Sacramento Appraisal Blog

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How much is a golf course location worth?

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How do you know what a golf course location is worth? I had a real estate agent ask me recently how much value appraisers give to a golf course lot. My answer: What does the market say?

golf course location - by Sacramento Appraisal Blog

Let me walk you through some of the available options for determining what a golf course location is worth. There is no standard dollar figure or value percentage that applies to every property, so an appraiser must research some of these steps to come up with a credible value.

  1. Guess: This isn’t a good option.  🙂
  2. Golf sales vs non-golf sales: This is really the first step. Look at golf course sales vs non-golf course sales to see if you can extract a percentage amount for what the market paid for the golf course location. If a golf course lot sold for X amount and an identical standard lot (not on the course) sold for $50,000 less, then there is your adjustment. Make sure you are also considering differences like condition, upgrades, and lot size though.
  3. Older Sales: But what if there are no recent sales? One of the best things to do is to look at older sales over the past few years until you find a few golf course transactions. Then compare these sales to other non-golf course lots at the time. What was the difference in value between the golf course sales and standard lots? If you can extract a price difference percentage at the time, you can then apply that difference in the current market. Granted, something could have changed about buyers’ perceptions for today’s market, but assuming buyers view the neighborhood the same as they used to, this can be a great way to help justify a value or price difference for a golf course lot.
  4. Subject Sale: If the subject property sold previously in the past 10 years or so, this can be golden because you can analyze other sales at the time to see how buyers responded to the subject property at the time.
  5. Find Other Golf Course Neighborhoods: You can always try to find a competitive neighborhood and then extract a location adjustment out from that neighborhood to apply to yours. However, a competitive neighborhood might be really far away, and the real issue becomes whether it is truly similar or not.
  6. Conversation with Local Pros: Talk to local real estate professionals who really know the market, explain your situation, and ask them questions. I find agents who specialize in neighborhoods to be an incredible resource when it comes to knowing the idiosyncracies of a market (they’re often spot on – though not always).
  7. Be Aware of the Course: Be aware that the location on the golf course might matter. Does your property have constant broken windows from balls or are you located in an area with less ball traffic?

I hope that was helpful. Anything else you would add? If you’re in real estate, what have you learned about golf courses?

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Is there a value difference between a one and two-story house?

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Have you ever wondered if there is a value difference between a single-story house and two-story house? Is it proper to list your home at the same price level as a similar-sized house that has one extra level?

I asked some Sacramento area real estate pros to pitch in a few thoughts, and here is what they said:

Sue Galster - RealtorSue Galster – Realtor/Broker: By default, a one-story house appeals to a wider range of current home owners and future buyers than a two-story house. Rarely if ever do I meet a buyer who says they need or prefer a two-story house, but it’s quite common to hear that a one-story is a non-negotiable. With the aging of the Baby Boomers and people living longer, I believe more home owners will require a one-story house for health and safety reasons so that stairs aren’t an issue in their lives.

Steve Ostrom - RealtorSteve Ostrom – Realtor/Broker: Over 30% of my clients say they must have a one-story. Another 40% say they prefer a single story. That is around 70% targeting single story. The number one reason they state is that they are getting older and worry about having to climb stairs later in life. The second reason is energy costs of a two-story. My reason is that my wife has a history of falling down stairs. Regardless of the reason, there is much more demand for single story homes than two-story, and supply and demand ultimately determines value.

Whitney Johnson - RealtorWhitney Johnson – Realtor: I do think that if you are willing to purchase a two-story home on a same or similar lot size as a single story home, you will obviously get a larger lot, which could be a benefit. We have never taken a number of stories into consideration when comping our properties. We tend to go off the basics, bed, bath, sq ft. When I asked around office it was pretty split.  Some would take a single story all day long and have a smaller lot. The other half would prefer a two-story larger lot. Both sides agreed the pricing should be the same.

Jeff-Grenz-Sacramento-Real-Estate-BrokerJeff Grenz – Realtor/Broker: Single level homes are always in high demand. They typically reach every end of the market from entry-level to empty nester…. so when demand is hot, the single levels typically go first, and when demand is slack, again, the single levels typically go first, leaving more excess inventory in the multi-story homes – unless the prices get adjusted to make multi-story homes a better buy. It actually costs less to build a two-story home vs a single level in most cases, given the same square footage and amenities, so builders are often able to balance the higher demand for single level homes with the better pricing for two-story homes. So if square footage is your measure of “value” than a two-story home, as efficiently shaped as possible, will give you the best “value” – a definition of an efficient building shape? Think “salt box” like the east coast. If accessibility is more valuable, and IMHO, higher demand for resale, then single levels are the best “value”.

