Advice on cliffs/safety issues

Discussion in 'General Appraisal Discussion' started by ANNA TODARO, Jul 1, 2011.

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  1. ANNA TODARO

    ANNA TODARO New Member

    0
    Oct 18, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    Virginia
    I am scheduled to do an appraisal for a property that is located on very high cliffs next to the water. I have completed a few other appraisals in the past few months for similar improvements on these cliffs. I had no issues because these were all for FHA and I extensively reported the issues.

    Here are the issues: These clilffs range from 100 to 250 feet high and have been deteriorating over the past 25 years. Some of the improvements have been moved to the other side of the road off of the cliffs others have their foundations protruding from the cliffs due to the deterioation. There is no ideas in the works to secure these cliffs. Public tax records give a significant reduction in land value due to the deterioation. The water is not accessible without putting in very steep stairs so it is basically waterview and beautiful at that. However, it is deteriorating at a rate that I cannot calculate (nor has an engineer been able to establish). When the hurricanes come through it increases the rate of deterioration which is what happened in 2003. Also just last fall, a woman was visiting and went out to sit on the ground and watch the sunset. The cliff gave way and she plunged more than 200 feet onto the beach below and had extensive injuries that put her in the hospital for a month plus rehab later. None of the properties have barriers to the cliff. Needless to say, FHA did not underwrite the loans.

    In my research, I found that in the prior year none of the properties purchased on these cliffs had conventional financing but mostly owner financed or cash. They also closed more than 50% below what other improvements were closing so I concluded it was from the cliffs.

    My dilema is this...this loan is not FHA. I am going to note the cliffs but do I write anything about safety issues? Second, some of the properties that sold last 12 months for 50% below other similar improvements not on cliffs are now relisted and for full price. Yes, not closed sales but recent, new listings and acting as if the cliffs are not a problem. The house I am appraising was built in 2008 and is very good in quality and construction and was purchased as if there is no problem with the cliffs. What direction should I go?

    PS I also know of some builders who are constructing more of these good quality homes on vacant cliff lots. I have friends who survey and they told me the builders were calling these "throw away" houses just because the of cliffs. They are planning to sell them for full price. They are even putting in in ground pools!
     
  2. CANative

    CANative Elite Member

    29
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Tell your client that you intend to condition the appraisal on a favorable geological report. The assignment will be cancelled.

    You don't want this one.
     
  3. Tony V

    Tony V Elite Member

    4
    Mar 29, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    New York
    Considering the extensive reporting that you have put together for the ""FHA"" ones, you can do the report using the same type of verbiage in the SITE portion of the report...
    I would mark the site box YES and explain the site issues..The cliffs would qualify as an adverse site condition..
     

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  4. TEL2002

    TEL2002 Elite Member

    1
    Jan 16, 2002
    Professional Status:
    Retired Appraiser
    State:
    Louisiana
    Ditto Canative
     
  5. stangtime

    stangtime Senior Member

    0
    Jul 19, 2009
    Professional Status:
    Certified Residential Appraiser
    State:
    Maryland
    We have similar issues here in Southern Maryland right on the Bay. Some of the cliffs in my neighborhood are falling in and some homes are less than 25 feet from the edge at this point.

    Do as Greg suggests. Or. Walk. Away.

    Dan
     
  6. CANative

    CANative Elite Member

    29
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Last edited: Jul 1, 2011
  7. stangtime

    stangtime Senior Member

    0
    Jul 19, 2009
    Professional Status:
    Certified Residential Appraiser
    State:
    Maryland
    Are those cliffs falling in? They look like they aren't going anywhere anytime soon.

    Dan
     
  8. William K

    William K Senior Member

    0
    Sep 21, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois
  9. CANative

    CANative Elite Member

    29
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    I've done so many oceanfront properties between Southern Sonoma County and Northern Mendocino County that have collected many geological reports and pretty much know which to pull the trigger on requiring a report. Most of the rockier areas are only receding at about 1 or 2 inches a year. Some near the village of Mendocino are sandy and unstable. So it depends on where the improvements are.

    I remember one I did with my dad when I first started. The cliff had gotten so close to the edge of the back deck that you had to kind of hang on to the rails while walking around. And it was planted in ice plants (succulents). I think we conditioned the appraisal on installation of a barrier fence.
     
  10. CANative

    CANative Elite Member

    29
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    http://www.californiacoastline.org/

    This site is a searchable database of high resolution photos of the entire California coast. They were taken from small planes and helicopters. It's an indispensible source of data when doing oceanfront properties. It's also fascinating.
     
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