. I would always classify anything and everything as rural here then one day the mill came back with a 'it's been previously classified as urban'...please explain...yada, yada, yada.

I called the county who directed me to a website and to my surprise most of the area is classified as urban (boy do we have big egos here). So in this instance I just do as the county says even though urban in my head is a place where the concentration of houses is dense as in a big city.

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#274380 - 02/08/09 07:10 PM Re: URBAN......SUBURBAN? [Re: FL_Agent]
Don Price (Pine) Offline
REO-BPO-R.E. Mod
Major Contributor

Registered: 03/12/08
Posts: 3330
Loc: Pinehurst, NC
I asked for the same - someone placed a link form a census that had some information.

It is defined though - if I could just find my old appraisal books - so if you know an appraiser they would be able to give you the text version.

Always has been debatable among appraisers - but not appraisal boards.

It is population density for sure - at one time city-data included it for an area - I think wink


Here's the link Jack Brown posted in the other thread: http://www.census.gov/geo/www/ua/ua_2k.html


Edited by Pinehurst RE Guy (02/08/09 07:14 PM)
Edit Reason: Added Jack's link
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Pinehurst, NC

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#274382 - 02/08/09 07:24 PM Re: URBAN......SUBURBAN? [Re: FL_Agent]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 6166
Loc: Vermont's North-East Kingdom
I don't think I can add much. I have tried to explain that here . . . . in Vermont, a Town is a Geographical area, or a "Piece of Dirt". Some Towns have no roads. You can't get there.

Some of our Towns have "ZERO" Population. Townships are most frequently 6 Miles X 6 Miles. There are people who own the land, but no people living there. If there are so few people, the adjacent Towns may take care of Road Maintenance and the administration of Land Records. Luckily, with No People, they don't usually have Births, Deaths Marriages or Divorces ! But sometimes, people come here to Die, so that's a problem!

Sometimes the people who own the land get Foreclosed on; but they live elsewhere. Towns are not "Urban"; but I sense that I am not succeeding in explaining that even here, with a receptive audience. Imagine the Mills ? They get a mental block.
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Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

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#274386 - 02/08/09 07:37 PM Re: URBAN......SUBURBAN? [Re: Vermont]
barb43 Offline
Veteran Member

Registered: 08/01/08
Posts: 1017
Loc: SW Okla
We have virtually no homes downtown - it's just a business district w/city hall, county courthouse, & fed courthouse, a failing mall, main post office, and a lot of small retail stores & attorney offices. What few homes are there are 80-100 years old.

Then, we have several other "business districts" scattered around town.

As for homes, most are in subdivisions or sections scattered like pockets over a 5 mile N-S X almost-20 mile E-W distance. So we don't really have any urban area to speak of, and I call all of the rest of this "Suburb". My partner cuts that down to a 3 mile X maybe 15 mile "Suburb" area, and calls everything outside of that "Rural". No one has questioned either of us, yet.

It's a case of splitting hairs here because of the layout of the city and surrounding areas -- for ex.: you have a herd of cattle roaming Indian land on the east side of one of the main N-S routes through the middle of town.

I think you have to build your case for the area in which you are located. There are no hard & fast definitions that apply everywhere.
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Remodeling houses & helping tenants get ahead in life since 1983. Licensed Realtor since 2005. Addicted to REOs, BPOs, and working to expand.

LIMITATIONS: Until You Spread Your Wings, You'll Have No Idea How Far You Can Walk. - despair.com

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#274389 - 02/08/09 07:46 PM Re: URBAN......SUBURBAN? [Re: barb43]
Don Price (Pine) Offline
REO-BPO-R.E. Mod
Major Contributor

Registered: 03/12/08
Posts: 3330
Loc: Pinehurst, NC
The way I remember it is basically when you think urban think NYC - Downtown areas of LA, Chicago, Huston, etc - with high rise hi density populations.

Most cities probably fall under suburban - while most of what I deal with can be claimed as rural as the whole county is less then 85,000.
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Pinehurst, NC

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#274390 - 02/08/09 07:48 PM Re: URBAN......SUBURBAN? [Re: Don Price (Pine)]
CandyMan Offline
Major Contributor

Registered: 07/13/08
Posts: 2608
Loc: California
Let me add a little more meat to my previous post.....