Craig DunniganCraig Dunnigan – Realtor/Broker: I have always held the opinion that single story homes sell for more money than a two-story of equal size….this is based on observing sales trends for over 35 years…. my opinion was confirmed today at our sales meeting. Our agents unanimously stated that single story homes are in higher demand and sell for more than most two-story homes…. The aging “baby boomers” don’t want to be walking up and down stairs. The bottom line is “supply and demand”…..there is not a vast supply of single story homes coupled with a high demand!

My take as an appraiser: I tend to compare single-story with single-story and two-story with two-story because there is sometimes (not always) a difference in value. Unfortunately there is no universal value adjustment given for a variance in stories because it really depends on the neighborhood as well as supply and demand. I have noticed among higher-end tract homes that buyers typically pay a premium for single-story units. As an example, a buyer would very likely pay more for a 2800 square-foot single-story house than a 2800 square-foot two-story house with similar updates. Whatever the case, it’s usually best to start a market comparison by using single-story comps when appraising a single-story house and two-story comps for a two-story unit. This tends to give us the best picture for value because we’re comparing “apples to apples” so to speak.

Question: Is there any price difference in your mind? I’d love to hear your take in the comments below.

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Why are there bottles full of urine in this house?

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Let’s touch on a darker side of real estate today. I’m really not trying to gross you out, but things like this are sometimes a reality for agents and appraisers when inspecting dank and filthy distressed properties. This house had bottles full of urine throughout the front room. Why is that?

Win a $5 Starbucks Gift Card: Put on your thinking cap and let me know your thoughts. There is an answer that may be obvious to some, but the most creative response below or on Facebook wins the gift card.

bottles of pee in house

Thank you to Realtor Anne Graviet for letting me share this photo. This certainly illustrates the less-than-clean side of real estate, doesn’t it? For reference foreclosures only represent about 12% of the market right now in Sacramento County compared with 73% of the market four years ago. I always take a shower immediately after inspecting houses like this.

If you have any questions or Sacramento home appraisal or property tax appeal needs, let’s connect by phone 916-595-3735, email, Twitter, subscribe to posts by email (or RSS) or “like” my page on Facebook

Does a property with a flat roof require a roof inspection for an FHA loan?

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It depends. A roof really only requires an inspection during an FHA loan if the appraiser or underwriter calls for an inspection. This goes for both flat and pitch roofs. Let’s read a bit more below.

flat roof inspection for an fha loan - by Sacramento Appraisal Blog

Straight from HUD on whether an appraiser will automatically require a roof inspection on a flat roof (Mortgagee Letter 05-48):

FHA-photo-by-Ryan-LundquistFHA no longer mandates automatic inspections for flat or unobservable roofs. In the appraisal report the appraiser will note any evidence of deterioration of roofing materials (missing tiles, shingles, flashing). Deteriorated roofing materials include those that are worn, cupped, or curled. If the roof is not observable, the appraiser will look for and include in the appraisal report any telltale signs of roof problems on the interior, such as damage or water stains to the ceiling area of a room or closet. The appraiser must note in the appraisal report that he/she could not adequately observe the entire roof area (state which area(s) were unobservable). Based on the information reported by the appraiser, the lender’s underwriter will determine whether or not a roofing inspection is required.

Summary & Attics: All things considered, a flat roof on any portion of a house won’t necessarily trigger a roof inspection, but an inspection may be required if there are signs on the interior or exterior that point toward roof failure. Remember, a roof has to have at least two years of remaining economic life for an FHA loan. On a related note, the appraiser is required to do a “head and shoulders” inspection of the attic, but when the roof is flat and there is no attic, this requirement obviously doesn’t apply.

I hope this was helpful to answer some of your questions. You can check out other FHA appraisal articles I’ve written, and definitely comment below if you’d like.

Anything you’d like to add or ask?

If you have any questions or Sacramento home appraisal or property tax appeal needs, let’s connect by phone 916-595-3735, email, Twitter, subscribe to posts by email (or RSS) or “like” my page on Facebook

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