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Land / home packages are a no no

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Jo Ann Meyer Stratton

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
I am having a senior moment (at the age of 76 I think I am allowed at least one). I have probably posted the link I am looking for at some time during the years. So can any one help me find it. I have the 07/26/2011 Fannie Mae selling guide and there is a mention on page 677--but I am looking for a more detailed comment. Does any one have a link?


Some where in a Fannie Mae or Freddie Mac or FHA guideline is a neat little paragraph that explains why land / home packages are not appropriate comparables.
 
Certification #8 signed by the appraiser using a Fannie form.
 
Yes, I am aware of that. Some where is a paragraph in a set of guidelines with about a dozen sentences in it that is very specific.

Here in Arizona we have an Affidavit of Property Valuation that is signed by the buyer and seller and filed with the deed when a property transfers. Several appraisers are have huge arguments with some sales agents and dealers. They have pointed out the certification in the 1004C and page 677 of Fannie Mae guidelines but the agents are still not convinced. The agents are arguing that because an Affidavit of Property Valuation with a total price was filed--that makes the land / home package usable as a comparable. It does not because the land / home package was never exposed to the open market. Which applies to not only factory built housing but also site built homes. When a buyer buys a lot and contracts with any builder to be build a home of their choice, that package is not exposed to the market and is not usable as a comparable.

After years of people comprehending that a land / home packge is not a comparable, we suddenly have a revolt going on with local dealers, agents and loan officers. So looking for some thing in black and white that very clearly states that land / home packages are not comparables.
 
I disconnected myself in the middle of a post--probably should do that more often! I find the Selling Guide hard to search so I usually Google the phrase and hope Google finds it in Fannie for me. All I got when I tried that was an older (2009) guide that listed it bullet point style under "Unacceptable Appraisal Practices". No little paragraph, sorry!
 
Jo Ann is right, there was a Fannie guideline that custom built homes could not be used as comps as they don't represent market value. I'll see if I can surf it up.
 
406.02: Selection of Comparable Sales

"However, in no instance may the appraiser create comparable sales by combining vacant land sales with the contract purchase price of a home (although this type of information may be included as additional supporting documentation)."

[url]http://www.cramdisk.com/FNMA/index.html?10074.htm[/URL]
 
Also found this from 2002

Fannie Mar Guideline Factory Built Housing Section 304 Page 1126

"The appraiser must not 'create' comparable sales by combining vacant land sales with the contract purchase price of the home (although he or she may use this type of information as additional supporting documentation)."

This is the thread where you were posting about it JoAnn, all the way back in 2002

http://appraisersforum.com/showthread.php?t=69208&page=4
 
That is written in typical fannie double speak. "You cant create comps by combining land sales with the contract purchase price of the home ...but you can do it for additional supporting documentation"

Isn't comps 4-9 considered supporting documentation?
 
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