The subject is located in a city of 100,000 plus population... built in the mid 50's....is surrounded by homes for at least a mile in every direction.....a few strip malls within a mile...major freeway within one mile...
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PONDERISM:

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#274391 - 02/08/09 07:50 PM Re: URBAN......SUBURBAN? [Re: Don Price (Pine)]
TB in TX Offline
Major Contributor

Registered: 08/16/07
Posts: 2813
Loc: X
I know the CW guide has clarification, and I think FARVV's does too. No one is using the same parameters, so sometimes you have to tailor your answer to the company. What I often consider suburban is considered urban by a particular company's thinking.

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#274393 - 02/08/09 07:54 PM Re: URBAN......SUBURBAN? [Re: CandyMan]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 6166
Loc: Vermont's North-East Kingdom
When challenged about the Suburban/Rural delineation, I tell them that if a Moose occasionally strolls down Main Street in a Village, or if you can smell Cow Manure being spread on the neighboring Farms, then that's still classified as Rural. That's regardless of the presence of a 3 Story SkyScraper in the Village.
_________________________
Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

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#274395 - 02/08/09 07:54 PM Re: URBAN......SUBURBAN? [Re: Don Price (Pine)]
BoneFish Offline
Veteran Member

Registered: 11/09/08
Posts: 551
Loc: REO - Capital of the World
If they don’t believe you when say its rural

tell them its on dirt road with cows in the back 40 ; that usually works ; if they still question it send them a pic of the barn ;

Seriously … in some areas … it can be tough to draw the line between were suburban ends and rural begins

if I think its marginal and a judgment call and I can get my comps all under 2.5 miles .. I’ll check the suburban box but then note in the comments that the subject is in semi rural area and I have never been q’c for that ..


now back to the actual question as for urban vs suburban

when in doubt I always pick suburban ..


Edited by BoneFish (02/08/09 08:06 PM)

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#274398 - 02/08/09 08:15 PM Re: URBAN......SUBURBAN? [Re: BoneFish]
jbt4re Offline
Major Contributor

Registered: 03/04/07
Posts: 2016
Loc: SWI
My definition is if the housing goes up, it's urban, if it sprawl out, it's suburban, if the houses are few and far between then it is rural.
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#274399 - 02/08/09 08:15 PM Re: URBAN......SUBURBAN? [Re: BoneFish]
barb43 Offline
Veteran Member

Registered: 08/01/08
Posts: 1017
Loc: SW Okla
What you described, CandyMan, fits my "Suburb" idea.
_________________________
Remodeling houses & helping tenants get ahead in life since 1983. Licensed Realtor since 2005. Addicted to REOs, BPOs, and working to expand.

LIMITATIONS: Until You Spread Your Wings, You'll Have No Idea How Far You Can Walk. - despair.com

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#274414 - 02/08/09 08:43 PM Re: URBAN......SUBURBAN? [Re: barb43]
TB in TX Offline
Major Contributor

Registered: 08/16/07
Posts: 2813
Loc: X
It fits urban by CW and FARVV standards.

Here is the blurb from CW:
Property Is Field (Neighborhood Description):
The following definitions are included as general guidelines ONLY. The reader is directed
to the more detailed and complete descriptions contained in the Addenda at the end of this
document for further clarification.
Rural: Describes a neighborhood that is generally outside a city limits and more
sparsely populated, as opposed to urban or suburban, with few service amenities. The
primary land use is typically agribusiness; often exhibit relatively slow growth with less
than 25% development.
Suburban: Describes a neighborhood that contains complementary properties with
denser population than rural but not typically as concentrated as urban areas; usually has
platted neighborhoods and more developed services and amenities than rural areas.
Urban: Describes a mature neighborhood with a concentration of population typically
found within city limits or a neighborhood commonly identified with a city.


