Prior Sales History/new Construction

[Eli]

The reasoning for not wanting to report the prior sale is the exact reasoning that it needs to be reported and explained in the little section below the prior sales history on the 1004 form. Many won't read it unless trouble comes up, but CYA.

This is related to intended use and user too. I can give a verbal opinion of value to some clients, but I still better know about the prior transfers of the comparables or subject in my work file. In contrast, if my report is on a form 1004, I am going to report it.

 

[Peter LeQuire]

What Rich Heyn says. However, the argument is valid that the property being appraised is the property when the proposed improvements are completed. The hypothetical condition - that the improvements are complete on the effective date of the appraisal - hasn't been satisfied, so there can't have been a prior sale. But, the expectation of clients and regulators govern. (I find the reasoning of the second paragraph of FAQ 226 curious, however.)

 

[Tom D]

yea!! didn't give in to that underwriter, there's a minor hill to die on. who's the lender, maybe they're looking for a new appraiser. you can still win the war, but lose a battle. and maybe make a friend with an underwriter who will think you are a brilliant appraiser. you made an existential mistake.

 

[redfish]

"The subject property was purchased by the current owner in an REO transaction involving the liquidation of an improved parcel. The property purchased at the time consisted of three lots assembled into a single parcel consisting of 19,800sf that was improved with a single family home built in 1936. The current owner removed the existing improvements then split the three lots into two building sites, one of which is the subject property which is described by the legal description reported in the subject section of the URAR."

I checked the box "yes"

 

[RSW]

I also agree with the reviewer. The house does not make it a site. The land makes it a site.

 

[timd354]

I just got off the phone with a review appraiser. She said that 95% of the appraisers do this differently than I do. My sales history comments: Cowlitz County records indicate that there has been no sale or listing of the subject property over the prior three years. The subject site with the two outbuildings, private well, septic and power was purchased on 04/28/2015 for $122,500. She was adamant that the site sale was the same as a sale of the subject property. I tried to explain that I'm appraising the subject property which is defined as the site and its proposed site improvements, of which there has been no listing or sale and that I did disclose the site sale but it is not the same thing. I would not change it for her and have added the following statement: (The subject property appraised is defined as the site and its proposed site improvements. There has been no listing or sale of the subject property as defined over the prior three years.) It seems obvious to me that an appraisal on a property as proposed construction at almost $400K is not the same property as the site and utilities that sold for $122K a few months back. I can understand asking me to disclose the site sale if I had not done it, but it was in the report! Or am I in the 5% that is incorrect?

It never ceases to amaze me some of the stupid things that appraisers choose to fight about. First of all, the reviewer is absolutely correct. Second of all, even if the reviewer was not correct and the reporting of this prior sale is not required per USPAP as you contend, you can never go wrong by disclosing more information than is required and you could have disclosed the prior sale and written a short explanation that the prior sale was of just the lot in less than 1 minute and already moved onto the the next assignment without having possibly pissed off the client or wasting your own time fighting over such a trivial issue.

 

[Peter LeQuire]

T, t, t, t, too much time on our hands, perhaps?

 

[normando]

Before when I get conditions from reviewers, I use to get offended and put on a fight mode. That's usually our first reaction. Now I calm down and work with the reviewer even if they're wrong.
Usually, it works but if not then I'm in KILL mode and I usually win. You don't want me in KILL mode.
My advice for all appraisers is not to over react and give reviewers what they want within reason.
If it's easily correctable, fix it or at least "creatively" fix it and move on.

 

[bnmappraisal]

Or am I in the 5%

...I won't go as far as to say you are "incorrect" but I do think you're in the "5%"

There was a sale/transfer of the subject property in the past 3 yrs of the eff date of your appraisal.

 

[Rich Heyn]

Actually, there is a respectable argument to be made for Heidi's position. The argument goes along the lines that when significant changes take place regarding the relevant characteristics or property rights, the result is a new "subject property." I don't have my Dictionary of Real Estate available, but I'd be surprised if there is a definition of "subject property." Common sense says it's the property being appraised. So if I'm appraising a 1 acre parcel that's been split off a 640 acre parcel, what is my "subject property?" There are now two new properties. The old "subject property" no longer exists. What if the entire 640 acre parcel changed hands a year prior to the split?