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Old 11-26-2003, 02:54 PM
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Blue1 Blue1 is offline
 
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Since some lenders are refusing to do appraisals on older manufactured homes I am recieving yet another 'creative' assignment.

Land only....Ignore the mobile and illegal shop. I plan to disclose all the structures on the property and make a hypothetical appraisal with land, well and septic only. Can I do this?
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Old 11-26-2003, 02:56 PM
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Pamela Crowley (Florida) Pamela Crowley (Florida) is offline
 
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Yes.

Also, double check to see if the buildings, including the MH are included in the real property taxes.
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Old 11-26-2003, 02:57 PM
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Don't see why not. I'd mention it, and say wez be pretending it ain't there.
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Old 11-26-2003, 04:01 PM
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Maybe you should make it REALLY clear that there are other structures (especially the habitable manufactured home) on the property. What if the land is somehow encumbred by a private note on the structures? Could you be liable if lender B had to foreclose only to find out there was a lender A in line in front of him. I think this has happened before (actually, I know it has happened before.)
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Old 11-26-2003, 04:06 PM
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Exactly what I've had to do at times when there's the old singlewide grandma's quarters on the property with the home they're refinancing. Mention it's existance and tell them about the 'grandfathered' or illegal zoning situation.

Next call is always, 'can you find a comp with the same situation?'. I've learned to find one like that in the first go round, if possible. If not, say so in big bold letters.
  #6  
Old 11-26-2003, 04:33 PM
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You can do exactly what you said.

Make it a land appraisal based on the specific request of the client that the report be a land only hypothetical appraisal ignoring any improvements on the land whatsoever and assigning no contributory value whatsoever. Warn the client that this value may not be reflective of the value of the subject as constituted.

Ignore taxes. They are N/A as assumed. Ignore zoning. Ignore condition of the improvements, etc. Same thing. Spell these out and make sure that you are very clear what you are doing in the Scope of the Appraisal statement.

Nobody can fault you for meeting your clients request as long as you warn them and you are not misleading about what you are doing. What they do with the appraisal is their business.
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Old 11-26-2003, 05:31 PM
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I'm sure this won't be a popular suggestion, but I'll throw it out anyway.

CYA, Give them both value opinons and let them make their own decisions. Assuming the onsite unit does have contributory value, that will represent the "As Is" market value of the property. The "As If" value as land-only represents a hypothetical value that could possibly be construed as misleading if there's any amibguity in the report at all. And as I'm sure you're aware, ambiguity is mostly within the eye of the reader.

You need not get real carried away with the "as Is", just look at a couple of improved comps while you're out looking at your land sales, spend the five extra minutes to analyze those sales in comparison with your improvements and develop an opinion of value. Throw it into your report as a one-liner "The value of the property as improved in it's "As Is" condition is estimated at $XXX". Make your "As If" value opinion subject to that hypothetical condition.

This way, nobody can ever come back at you and say that you tried to be misleading (telling them it's worth more as land value than as improved), or that you didn't consider the effect on your value opinon of the use of that hypothetical. You've given them the information and now they can make an informed decision.

Of course, they probably don't really want the disclosures to be too obvious to ignore so that they can blame you when their decision goes bad. That's life. If we have to choose between giving them an out or protecting yourself, I always advocate the latter. The former is for suckers.
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