Prior Sales History/new Construction

[Howard Klahr]

What if the entire 640 acre parcel changed hands a year prior to the split?

Then you would need to report two prior sales of the subject property.

 

[hastalavista]

Then you would need to report two prior sales of the subject property.

You wouldn't have this problem with alternative standards.... (just kidding! ).

 

[timd354]

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?

A parcel that has been subdivided or split from a larger parcel is a very different situation from the the OP's situation which involves the same parcel that has now simply had a house built on it. I would agree that a prior sale of the pre-split 640 acre parcel would not be a prior sale of the 1 acre parcel split off from it (as that clearly was a different property), but a prior sale of the 1 acre parcel before a house was built upon it would still be a prior sale of that 1 acre parcel even after a house was built on it. In any case, the appraiser cannot go wrong by disclosing all prior sales of the subject property and any properties that it was split off from within the past 3 years prior to the appraisal effective date.

 

[timd354]

Then you would need to report two prior sales of the subject property.

No, actually you would not. A prior sale of the entire 640 acres would not be a prior sale of the 1 acre subject property since the subject property did not legally exist until the subdivision was made and you cannot have a sale of something that did not exist. In any case, it would never hurt to disclose all prior sales of the subject property and any properties it was split off from that occurred within 3 years prior to the appraisal effective date.

 

[Joe Flacco]

Then you would need to report two prior sales of the subject property.

You wouldn't have this problem with alternative standards.... (just kidding! ).

What is the standard that addresses this?

The way I have been dealing with it is the subject property is the lot. A lot that is subdivided from a larger property is a new property. I don't see how the prior sale or transfer of the property it was subdivided from is relevant.

 

[BRCJR]

In the case of a 640 ac tract, that you appraised last year, being subdivided and you are now requested to appraise the one acre tract----have you previously provided appraisal services to the subject property?

 

[Joe Flacco]

In the case of a 640 ac tract, that you appraised last year, being subdivided and you are now requested to appraise the one acre tract----have you previously provided appraisal services to the subject property?

I don't think that is prior service of the subject property. Is it? I would probably disclose that prior service anyways but reporting prior service and prior sale and transfer is two totally different things.

 

[Joe Flacco]

I appraise condo units in rowhouse conversions all the time. Developer buys the rowhouse and converts to 2 to 4 units. I do not report the prior sale to developer in the boxes and I check the box "no". But I do say in the box below that the developer purchased the pre conversion property for $X on xx/xx/xx. The pre conversion property no longer exists. The condo units are new properties and there were no prior sales or transfers of the new properties.

 

[Howard Klahr]

What is the standard that addresses this?

What are the bundle of rights identified in fee simple ownership?

 

[Joe Flacco]

What are the bundle of rights identified in fee simple ownership?

So then in the case of appraising a property that was created by assemblage, would you also report all the prior sales of the individual properties before they were assembled?