Second Lot on VA Purchase

[Zoe]

I would assume zoning would be the same for the two lots if they are adjacent - the HBU as vacant would be same for either lot, but if the lot subject is on is grandfatherd in res zoning in a commercial area and the dwelling contributes more to the two lots than tear down then HBU for the assignment purpose is interim or existing - but commercial zoning would be pretty rare and if present perhaps a res license appraiser would decline the assignment.

Plain vanilla res zoning more likely the case, then it is are appraisers going to make this far more complex than needs to be - buyers are allowed to purchase a home along with a vacant lot and if lenders want to finance them, which apparently they do, appraisers, if comptent, can appraise them.

The confusion ( see marathon former thread lol ), confusion seems to be appraisers believe their assignment means appraise the vacant lot AND appraise the house and its site, and if the vacant lot can have an alternate HBU or be worth more sols separate OMG- down the rabbit hole they go. While one can, and might be due diligence to, develop an opinion of value for the escess lot, that is NOT the assignment. The assignment is develop an opinion of value for the two properties sold /conveyed as one package/assemblage ( and financed under one mortgage. ) Thus, the question becomes for HBU, as improved, does the dwelling contribute enough to the sites to be retained, aka an as is rather than demolish the dwelling and both sites /lots worth more as vacant.

In theory, if the same size, the lot of subject dwelling should be worth the same $ as vacant as the excess lot. But as a package, the contributory value of the excess lot might be less than if vacant. Which can be explained in the report as part of the analysis. That does not change the HBU of the whole property, which is the existing dwelling contributes to the sites, the second parcel does not become surplus land, it remains an excess lot parcel but serves a value in use while encumbered under one mortgage . ( value in use can be as , extra land for privacy or build amenities on or hold for investment purpose )

Yes, but if worth more sold separately, you see the problems. Different marketing times or other differences. That's why market value is so unique in it's definition. Market value is only value definition that requires H&B use analysis to my knowledge. I could be wrong.

 

[Zoe]

I just did one recently. It was a refi. I told veteran we are not including extra lot. You can when you sell it if you want. He didn't want anybody building next to him. He bought it separately.

 

[J Grant]

Yes, but if worth more sold separately, you see the problems. Different marketing times or other differences. That's why market value is so unique in it's definition. Market value is only value definition that requires H&B use analysis to my knowledge. I could be wrong.

Appraisers MAKE this into a problem. Big ** deal, just explain the excess second lot could be worth more if sold separately, however its contributory value to the whole is less (if that is the case ). Again, our assignment is to appraise the property as a package, so there is no conflict about HBU of the property as a package, assuming dwelling contributes enough to leave in place. The HBU of the second lot is a value in use as long as it is included along with the dwelling ( and remains encumbered by a one mortgage) .

Our HBU analysis is of the package property which is the subject of the appraisal. Appraisers go into making the HBU analysis of the second lot separate into a subject of appraisal, when that is not the case We are engaged to appraise the property as one package. If we develop a value for the site as vacant it is to help figure out its contributory value to the whole.

 

[J Grant]

I just did one recently. It was a refi. I told veteran we are not including extra lot. You can when you sell it if you want. He didn't want anybody building next to him. He bought it separately.

?? You decided not to include the value of a second lot ? And thus forced the vet to buy it separately ? How did you insert yourself into a deal and be communicating that with the vet anyway. mo.

 

[Zoe]

Appraisers MAKE this into a problem. Big ** deal, just explain the excess second lot could be worth more if sold separately, however its contributory value to the whole is less (if that is the case ). Again, our assignment is to appraise the property as a package, so there is no conflict about HBU of the property as a package, assuming dwelling contributes enough to leave in place. The HBU of the second lot is a value in use as long as it is included along with the dwelling ( and remains encumbered by a one mortgage) .

Our HBU analysis is of the package property which is the subject of the appraisal. Appraisers go into making the HBU analysis of the second lot separate into a subject of appraisal, when that is not the case We are engaged to appraise the property as one package. If we develop a value for the site as vacant it is to help figure out its contributory value to the whole.

The answer to H&B use would be "NO" in the case I had. GSE's would not have purchased loan.

 

[Zoe]

Lee is on target. He has it right.

 

[J Grant]

The answer to H&B use would be "NO" in the case I had. GSE's would not have purchased loan.

You are wrong about that, Fannie does purchase loans with a second lot including when it is an excess lot, they have a guideline how to handle it for appraisers - whether you agree with their guidance or not, FF will finance loans with a second lot included in a purchase.

 

[Zoe]

You are wrong about that, Fannie does purchase loans with a second lot including when it is an excess lot, they have a guideline how to handle it for appraisers - whether you agree with their guidance or not, FF will finance loans with a second lot included in a purchase.

I don't think they will purchase a loan where H&B use box on page 1 is checked "NO". I could be wrong. Remember maximally productive in H&B use analysis.

 

[J Grant]

It would be misleading to state the HBU of a second (excess ) slot by itself is to be combined, when that is not true. What is true, is the HBU of that second lot can be a value in use ( green area etc ) when it is COMBINED as a total package with a dwelling . Fannie guideline is the HBU of the second lot is a value in use when it is conveyed along with a dwelling. Which does not mean we lie and say the HBU of the site as vacant is a value in use with adjacent house ( unless we support that is true )

Properties are sold as assemblages all the time, correct? So the HBU of a separate property piece of the assemblage, if sold alone might be different than its HBU or a different $ worth then when it is conveyed as part of the package.

 

[J Grant]

I don't think they will purchase a loan where H&B use box on page 1 is checked "NO". I could be wrong. Remember maximally productive in H&B use analysis.

That is the appraisers fault for incorrectly checking NO on the box !! Since the purpose of the appraisal is NOT to appraise the excess lot alone . The NO answer addresses the HBU of the vacant site only.

The purpose of appraisal MVO of s the package of dwelling along with the adjacent lot, and as long as the dwelling contributes enough to the sites the HBU for the package is existing as is, note the contributing HBU of the excess lot functions as a value in use as long as encumbered by one mortgage.