Neighborhood Comparables

Are there comparable properties within a reasonable distance? It's never good to be king of the neighborhood but if there are similar houses nearby you should be ok.

quote:

---

Are the other houses in the neighborhood new? Will yours have more square footage or better amenities?

---

Yes in the subdivision there are plenty of new houses just not on my road. The developer just developed this land at the end of an existing road and I would be the first on the land.

quote:

---

Why would yours be more expensive? Why would an appraiser value it higher?

---

I am not sure it would be more expensive. I am in the process of picking out plans and really don't have a good basis on cost per sq foot. I was thinking in the $125 range but may be totally off with that number. Again in the very early stages of planning.

quote:

---

Hope that helps!

---

Nope big help. I went into this with some assumptions on building cost and apparently off on that. Went to parish assessor website and looks like similar homes (2400 sq ft) are priced about $110 per foot. I know there are many variables such as upgrades but this seems to be the median for this area.

Actually looking on our parish assessor website is a huge help. You can look any property up in the parish and what they paid for land and home.

Need to be comparing dollars per square foot.

Just some thoughts:

Appraisers are typically lazy and cautious. They'll going to base your appraisal off of price per square foot comps mainly. This is done by heated "living" area only. So 120$/SF granite counter tops or something like that is not going to be seen as an added value. So goes for most other amenity levels; floors, etc.

Don't be the biggest house in the neighborhood for sure, and try to not be the absolute smallest.

Prices per square foot goes down as the total living area goes up. So your comps need to fall closely in line with the square footage, not just neighborhood. For example, a 1500SF house @ $150/SF does not translate to a 4000SF house appraising for $600k.

Just my thoughts, take them FWTW

Thanks a bunch to everyone offering advice. Looks like in the West Monroe area you can get some good homes for 110-120 heated sq foot.

Don't put much stock in what the assessor has on the parish website. Especially if any of your neighbors self contracted. I've got homes in my neighborhood where their appraised value, according to tax log is $400k and they are currently selling for $650k.

Your home will never appraise for its true value if its the biggest/best amenities in the neighborhood. You have to keep the size and finishing amenities consistent for the neighborhood you're in if you want actual value of your home to be reflected in its appraised value.

Example: Building a two story home in a neighborhood full of single stories is going to depress the overall value of your home, even if its the most valuable/biggest/best. This is because folks looking for a two story home aren't looking in a neighborhood full of one story homes. This home becomes a "White Elephant" property within the neighborhood and its true value is depressed as a result of being out of place within the area it's built in a sense.

Appraisers are lazy. They are cautious. But underwriters for lenders who may loan you money for your home and/or a buyer to take it off your hands down the road have access to look up recent sales in the neighborhood during the process of reviewing appraisals as part of loan applications they're underwriting. I've seen them ask for multiple additional comps to force the appraiser into utilizing more realistic comparable properties which adjust homes downward towards the value they feel is appropriate based on their opinion.

And ultimately, the appraisers opinion does not matter. The Underwriter's opinion does. Because they are the one with the approval/denial power in the process.

Or course in cash sale examples, this entire discussion is moot. But that's a tiny fraction of situations.