How do you determine the price of one single family home on an entire block of two story homes?

Everything else being the same, year, construction exc, can I proportionately take the recent sold price/sqft of the two story and reduce it by the difference in square feet of the smaller home or does it not work that way? Another difference is all two stories are three car garage, and the single is a two.

Are you talking about ranch style vs. 2 story?
Expand your search area if that is the case to find the best match. Usually with 2 stories you have more above grade square footage than ranch style homes.
Locally, an additional garage stall adds about $3,000.

that would typically NOT be an accurate method for determining value for dissimilar construction types. price/sq ft is a very general method used to define a range of market values. also, you must understand that there is a difference between "price" and "market value." there is no single magic price, or market value for that matter. often, very experienced appraisers will arrive at different market value opinions.

Do you want to know the replacement price or a price you should pay? Selling price is based on major factor "motivation of the seller". Out of the last 100 or so listings I have had only 1 person said just sell it and sell it fast. Most sellers want it sold right away and for more than any other house on the block. If someone is motivated ie they need to move because of job transfer, or debt problems. They might be way more motivated and sell for less. It seems to me so many sellers want to fish for a high price they always think their home is the best of the best because of some feature.

IMO price is fuzzy logic based on emotion and motivation of seller and the buyer. I always chat with my buyers and say don't fall in love you will pay more. Most don't listen some do.

Assuming you're talking about a standard estimate of market value for a finished property...That estimate is a combination of comparing features, differences in lot and home sizes, and the inherent minimum value of owning a property of ANY size in the area.

I do use "per square foot" values in CMAs/BPOs to account for size differences in comparable properties. That's only part of the equation, though, so it's not a simple "the house is worth half as much as the house next door if the other house is twice as big" value.

People too often forget that the land has a certain base value of its own, and that needs to be accounted for. Thus, a smaller house will tend to cost more per square foot than a larger home (though when you reach the point of the luxury estate-type home, the price per square foot tends to climb again).

Thanks Andy and everyone else. That is correct, the land value, everything else being equal, will make a smaller home more $/sqft then the two story larger home since they both share the same acre of land. The house itself is the cheapest part.

Thanks

City sized lots (i.e. 8,000SF vs. 10,000SF) that are not acreage, will not make any difference in the value of an appraised property.

Depends on your market. 8000 vs. 10000 square feet will affect the appraised value here.

I have never seen a residential appraisal where the land was separately appraised from the improvements (unless it's acreage), except when citing tax assessors value of improvements and land. What does the appraiser use in adjusting the market value?
Normally having identical homes on lots that only differ by location, larger corner lot vs. inside lot, makes no difference here. Also, someone paying $10,000 premium to a builder, let's say for a corner lot, is not given additional consideration in a re-sale appraisal.

Just to clarify...Locally, the land is not appraised separately per se. The appraised value can be adjusted based on differences in lot size. In some neighborhoods a 2,000 square foot difference in lot size won't matter; in other neighborhoods (e.g., densely built areas such as beach communities), that will matter far more significantly.

Out of curiosity, I thumbed back through the my last half-dozen closed sales; four of them were adjusted for lot size, whereas only two of them did not adjust. The adjustments were between $3-6 per square foot, reflecting the differences in local land values. Obviously this was not significant enough to matter for two similarly sized lots, but once you get to a couple thousand square feet in difference, you could be looking at a $10,000 difference or more in appraised value.

I used to live on a corner lot. To this day I will never understand how having cars zooming by on two sides of you is considered a "premium" feature...

Could it be that you are thought to have at least one less abutting neighbor? Therefore, a bit more perceived privacy.

Also, don't the cars tend to slow down a bit due to the presence of an intersection?

My experience is that corner lots are valued by people who like to exhibit their possessions, cars, boats, home maintenance and improvements, lawn care, landscaping et cetera.

I've had people refuse to consider such lots because they thought they'd be uncomfortable always being in the spotlight . . . . and preferred to live in the shadows.

More people walking/driving by = greater privacy? Perhaps some people will think so, but I just don't get that theory.


