Real Estate Appraisal Forum

appraisersforum.com logo
The Premiere Online Community for Real Estate Appraisers!
 Fastest Way to Find a Real Estate Appraiser Enter Zip Code:
 
 
Go Back   Appraisers Forum > Real Estate Appraisal Forums > General Appraisal Discussion
Register Help Our Rules Calendar Archives Mark Forums Read


Closed Thread
 
Thread Tools
  #1  
Old 10-17-2010, 12:00 PM
jlabauve's Avatar
jlabauve jlabauve is offline
 
Join Date: Feb 2009
State: Louisiana
Professional Status: Certified Residential Appraiser
Posts: 921
Default Help me be sure I've got my head on straight

I received an appraisal request from a local attorney, and I was recommended by the judge in this case because I have testified before her numerous times.

After reading the particulars of this property, I believe that it will be almost impossible, and maybe completely impossible to perform a "market value" valuation. I am looking for any and all feedback from you guys before I respond to the attorney. I am 99.999% sure I am not going to accept this assignment, unless you guys can educate me that my thinking is incorrect, AND I get a gigantic fee.

The facts:
1) property is a frame/pier structure which was purchased and moved onto a third party's land, then extensively remodelled. Also, they made some site improvements on the other party's land, such as a barn, horse arena and fencing. Just to make it clear - they do not own the land that these improvements sit on.

2) Now they are getting a divorce, and one party apparently has a "market value" appraisal, which I have not seen (by choice). The attorney states that the sales analyzed in this appraisal are properties with land and the appraisal includes a land value !?!?!!

3) The attorney wants a "market value" appraisal.

4) Research in my local mls (going back to the beginning of time) shows a total of 4 sales of houses to be moved. Three of these transactions took place from 1989-1991, and one in 1999. However mls data does not contain information regarding the condition or photos or vendor/vendee of any of these sales, and the Realtors don't even remember them. To my knowledge, there is no other central place to locate sales of this type, although maybe house movers might be able to point me toward some sales.

My thoughts about this assignment:
1) Just to state the obvious, you can't just deduct a site value from similar sales to obtain market value. You would need verified transactions of arm's length sales of properties which were sold "to be moved."

2) The house is not real estate, it is chattel, since it is not legally tied to its own parcel of land.

3) Same thing with the site improvements (barn, lighting, fencing, arena). There may be some salvage value to these, but I've got no idea how to arrive at that number. Or they may have some value to the property owner. But in my mind, only having one potential purchaser screws up the whole idea of market value. Question: can you derive a market value is there if only one potential purchaser??

4) I suppose I could do a depreciated cost approach, but that ain't market value.

OK - go!
__________________
"It is unwise to be too sure of one's own wisdom." Mahatma Gandhi
Sponsored Links

  #2  
Old 10-17-2010, 12:21 PM
DTB's Avatar
DTB DTB is offline
 
Join Date: Jun 2004
State: Illinois
Professional Status: Certified Residential Appraiser
Posts: 7,918
Default

Quote:
Originally Posted by jlabauve View Post

1) Just to state the obvious, you can't just deduct a site value from similar sales to obtain market value. You would need verified transactions of arm's length sales of properties which were sold "to be moved."


I would begin with similar sales with land, back out the land cost, moving costs and the PITA/ EI factor to get in the ballpark.

You will be closer than the other appraisal and I doubt your value could be disproven.

Good luck.
  #3  
Old 10-17-2010, 12:24 PM
TEL2002's Avatar
TEL2002 TEL2002 is offline
 
Join Date: Jan 2002
Location: Louisiana
State: Louisiana
Professional Status: Retired Appraiser
Posts: 8,184
Default

Is there a long term lease for the land?

I assume the amenities are not movable, is there an agreement with the landowner to pay for those amenities when the couple leaves.

This is one screwed up mess, why do people put themselves in such lousy situations?

I think all you are going to have is the value of the movable buildings (less the cost of moving, new foundation/piers, setup, and EP).

