Zoning, Use and Competence

[Fred]

Until he does a H&BU analysis and checks to see if Residential is an allowed use etc, its only zoned commercial, not necessarily commercial land.

Rex,
As I posted already, the only way to figure that out is by doing commercial appraising. You are going to need to look at the as-vacant value of the site and that means commercial comps. You are going to have to looked at the as improved commercial value and that is commercial appraising possibly even income capitalization.

I am not sure how res guys would know that with this type of problem, it is not sequential: HBU first, valuation next. It is the series of valuations in the different premises that will tell you both the market value and the HBU. In case, that's too abstract - you won't know it is worth $80/sf in residential use and $100 square foot in commercial use, until you do a commercial appraisal. I don't think any general appraisers will see it differently.

As to practical experience, I never did one of these where the res use was the higher value. I suppose there is such a thing as residential sprawl, I have just never seen the residential uses crowding out the commercial ones. It certainly doesn't conform to any of the classical land use models.

It's just not that simple, even if you are a CG.

I didn't say it was simple. I said that was "square one" - and if you can't get passed that... As a general appraiser, I don't have need to force this type of property an either/or check box. I can recognize that it is commercial property, and that residence is a secondary or tertiary permitted use - with low or no feasibility; or even an interim use with little remaining economic life. And if residence is higher and better, so be it. But it is still not something I am going to know until I get the end of the same appraisal and same report

 

[CANative]

Steve,

What about commercial zoned lots with old SFR's on them in one horse towns? The appraiser does the HBU by noting that several C-lots as well as old commercial buildings on c-lots have been marketed with no buyers. Yet there are sales of funky little houses on c-lots. People are buying them and living in them. Some are rented. The town already has a gas station, a little store, a little diner, a real estate office where the jackass Realtor is never there, an indian casino and a branch office of the welfare department. The town could not support another business.

Do I need to be a CG to figure the present HBU?

 

[Zero]

To reviewers out there, CG or not, what do you do when something like this comes across your desk as a residential appraisal?

 

[CANative]

If there is no presentation of a reasonable explanation of how the HBU opinion was developed I point that out to the client and provide them with one. If the HBU was not developed properly or is missing and it is out of the scope of practice for my license level, I review the report but do not provide an appraisal. That scenario just occured last week.

 

[Zero]

If there is no presentation of a reasonable explanation of how the HBU opinion was developed I point that out to the client and provide them with one. If the HBU was not developed properly or is missing and it is out of the scope of practice for my license level, I review the report but do not provide an appraisal. That scenario just occured last week.

Would saying something along the lines of "The subject is zoned commercial but HBU is considered as improved, as used, as comparable sales zoned commercial sold and used as residential are available and competitive in the residential market, but not in the commercial market, as recent sales this neighborhood of commercially zoned rowhouses improved and used as residences are listed as both commercial and residential for the market, but are predominantly bought/sold as residences." (Sorry about the run on sentence...of the cuff)

If this is true, would a similar argument, perhaps with more detail and comps to prove it, suffice for an HBU analysis?

Are such properties acceptable to Fannie?

Also, as there are comps avaailable (one is 3 houses down, 3 months ago) and assuming HBU is residential, would this be considered a "complex" assignment out of the scope of licensing for a "licensed appraiser" who is to appraise only non-complex properties?

Advance apologies if I am beating this to death, but there is very little guidance out there on the who/how of assignments like these. I've seen too many appraisal reports that report the zoning code, call it residetinial because of it's use/class, with HBU box checked "Yes." "Next box, please." is not how I want to proceed, which is why I come here.

 

[Mr Rex]

Steve,

What about commercial zoned lots with old SFR's on them in one horse towns? The appraiser does the HBU by noting that several C-lots as well as old commercial buildings on c-lots have been marketed with no buyers. Yet there are sales of funky little houses on c-lots. People are buying them and living in them. Some are rented. The town already has a gas station, a little store, a little diner, a real estate office where the jackass Realtor is never there, an indian casino and a branch office of the welfare department. The town could not support another business.

Do I need to be a CG to figure the present HBU?

I can't believe Steven never ran into this in NY or the Islands. Guess its just another reason I need to get the heck out of my hometown or get a CG, since I don't quite get why we need another commercial venture in what has been a residential area for years and commercial demand is virtually zilch. Perhaps if I were a little smarter I would realize the lands real worth, buy it, and sell to a commercial developer at a tidy profit. Gotta get the CG, ASAP, I'm leaving money on the table.

 

[jay trotta]

chek your zoning dept. and the year in which any "land use" changed and as Mike G noted, if it is a HBU - how come so many dummies past up the opportunity to make real money ?

it is for the most part, difficult to "Forcast" - because the future can also bring change for better or worse; in our area today res.lots are almost and in some instances more valuable than commercial sites, sooo the dilema continues.

In general, we have a few CG guys that we trade off bus.with, so when the question arises, I always feel it is best to consult with them before proceeding in any direction. Vice versa works too, they will make the call if they have a question inregards to the residential side and procedure. I feel, do to the funny area's in which we all work, this should be the best way to go and has worked well for us for several years now.

good luck in your adventure, ifn it was easy, everyone would be in the business...street wise is extremely helpful in this business, along with knowing and understanding - you ain't gettin all your answers "out of a book"

 

[Fred]

Steve,

What about commercial zoned lots with old SFR's on them in one horse towns? The appraiser does the HBU by noting that several C-lots as well as old commercial buildings on c-lots have been marketed with no buyers. Yet there are sales of funky little houses on c-lots. People are buying them and living in them. Some are rented. The town already has a gas station, a little store, a little diner, a real estate office where the jackass Realtor is never there, an indian casino and a branch office of the welfare department. The town could not support another business.

Do I need to be a CG to figure the present HBU?

Casino? Now, you need a pawn shop.

No matter how you slice it, you have a conclusions that residential value is higher than commercial value. That means you appraised for commercial value. What difference does it make which one is higher, whether commercial prospects are good or bad? It's commercial appraising. Obviously, a residential appraiser is what the job needs. :Eyecrazy:

 

[Mr Rex]

Now appraisers are separated by Zoning, not license level. A unique concept. I will run that by my Board. All along I thought that a legal non conforming use could be a Residential Use done by a Residential Appraiser. What the he** was I thinking?:Eyecrazy:

 

[Fred]

Now appraisers are separated by Zoning, not license level. A unique concept.

If it is, it's your concept, not mine. Properties are separated by zoning.