Great write job Mike !

In 1971 when I was an agent our office had a “white elephant listing” for $65,000 in a solid $30,000 neighborhood. It eventually was reduced to $57k and a couple years later it remained unsold when I listed it at another brokerage for $50K.

It had a 3/4 bath addition and a semi subterranean laundry room addition to the original 1,200+- sf 3 br tract built 1950’s ranch home. [easy appraisal, right?] It also had a detached by fully enclosed 35 foot long pool with brick barbecue; a 15 x 20 family room behind the 2 car garage [more challenging, but still not exceptional].

Sticking a key into the garage wall caused a 4′ x 8′ portion of the concrete garage floor to open vertically by an electric motor and counterweights, leading down an industrial steel staircase to a steel door. Behind that steel door was a bomb shelter of 10′ x 12′ with a 25 yard long rifle range extending under the driveway, capable of handling big bore weapons. It was sound proof and separately air conditioned with special filtration that I never did understand to keep radiation out. I showed the house to a deputy sheriffs wife and told her that if she didn’t bring hubby back to make an offer on it that day, I was going to make one myself. The owner heard me and to make a long story less so, I bought it for $40k (not 50) as a VA No down-No closing cost house and earned $1,500 salesman & listing agent side commission. VA appraiser had NO trouble appraising it for $40k.

It cost the architect-owner $65k to build it out. Sale price $40k. Super adequacy was demonstrably $25k. Contributory value of ALL the amenities was only $10K. The appraiser KNEW from its over two year listing history it was not worth $65k or even $50k. Neighborhood comps told him it HAD to be more than $30-$35K. So his only issue was where in the range from $35k to $50K did it fall? He DID have the subjects sale itself as a guide. In the end I think all he did was add a nominal premium for covered pool and treated the extra bath, laundry room, detached family room and 375 sf rifle range plus 120sf bomb shelter at its end the same as potential “comparable” sales living area and then found a couple near 1,500 sf to 1,600+- sf sfrs to bracket, and he called it done.

Appraisal isn’t rocket science. The appraiser merely replicated the actions of the marketplace and explained the results LOGICALLY .

“Please include three comparable sales that have taken place within the past 6 months within one block of the subject.  Please also include 3 comparable listings with safe rooms within the 1/2 mile of the subject.  Please include a comprehensive breakdown of the cost of building this room and illustrate the value differential should a future homeowner wish to remove this amenity.  As is typical of our requests, please forward this information to us within the next 8 hours.”