Once I checked into having a house I own in IA sold and moved. Small 832 sqft...but 10 miles from anything over gravel roads. I could only find one person interested and he wanted to knock the value of the building down about $45000 for his expenses & work.

Oh yeah, make sure your fee is a healthy one, you will earn it. But I agree with DTB, who's gonna call you wrong? I think that judge just handed you future business for a long time...turn it down and you may have burned a potentially very productive bridge in front of you.

Last edited by TEL2002 : 10-17-2010 at 12:29 PM.
  #4  
Old 10-17-2010, 12:28 PM
jlabauve's Avatar
jlabauve jlabauve is offline
 
Join Date: Feb 2009
State: Louisiana
Professional Status: Certified Residential Appraiser
Posts: 921
Default

No lease on the land. Of course it's the husband's or wife's father's land. No agreement on what would happen if the couple left.
__________________
"It is unwise to be too sure of one's own wisdom." Mahatma Gandhi
  #5  
Old 10-17-2010, 12:34 PM
jlabauve's Avatar
jlabauve jlabauve is offline
 
Join Date: Feb 2009
State: Louisiana
Professional Status: Certified Residential Appraiser
Posts: 921
Default

Quote:
Originally Posted by TEL2002 View Post
This is one screwed up mess, why do people put themselves in such lousy situations?

Obviously they are "in love" when they make these decisions, and it's gonna last forever and ever!!! lol I'm sure no one on this forum has ever made an error in judgement when they were "in love".
__________________
"It is unwise to be too sure of one's own wisdom." Mahatma Gandhi
  #6  
Old 10-17-2010, 12:41 PM
Doug DeMars's Avatar
Doug DeMars Doug DeMars is offline
 
Join Date: Mar 2009
Location: California Delta / Co Co County
State: California
Professional Status: Certified Residential Appraiser
Posts: 1,744
Default

Better be clear what you're appraising. The movable house? Who cares about the barn or other site improvements...those belong with the land.

There may be a lease-hold value to the land...but that's a separate valuation issue and personally, I'd be calling someone who is more familiar than I about such issues.

If value has been asked for the "movable" pier-frame structure. You may be able to find some similar info with "similar" manufactured homes...then apply a significant discount for not being new. IMO, the cost to move and intall the structure is a separate issue but could be extracted...if then also using a manufactured home re-sale in the market and deducting its land value and cost of its site improvements (e.g. foundation, utility hook-up, etc...)

Sounds like a lot of work...make sure you get paid properly.
__________________
Brain Surgeon to Rocket Scientist: "Gee Bob...thankfully it's not so difficult like an appraisal."
  #7  
Old 10-17-2010, 12:57 PM
Denis DeSaix Denis DeSaix is offline
 
Join Date: May 2005
Location: Northern California
State: California
Professional Status: Certified General Appraiser
Posts: 15,050
Default

The subject of the valuation problem, then, is the house and the other improvements?

I doubt if the ancillary buildings have much value and are worth re-locating.
Sounds like the site improvements are (literally) sunk-costs to support the improvements and have no reversionary value to the owners of the improvements.

Quote:
4) I suppose I could do a depreciated cost approach, but that ain't market value.
Maybe it is?

Isn't this similar to a special-use subject?
The cost approach may be the only reasonable way market participants would value such a property.
If you found several, similar-type properties (land and improvements), extracted out the land values, the contributory value of the improvements should be similar, no?
Then depreciate the subject and see how close the values match. Be sure to consider such things as EI and (as TEL2002 points out), moving costs (which should have its own EI, if you ask me).

Finally, you may be able to get the court to agree that value should be expressed as a range or benchmark (I'd try to get agreement to a range).

The court definitely needs help in establishing a value.
This problem is very complicated.
Lack of similar-data and using improvement-extraction values reduces the confidence level of any point-value conclusion (hence, the range of value).
You can look at the older sales and try to determine if there was any "stigma" attached to the fact that the improvement was moved. My guess there isn't (if anything, the new foundation should be compliant with current building requirements and structural integrity of the improvement will probably be evaluated to ensure it can withstand the stress of the move and the placement on the new foundation; I'd make this an EA if not the case).