NOTICE: LandSafe Policy Clarification
“Urban, Suburban, or Rural—Which is it?”
In addressing the issue of neighborhood classifications as Urban, Suburban, or Rural for residential
properties, Fannie Mae’s Single Family/Selling Guide generally notes, “An ‘urban’ location relates to a
city, a ‘suburban’ location relates to the area adjacent to a city, and a ‘rural’ location relates to the country
or anything beyond the suburban area.”1 Other excerpts from this same source provide more specifics in
this regard:
• If the subject property is located in a rural area that is relatively undeveloped, or one in which
properties often have large lot sizes, the BPO provider may have to go a considerable distance to
find comparables that can be used to develop a broker price opinion for the subject property.
• If the subject property is located in a suburban or urban area, the BPO provider will most likely
use comparable properties in the immediate vicinity of the property, as these areas are usually
more developed, and comparable sales are typically available in the subject’s neighborhood.
However, if the property is located in an area in which there is a shortage of recent truly
comparable sales—either because of the nature of the improvements of the subject property or
the relatively low number of sales transactions in the neighborhood—the BPO provider might
need to analyze and use as comparable sales properties that are not truly comparable to the
subject. (An explanation why such comparables are being used is needed in the latter case.)
• If the subject property is located in an urban neighborhood that has vacant or boarded up
properties, the BPO provider will need to look at comparable properties in the same
neighborhood to assure that any effect of the vacant or boarded up properties is taken into
consideration in developing the broker price opinion for the subject property.2
In more practical terms, Fannie Mae’s Handbook for Appraisers clarifies that in analyzing the
neighborhood and describing a location, the BPO provider should:
“Describe the location of a property in the context of your specific market. For example, we are
often asked how to describe a property located within the incorporated limits of a small town or city
located in a rural area. If the market reacts to the property as an urban location, identify it as urban.
Similarly, if the market would consider the property rural, identify it as rural. In either case, additional
narrative description would be appropriate so the underwriter understands the basis of your analysis
and conclusions.”3
Specifically addressing rural properties, Fannie Mae’s Handbook for Appraisers adds the following:
• In addition, Fannie Mae will accept comparable sales that are older than 12 months and/or farther
away from the subject property than is typically desired. This reflects the reality that property
sales in rural areas are often less frequent than in more populated parts of the country.
• A “neighborhood” in a rural area might be very different from one in a more heavily populated city
or suburb. You might define the rural neighborhood or market area as the town, city or entire
community the property is located in, or it may be based on the characteristics of the local
economy or the employment base for the community or market area.
• In cases where there have been recent sales in the immediate area and you choose not to use
them, explain why you did not consider them as appropriate comparable sales.4
In past discussions with Fannie Mae, it was reported that Fannie Mae used to underwrite suburban and
rural properties differently. Now, however, there is no difference from Fannie Mae’s perspective in this
regard in pricing loans. Moreover, Fannie Mae now views this issue only as a matter of consistency. As
such, Fannie Mae is not surprised to see appraisals for rural properties with the Subject featuring an
acreage site with private water well and/or septic system, as well as the Sales Comparison Approach
referencing more distant sale comparables. Alternatively, Fannie Mae typically expects to see appraisals
for suburban and urban properties with nearer sale comparables, featuring more homogeneity among the
19
properties and/or properties with generally similar city-lot sizes.
When one or more of the following characteristics exist, it may be indicative of a rural property:
• The neighborhood is under 25% built-up.
• The present land use is identified as 50% or more as vacant.
• Surrounding properties located on acreage.
• Comparable sales are located 3 or more miles away from subject.
• Dirt or gravel roads, and/or private roads.
• No curbs, sidewalks, storm sewers, and/or streetlights.
• Well and/or septic systems.
• Propane gas heating.
• The subject property is one acre or more.
• Agricultural influences.
• Zoned as agricultural, rural, or has no zoning.
• Local population is under 5,000 people.
• Employment centers, hospitals, schools, or retail shopping are not located in the nearby vicinity.
• Subject has outbuildings such as barn, stable, crop storage bin, silo, etc.
• Street scene or other photos reflect a rural area, such as crop fields, barn, outbuildings, no
nearby neighboring buildings, open vistas, etc.
LandSafe is depending on the BPO provider to recognize and report the true characteristics of the
Subject’s neighborhood, with the corresponding analyses being duly reflective and consistent
with those basic underlying locational factors. In short, merely report what you observe and
mirror what the market typically perceives to be the property’s neighborhood type.


Edited by TB in TX (02/08/09 08:52 PM)
Edit Reason: added info

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#274418 - 02/08/09 08:57 PM Re: URBAN......SUBURBAN? [Re: TB in TX]
CandyMan Offline
Major Contributor

Registered: 07/13/08
Posts: 2608
Loc: California
TB

It also fits my standards, or at least what I've been taught over the years. I found it strange that I got six different answers from experienced agents/brokers. I'm not trying to keep the forum in suspense, but wait till you read my post on their guidelines....I'm still having problems with this, mentally....makes no sense....hope to get some West Coast feedback....so far, the current posts, are nowhere's close to the info I was given.....don't get me wrong, they're all valid posts and I appreciate the feedback.


Edited by CandyMan (02/09/09 02:14 AM)
_________________________
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"Life isn't about waiting for the storm to pass........It's learning how to dance in the rain".

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