Types of Real Estate
Single family homes
Single family homes consist of both attached and detached homes with only one dwelling unit. When doing a single family home appraisal, the appraiser is primarily looking at the following characteristics that affect value:
- Site size
- Bedroom count
- Bath count
- Size (GLA – gross living area)
- Basement size
- Basement finish
- Energy efficiency
- Outdoor spaces
There are of course other factors that could affect value, but all of the above are addressed in most single family home appraisals.
Condos or condominiums is a type of ownership and is not always a unit in a building. It may be a semi-detached townhouse or a complete detached home. In a condo appraisal, the appraiser is only valuing the space between the paint and any storage or parking that is deeded to the unit. So, unlike a single family home appraisal, the appraiser is not valuing the lot size. There are other factors that come into consideration with condos, such as the floor level, elevator building, or a walk-up building. Views can vary dramatically in condos, especially in Manhattan, where owners pay a premium for a view of the Hudson River, Manhattan skyline, or Central Park. Another important factor when appraising a condo is building. Some buildings command a premium over other very similar buildings. This could be due to financial condition of the building, condition of the building overall, amenities, major issues with the building, or high demand for the building.
Coops (co-ops) or cooperatives are a different type of ownership in real estate. With coops, the owner owns shares in a corporation that owns the building. They share many of the same characteristics as condos and typically are adjusted in appraisal on the same or similar characteristics that condos are adjusted for.
Land typically consists of only the land with no major dwelling on the property. There may be landscaping, a driveway, or water taps, but usually is raw land. Land is valued on based on these characteristics:
Minor improvements to the land such as taps, curb and gutter
They are typically more difficult appraisals as there are a low number of raw land sales in an urban or suburban area like New York.
2-4 unit properties
2-4 unit properties consist of just that, 2-4 units. They are usually purchased as investment properties in New York and rented out. However, the owner could live in one of the units, while renting out the others. When appraising a 2-4 unit property, the appraiser is valuing many of the same characteristics that single family homes have, but certain characteristics are valued differently because they are more important, such as bedroom count. Unit count is also a very important factor to consider.
There are three approaches to value: sales comparison approach, cost approach, and income approach. The above is mainly referring to the sales comparison approach as this is almost always used when appraising types of properties above. The cost approach is useful when the subject is new or a few years old. The income approach can be useful for appraisals of investment properties.
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Madison & Park Appraisal
Madison & Park Appraisal is a residential appraisal firm in New York. We do residential appraisals of single family homes, coops, condos, 2-4 unit investment properties, and land. We have performed over 7500 appraisals over the course of 15 years.