Land Appraisal

[FMV]

Hey AF-
Has anyone ever completed a Land Appraisal with this type of request?:

"PLEASE COMPLETE REPORT SUBJECT TO A 0.5 ACRE CUTOUT FROM THE 5 ACRE TRACT"

It looks easy to understand, but at the same time I am scratching my head on this one??

Why would they need it "Subject to"? SUBJECT TO WHAT??

I have asked the AMC for clarification-but just can't get straight answer as I feel they really don't understand it either.

Hopefully someone can help us on this as I am very tempted to tell them to just reassign it.

 

[Mr Rex]

Subject to a 0.5 acre tract cut out of the 5 acre existing tract. Have them provide a survey of the "cutout".

 

[Elliott]

Originally posted by Andrew Picarsic@Jan 7 2006, 06:33 PM
FANNIE MAE, from their current "Handbook for Appraisers", page 35:

"Some appraisers report that they have been asked to appraise only a portion of a larger site: for example, the borrower owns a 30-acre site and you are asked to appraise only five acres and the property improvements. Fannie Mae considers this an unacceptable appraisal practice because the appraisal does not accurately report the facts of the subject property."

And there is this:

114.
APPRAISING PHYSICAL SEGMENTS (5-ACRE PORTION)
Question:
A local lender has asked me to appraise only a 5-acre portion of a 62-acre parcel, stating that Fannie Mae will lend on no more than 5 acres. Am I permitted to comply with this request?

Response:
Standards Rule 1-2(e)(v) states that the subject of an assignment may be a physical segment of a property. However, appraisers must also comply with any laws, regulations, guidelines or other assignment conditions that might apply.

If the assignment requires compliance with assignment conditions published, for example, by Fannie Mae, the appraiser must be aware of the current guidelines (or regulations, if applicable). As stated in the Fannie Mae, Handbook for Appraisers :

"Some appraisers report that they have been asked to appraise only a portion of a larger site: for example, the borrower owns a 30-acre site and you are asked to appraise only five acres and the property improvements. Fannie Mae considers this an unacceptable appraisal practice."

Failure to recognize this assignment condition would be a violation of the ETHICS RULE or COMPETENCY RULE.

 

[Michigan CG]

FANNIE MAE, from their current "Handbook for Appraisers", page 35:

FNMA doesn't lend on vacant land.

You don't need a survey, you need an estimate of the where the land is going to be on the plat. Arrange for the someone to meet you at the inspection to give you a survey, drawing or a good idea of the HYPOTHETICAL land to be appraised. Very simple assignment.

 

[Mr Rex]

You have to be able to adequately define the location and dimensions of the property. While its OK to guesstimate if you have really good description of the location and dimensions, I don't play that game for lending assignments but will play along for a private party trying to get a grip on potential value. Simple for a private party, way more risky with slickster lenders, regardless of all the CYA in the world. MHO.

 

[Deleted member 152047]

(Insert subject legal description) excluding, the 200' x 108.9' (0.50 acres) located at the northwest corner of the parent 5 acre tract, as depicted in the following sketch..... that would be more than sufficient. Then add the appropriate extraordinary assumptions and its all good.

 

[FMV]

FNMA doesn't lend on vacant land.

You don't need a survey, you need an estimate of the where the land is going to be on the plat. Arrange for the someone to meet you at the inspection to give you a survey, drawing or a good idea of the HYPOTHETICAL land to be appraised. Very simple assignment.

But what is it Subject to?
the carve out of the land?

 

[Michigan CG]

But what is it Subject to?
the carve out of the land?

Subject to being a separate parcel.

 

[Sid Holderly]

Agree with Michigan CG. Not uncommon, but most of the time for me it is for a private party or local bank. This is the opposite of just appraise a small tract of a whole for a home mortgage for FNMA which is not acceptable by FNMA.
Just need a reasonable description of what is excluded.

 

[Walter Kirk]

So they want you to provide an appraisal of 4 1/2 acres! After they tell you which 4 1/2 acres you can prepare a report.