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Do I care about this red flag on the property?

Discussion in 'Urgent - Help Needed' started by Scott R Marshall, Sep 21, 2011.

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  1. Scott R Marshall

    Scott R Marshall Senior Member

    0
    Dec 14, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    New Mexico
    Here's the scenario. In doing my general research I noticed there was a flag on the property by the local municipality. This is in the same database I utilize to confirm acreage for properties in the area and it caught my eye. The subject is on a private well. The local municipality requires wells in the area to be permitted. The last permit for my subjects well expired in 2008. Per the local municipality, while the property can transfer ownership, no additional permits for anything regarding the subject property will be issued until the well permit issue is resolved. I do not know what will or will not be required in order to get a current well permit and I do not know if getting the permit is complicated by the fact that public water service is available at the lot line.

    So my question is do I care? Or better yet, would you care?
     
  2. CANative

    CANative Elite Member

    204
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Condition your appraisal on an EA.

    Edit: Discuss with client prior to doing this.
     
  3. Mr Rex

    Mr Rex Elite Member

    176
    Jan 12, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    So my question is do I care? Or better yet, would you care

    I suspect the average market participant would be interested in if they have a "legal" source of potable water.
     
  4. Peter LeQuire

    Peter LeQuire Elite Member

    102
    Jan 3, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    Tennessee
    I would care. The way this is worded, it sounds as if the municipality must periodically permit existing wells. (Or does it reflect the life of the permit to install the well? Does "resolving the permit issue" means reissuance of the permit or confirming whether the well was completed within the life of the permit?) I don't know whether permitting the well is to test the quality and flow of water, or something else. If there is any question about water supply to the house, I think I'd confirm whether the house could be connected to public water and if it can, adjust my appraisal to reflect the cost to connect (plus whatever hassle factor might be appropriate). I would wonder what would have to be done to establish marketability of a house without a permitted water supply, if that is implied in the permit situation.
     
  5. CANative

    CANative Elite Member

    204
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    The usual problem in these situations is that you're not going to get a ruling by the municipality in the time frame appraisals and loans take.
     
  6. Scott R Marshall

    Scott R Marshall Senior Member

    0
    Dec 14, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    New Mexico
    Found out a bit more. The owner applied for a well permit in order to drill a well. That permit is normally good for 1 year during which time a final inspection on the well is performed, resulting in a "permanent" well permit. In this instance, the borrower never called for a final inspection to be done on the well, with the result being the 1 year permit expiring.

    So now does this change things?
     
  7. Mr Rex

    Mr Rex Elite Member

    176
    Jan 12, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    I bet he gets a kick out of drinking outlaw water.:)
     
  8. CANative

    CANative Elite Member

    204
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    He needs to start the permitting process over again. Your assumption for purposes of appraisal is that he complied with installing a proper well and that the water is good and of sufficient quantity and that the permits will be issued and everything will be hunky dory.

    Extraordinary Assumption.
     
  9. Peter LeQuire

    Peter LeQuire Elite Member

    102
    Jan 3, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    Tennessee
    Das it!

    There is the possibility that the municipality uses its permit process as a revenue generator. It would be a matter of interest to me whether it would be cheaper to connect to public water than to get the permit. Other things equal (which I know they never are) I would think that public water might be a more reliable water source and cheaper overall than maintaing a well.

    But CAN has it right for the appraisal.
     
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