I am appraising a condo where the mortgage is held by a small bank in the developer's portfolio. The original appraisal was for $1,623,424 a few years ago. The bank requires that these appraisals be redone every few years. This is a 3,905 sq. ft. very upscale penthouse with a private elevator. It is on the fourth floor of a four-story building with a woodland view, but is just a five minute walk to one of the largest shopping malls amd upscale business centers in the greater Atlanta area. Location is excellent. The value of the condos in the subject building have declined as out-of-town buyers have walked away from what they thought were rental investment properties. The original prices were from about $750,000 to $1,700,000. After a series of foreclosures, the units have been selling for $200K - 300K and a few lower. I have a comp less than a mile from a competing building that is $2,024,300. It is almost identical to the subject unit, but has no elevator. Other than that, there's nothing anywhere close by. Also, taking into consideration the state of the subject condo, I just don't know where to start to do this appraisal. The workmanship is excellent and this five year old unit which is owned by the developer is like new, as he has hardly ever been there. I have not ever been faced in 28 years with such a challenge. Could you give me some guidelines?
What you are describing is happening in many market areas throughout the country. What makes your question difficult is you offer no explanation of why the one comparable sale seems to be so different from the rest of the market in which your property is located. Your appraisal has to be based on all of the known comparable sales in your market area from which you select the ones that you believe are most comparable. What the subject sold for historically must be reported, but has no bearing on its current value. You have to make a judgment as to how much weight to give this one sale that seems to differ from the rest of the comparables in the subject condo complex. At a minimum, you must verify that sale and try to find out from your verification source(s) why the buyer was willing to pay so much money.