Can We Use a Burned House As a Comp?

Thankfully where I live we just had a lot of debris from trees. I am in Jacksonville, Florida, but some off my friends had flooding in their homes. They are still cleaning up and repairing their homes from the flood. Very sad. I am thankful that no one was hurt that I personally know. Things can be replaced but not lives.

Cynthia Larsen - I agree with you - and the loss of community for the "survivors" will be horrific

     The appraisers, and the lenders, are in a real quagmire on this.  Not just for a burned house as a comp, but when an entire neighborhood is destroyed, how do you determine value?

    BTW, slightly off topic, but please see my question on the ActiveRain Q&A board about IRC Section 1033 Tax Deferment for Involuntary Conversion, including real estate destroyed by Fire (not the same as a Section 1031 exchange).  You may be able to pass that knowledge on to people who are going to just "cash out" of their destroyed property, and incur a taxable capital gain in the process.

There are so many catastrophes striking so many places. I pray for everyone having to go through this kind of horror. Thanks for sharing. 

It is a grim reminder that mother nature is bigger than all of us. Having entire communities scorched to the ground is apocalyptic. What do people do if they are homeless?  How does it affect the economy, and how do they go to work or school every morning?

For those of us who don't live in areas where fires such as this take place, it's not something most of us have considered. I know I haven't.

I would say in a case where there are no other comps, it would be an extreme to use a burned house as a comp for the obvious reason that it can't be viewed. Perhaps the industry standard will allow for the distance from the subject property to be expanded to a closest similar property in a reasonably similar valued community.

Prayers to all of those impacted by this devistating fire.

Cynthia- Even with hurricanes here, at least for most of us, our homes are still here after it passes- maybe without a roof or water inside but nothing like the devastation that CA is seeing with the fires. 

The question you posed is such an interesting one and I hope that down the road, you'll post about how this question was answered!!!

So sad that this is even a question. Congrats on the feature!

Nice to see you back, Cynthia, albeit writing about the tragedy that happened up North. I sure hope these people are put right soon and the rebuilding begins. 

What an interesting question to ponder.... the obvious answer seems to be "NO" yet the question is not as simple as it seems.  Thanks Fred Griffin for the additional insight...

If you are appraising a burned house, then other burned houses would seem to be good comps.

I hope they are going to build it better than the ones that burnt down. Like maybe a concrete and brick house.

As an appraiser I have used sales that have been torn down to make way for new construction.  Of course this is in a neighborhood that was not affected by TOTAL destruction.  I would think that you can, but I would use it to help support value, not as a hat hanger...

I will think about the question further as I hate knee jerk answers/reactions...

You do ask a damn good question...

That would be like me substituting my age 30 weight and health data for my 62 physical exam....

Good question - and I sure don't know the answer. Another question will be "How long will it take to rebuild these homes?" From what I'm seeing on the news, the shortage of construction workers is a real concern right now. Skilled labor was in short supply even before all of this year's destructive events.

Having once lost my home to fire, I can definitely feel for all the victims. It takes years before you stop reaching for a favorite sweater or that pan that's just the right size for something you want to cook.

Cynthia, I used to live in Sonoma County and have been horrified by what's happened.   I can't imagine the lingering PTSD that will affect thousands of people, let alone the sudden homelessness and financial distress in an area already plagued by high rents, lack of housing and low inventory like where I practise.    You've post a great question; please let us know how the problem is addressed.

As agents- we see the effect first hand on how influence a "thing" such as a home impacts our clients. Having shelter is one thing- but the emotions of losing a home are huge. I am sure most of us have had clients break down crying over the purchase or sale of a home. I hope the residents of these neighborhoods are able to rebuild their homes and the lives they had previously.

Hi Cynthia Larsen  You pose an interesting question. Going to check here as a similar question could exist with hurricane demolished homes. Sending blessings your way.