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Friday, May 10, 2013

Appraisers Need Help with Rural Properties

To the general populace, Los Angeles is the epitome of an urban environment. Hence, 'Los Angeles county rural properties' is an oxymoron. Appraising property in the custom and equestrian neighborhoods of Old Agoura, Cornell, Triunfo and Lobo Canyons, Malibu Lakeside, and others is something NOT familiar to all appraisers in Los Angeles county. Often, appraisers in these areas are unable to find comparable sales to justify the purchase price of the property because they are adhering to guidelines that do not apply to rural properties.  In order to do a fair evaluation, the appraiser will need to be cognizant that the guidelines used to evaluate 'rural' property are a departure from those for suburban guidelines.  Sometimes, the appraiser just needs to identify the subject property as a rural property.  

What makes rural property different from suburban homes so far as Freddie/Fannie/FHA/HUD is concerned?

1) Rural neighborhoods generally have larger geographic boundaries.

2) It is not unusual for rural neighborhoods to have slower growth rates

than urban properties.
3) It is often acceptable for rural neighborhoods to have longer marketing times.
4) It is common for mixed uses (especially agricultural) to be present in
rural neighborhoods.
5) The geographic boundaries for rural properties may be
much larger than those associated with urban and suburban locations.
It is this last difference (5) that allows appriasers to use comparable sales outside the immediate neighborhood - and this fact will sometimes save the day in a market where there is a shortage of sold inventory.
Posted at 1:07:02 AM
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