Fannie Mae and "Multiple Parcels"

[alebrewer]

The FAQ is the ASB's interpretation of what Fannie Mae is requesting.

Where does it say the FAQ answers the fannie mae request? In any event, the question in the FAQ does not have the same condition as the fannie request

It is you who will not see the it, J. In reality, if the subject property has a contiguous 2nd lot,

the ASB's assumption is that the lender will want them appraised 'as if they were one'.

the ASB assumption then is NOT what Fannie request says- if ASB assumes the lender wants the 2 parcels appraised as if they were one LOT ( per FAQ post #115, you changed it above if they were one)

Again - your beef is with the ASB. If you think it is more clear to state that the lender wants them appraised 'as if the 2nd lot has additional value in use', then petition them to clarify it. I think the FAQ makes perfect sense, but if you don't - then petition them. Have you ever had a lender ask you to not include the legal description of the 2nd lot? (hopefully) not - they understand that they are two separate parcels encumbered under only one first lien. For the purpose of APPRAISING THEM, though, the value conclusion (in your scenario) reflects the value of BOTH lots as (to use Greg's terminology) 'one economic unit'.

The FAQ makes perfect sense, for the question it answers. I can write to the ASB and post both questions side by side, the question posed in the FAQ, and the fannie request.

Indeed the MV opinion for the one economic unit/property would include a value for each of the two lots, which is not the same as combining the 2 lots into one larger lot and valuing the property as it it sits on one larger lot..

you're right - I'm wrong. Merry Christmas, J.

 

[J Grant]

Merry Christmas to you most truly and others here who are nice enough to stick around and contribute .

 

[CANative]

This thread is moving too fast to keep track of it. If already posted, please disregard.

market value opinion for two properties together as one economic unit.

If there is excess land (divided or undivided) there cannot be a single economic unit. Divided surplus land (say an orphan lot that resulted from a subdivision and historically transferring with the adjoining improved lot) might be one example of a single economic unit while excess land is always treated (valued) separately. That's why I posted that, in this type of assignment, there are two subject properties. The portion of the lot or separate lot that is improved and represents highest and best use, for that market at that time AND the portion or lot that is excess land.

I've fought this same situation, in open court and in written negotiations with assessor's from all over CA's 58 Counties, typically for commercial properties but occasionally for residential property.

 

[Lee Lansford]

Nothing to do with animosity...it is my position ( Greg B said the same , G Hatch recognized it..) ...not an argument, recognition that conveyance does not make the two parcels merge int one lot.

Indeed and agree, the purpose of appraisal is the market value opinion for two properties together as one economic unit. I always recognized that.

The problem is some appraisers claim appraising the two properties together for one market value opinion means the vacant lot merges with adjacent to become one larger parcel of land. Do you believe that is the case?

At the end of the day, you are RECOGNIZING them as separate, but you are APPRAISING them as if they were one (even though they are not).

Actually- we are APPRAISING them as a combined property for one value, not appraising them as if they were one.... two properties under a same transaction can have a combined total value, or a combined price in a sale, but they remain per legal purposes divisible properties .

This thread is moving too fast to keep track of it. If already posted, please disregard.



If there is excess land (divided or undivided) there cannot be a single economic unit. Divided surplus land (say an orphan lot that resulted from a subdivision and historically transferring with the adjoining improved lot) might be one example of a single economic unit while excess land is always treated (valued) separately. That's why I posted that, in this type of assignment, there are two subject properties. The portion of the lot or separate lot that is improved and represents highest and best use, for that market at that time AND the portion or lot that is excess land.

I've fought this same situation, in open court and in written negotiations with assessor's from all over CA's 58 Counties, typically for commercial properties but occasionally for residential property.

You're making too much sense.

 

[alebrewer]

This thread is moving too fast to keep track of it. If already posted, please disregard.



If there is excess land (divided or undivided) there cannot be a single economic unit. Divided surplus land (say an orphan lot that resulted from a subdivision and historically transferring with the adjoining improved lot) might be one example of a single economic unit while excess land is always treated (valued) separately. That's why I posted that, in this type of assignment, there are two subject properties. The portion of the lot or separate lot that is improved and represents highest and best use, for that market at that time AND the portion or lot that is excess land.

I've fought this same situation, in open court and in written negotiations with assessor's from all over CA's 58 Counties, typically for commercial properties but occasionally for residential property.

You disagree with the USPAP guru's, I presume?

 

[Michigan CG]

We established it as excess land from post one.
It does matter wrt one lot or two. It is misleading to state it became one large lot. Note fannie directive is excess land is considered value in use, not considered surplus land . Stating it is one large lot implies the second lot is surplus land, which is not the case.

Exactly. And in the definitions of EXCESS land, excess land has its own Highest and Best Use. The more you post the more you condemn your opinion. But this is nothing new.

 

[Michigan CG]

It MIGHT be excess land...

Sure it MIGHT be. That is why we do Highest and Best Use analysis. A highest and Best Use analysis might take a sentence or it might take three pages for a residential assignment. Most residential appraisers do not have the ability to analyze that much. The LENDER want them both appraised together and therefore the appraiser does it.

If an appraiser does the job correctly they can make an argument that the land is either excess or surplus. The argument should be clear. Lee Lansford gave some very good examples in this thread and the related thread.

This thread (and the related thread) proves again that many people in our industry are poorly trained or do what the AMC tells them to do to retain the AMC client with idiot reviewers and "appraisers".

 

[Michigan CG]

? The fannie value in use regarding the lot for appraisal only applies when appraiser determines that a contiguous lot is excess land.

If appraiser determines it is surplus land, then the fannie condition does not apply.

You actually typed this.

First, you cannot mix Value in Use with Market Value. Second, if the land is surplus this is not even a discussion.

 

[Michigan CG]

You've exhausted me and this is pointless.

That is what she does. For years.

 

[Michigan CG]

If there is excess land (divided or undivided) there cannot be a single economic unit.

I think this a good point, very good point.

This thread and the other thread posted related to this topic is a mostly OBVIOUS appraisal 101 discussion.

This thread and many over the last decade is depressing as there is basically ONE poster who does not get it and she has not understood basic appraisal practice for as long as I have been a moderator on this forum which I think is about 2006.

There are some very smart people on this forum and I don't understand why they respond to Jgrant's posts but I am guilty of it too. Her posts over the last decade PLUS have given bad advice on more issues than I can count. This whole discussion would be a lot more educational if she did not post so much with uneducated views.

This thread and the previous thread is a serious issue and the topic is serious as it is contrary to USPAP and the basics of Highest and Best Use if the H and B is done correctly.

I hate to say this but, folks, quit responding to her ignorance of Highest and Best Use; she doesn't understand it.

As a moderator I don't have the ability to put her on IGNORE but everyone else does. It is frustrating to read her posts. Arguing with her or trying to educate her is like arguing with my 8 year-old about the reality of Santa.

This forum suffers because of these types of completely uninformed posts and the lack of understanding of basic appraisal practice.