In theory, yes. In practice, nope...

Having lived in Torrance and San Pedro I can understand the difference in value of living away or on the beach with an ocean view.
Here, differences are addressed in the sales grid adjustment expressed sometimes as “average”, “similar”, “same”, excellent” and quantified as a percentage plus or minus to the subject property. I would hope that not too many adjustments are required, but I can also understand the need for it if no good comps are close by.

That's just it . . . . they're passing by, and they keep on going.

But the abutters, why the abutters are like married to you . . . . there is no escape, they own you!

Now don't get me wrong, I do like people. I just like them very far away from me!

Pikes: Of course your comps should ideally require minimal to no adjustment. Lot characteristics (view, proximity to beach, incurable defects) are adjusted separately from size adjustments, but both do get factored in quite often.

Vermont: I'm not arguing that some people might prefer a corner lot. I'm just saying I personally don't get it. My neighbors have always made considerably less noise than constant traffic does.

"...are adjusted separately from size adjustments, but both do get factored in quite often."

Not in the last 100 or so appraisals I reviewed. I'm not trying to argue, but what you describe in quantifying adjustments in lot size by quoting a dollar amount is not done here. Size adjustment is part of the grid.

You're lucky. My neighbor's dog barks quite a bit which is very annoying. The cars going by the front of the house eventually becomes white noise that I only hear when I'm on my porch trying to talk on the phone or watch something on YouTube, lol...the dog barking however never fails to wake me out of a deep sleep...

I used to love my abutting neighbors who'd supervise my gardening over the fence, and then complain about my using the wrong herbicide insecticide or fungicide which caused their children to be retarded (just like their parents). In Mass, I had one neighbor on each side plus two to the rear . . . . all good people: good to get away from.

Some of them took it upon themselves to invite themselves over, just any old time they were so motivated . . . . just walk on in. Others were always inviting us over for dinner, relentlessly, until we returned the favor and allowed them to come in and inspect our house. I remember one couple who simply wouldn't leave until nearly 3 AM.

Or those who wanted to come over an commiserate because their Daughter just ran away with someone they met in an alley, (before the advent of on-line trysts), and others who wanted to safely sleep over because of some other kind of domestic dis-harmony.

But that's part of why I am where I am. I can't see any other houses, and in 25 years of living here, we've only had one(1) Trick or Treater (2011!). Human beans tend to stay away . . . . I like them that way.

gosh, you've never seen the Cost Approach (CA) in a residential appraisal?? LOL. you've been reviewing appraisals on planet Earth, or some other covertly inhabited planet/moon in our solar system?

not to defend the CA in residential appraisals...it's a complete farce.

"Or those who wanted to come over an commiserate because their Daughter just ran away with someone they met in an alley"

good concept for a reality tv show.

".....gosh, you've never seen the Cost Approach (CA) in a residential appraisal?? LOL"

Is that what he was talking about? That was not my impression.
I know the different appraisal valuation methodologies (afterall, the appraisals I review cost from $3,500-$8,000 a piece). Almost all appraisals I review are the sales comparison approach, because most of the time it's the only approach that gives a true indication of market value.

I wasn't talking about the CA (though I've seen them used more often as secondary methods than I'd expect). All I was saying is that, around here, lot size tends to be done--as part of the grid, as Pikes noted--by adjusting for a specific dollar amount rather than as a percentage.

well, inclusion of the Cost Approach has been a common lender requirement in residential appraisals for many years. anyone who performs or reviews res appraisals knows this.

"well, inclusion of the Cost Approach has been a common lender requirement in residential appraisals for many years. anyone who performs or reviews res appraisals knows this."

Are you talking about a new hybrid method according to USPAP? Please explain.

When it comes to determining value I totally dislike price per square foot. Just treat it as sort of a guide line, all the factors come into play in real value, lot size, lot location, street conditions, house size, age house condition, and all the other factors you have grown to love and hate.

Works best in a large cookie cutter community, in my chosen normal market area it is only a guide line at best.