I'd outline the problem (as I saw it) and then provide my methodology for solving it. I'd want to get the court to agree that my process was acceptable and consistent with the intended use of the results.

I also agree with TEL; charge appropriately for the assignment!!!

Good luck!
  #8  
Old 10-17-2010, 01:07 PM
hglenbetts's Avatar
hglenbetts hglenbetts is offline
 
Join Date: Dec 2007
Location: Milford, Mi (SE Mich)
State: Michigan
Professional Status: Certified Residential Appraiser
Posts: 1,745
Default

I'm no lawyer, but I did watch all the episodes of "Alley McBeal".

Without a lease, or some other written agreement, might not the law say that the improvements to the land become the property of the land owner?? This could be a big ownership rights problem for the non related spouse. He/She may have no ownership rights in the improvements for you to appraise, if the land owner argues ownership.

Then, you're appraising that spouse's loss of "investment" in the improvements, as they wouldn't have the right to move them any way.

You're looking at a huge Extraordinary Assumption, that there is value once moved (other than salvage) (do you folks actually just move those frame on pier homes around??) and a huge Hypothetical Condition with actual ownership of the improvements.

Good Luck
__________________
“There’s only one country that guarantees, in writing, your right to pursue happiness”… Tony Soprano

Last edited by hglenbetts : 10-17-2010 at 01:12 PM.
  #9  
Old 10-17-2010, 01:26 PM
jlabauve's Avatar
jlabauve jlabauve is offline
 
Join Date: Feb 2009
State: Louisiana
Professional Status: Certified Residential Appraiser
Posts: 921
Default

The difficulting in estimating moving costs is that there must be a stated destination for the improvements. Cost is different if you are moving it across the street, or if you're moving to 45 miles away. Anyone who's seen these types properties being moved knows that they gotta move powerlines, etc.

In reality it's highly, highly unlikely that this property gonna be moved. It's gonna stay right where it is. So the "moving" is theoretical.
__________________
"It is unwise to be too sure of one's own wisdom." Mahatma Gandhi
  #10  
Old 10-17-2010, 01:33 PM
Denis DeSaix Denis DeSaix is offline
 
Join Date: May 2005
Location: Northern California
State: California
Professional Status: Certified General Appraiser
Posts: 15,050
Default

Then, I think you are going to have to get some specific instructions from the court (not the attorney).
It sounds like the assignment is moving away from "EAs" and toward "HCs".

Again, the court needs a value. Describe the situation, give it some options, let it choose the parameters, and take it from there.
Sponsored Links

Closed Thread


Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump




Copyright © 2000-, AppraisersForum.com, All Rights Reserved
     Terms of Use  Privacy Policy
AppraisersForum.com is proudly hosted by the folks at AppraiserSites.com

Fastest Way to Find a Real Estate Appraiser Enter Zip Code:
Partner Sites:
AppraiserUSA.com - National Appraiser Directory AllDomainsUSA.com - Domain Name Registration
DeadbeatListings.com - Deadbeat ListingsAppraiserSites.com - Web Hosting for the Professional Real Estate Appraiser
Find FHA Appraisers - FHA Appraiser Search Commercial Appraisers - Commercial Appraiser Search
Relocation Appraisal - Find Relocation Appraisers Domain Reseller - Business Opportunity
Home Security Buzz - Home Security Info Radon Testing - Radon Gas Info
My Medicare Forum - Medicare Info Stop Smoking Help - Help Quitting Smoking
CordlessPhoneStore.com - Great Cordless Phones AndroidTabletCity.com - Android Tablet Computers

Follow AppraisersForum.com:          Find us on Facebook            Follow us on Twitter


All times are GMT -5. The time now is 10:28 PM.

SiteMap: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93