HBU: SFR with 10 acres of almonds

Discussion in 'Appraisal Review' started by Juanito, Oct 21, 2011.

Thread Status:
Not open for further replies.
  1. Juanito

    Juanito New Member

    0
    Jul 30, 2008
    Professional Status:
    Appraiser Trainee
    State:
    Oregon
    So I have an assignment to review a standard 1004 for a mortgage lending transaction. Subject is a generic 2300 SF SFR on 10 acres, 9 of which are an active almond orchard.

    Appraiser states, "subject is an income producing farm with 9 acres of almond trees."

    He goes on to state that "the subject's almond orchard is not valued in this appraisal report as there is no market reaction for this feature." He also does not value an outbuilding (standard pole barn/machine shed)--simply ignoring it.

    Appraiser marks subject as highest and best use as improved/present use.

    Would you consider this acceptable? It appears to me that while subject may be highest and best use as improved, appraiser did not value as such, unless one can justify the comment that there is no market reaction to the almond orchard.
     
  2. Randolph Kinney

    Randolph Kinney Elite Member

    14
    Apr 7, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    9 acres of almond trees is not worth that much, neither is 9 acres of avocados, not in California. That's like a hobby farm.

    How much income does the production of almonds return, net?
     
  3. Juanito

    Juanito New Member

    0
    Jul 30, 2008
    Professional Status:
    Appraiser Trainee
    State:
    Oregon
    The appraisal does not address anything about it aside from what is stated above.
     
  4. Randolph Kinney

    Randolph Kinney Elite Member

    14
    Apr 7, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Well, what do you show? How can you make a case on HBU if you don't do the work?
     
  5. CANative

    CANative Elite Member

    30
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    9 acres of almonds would probably gross at least $50k per year. Maybe more.


    Yes. What's the alternative use? Tear the house down to plant another acre of almonds?
     
    Last edited: Oct 21, 2011
  6. Randolph Kinney

    Randolph Kinney Elite Member

    14
    Apr 7, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    California
  7. OSU Beavers

    OSU Beavers Elite Member

    6
    Jan 10, 2007
    Professional Status:
    Licensed Appraiser
    State:
    Oregon
    Sounds like the appraisal was Made As Instructed.

    The real question is do you say All-Monds or Ah-Mands?
     
  8. JRS at OBX

    JRS at OBX Elite Member

    2
    Jun 13, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    All-monds.
     
  9. Juanito

    Juanito New Member

    0
    Jul 30, 2008
    Professional Status:
    Appraiser Trainee
    State:
    Oregon
    No alternative use--I have no doubt that it is highest and best use, the question is why the appraiser did not appraise as such, ignoring the almond income.
     
  10. OSU Beavers

    OSU Beavers Elite Member

    6
    Jan 10, 2007
    Professional Status:
    Licensed Appraiser
    State:
    Oregon
    Best guess: Crops were considered to be personal property and not valued.
     
Thread Status:
Not open for further replies.

Share This Page