Exterior farm debris

[Elizabeth50]

The property I'm appraising is littered with an extraordinary amount of old broken down boats, old appliances, piles of broken farm equipment/junk metal, etc -decades of accumulation all around the outbuildings & yard. I know it's all personal property but the lender will have to pay to remove it, if foreclosed. I'm concluding towards the lower end of the adjusted range to account for this, but I'm struggling with how to carefully word it. Can anyone help or advise otherwise? Thanks!

 

[J Grant]

The property I'm appraising is littered with an extraordinary amount of old broken down boats, old appliances, piles of broken farm equipment/junk metal, etc -decades of accumulation all around the outbuildings & yard. I know it's all personal property but the lender will have to pay to remove it, if foreclosed. I'm concluding towards the lower end of the adjusted range to account for this, but I'm struggling with how to carefully word it. Can anyone help or advise otherwise? Thanks!

Is it for a purchase, refinance, or foreclosure purposes?

If a bank ordered it for REO use, then what a lender has to pay to remove if forlceleds makes sense

For a refinance or sale, both involve an assumed "sale" to a typically motivated buyer, and THEY will have to pay to remove the junk - over and above that, it can impact value due to lack of curb appeal. I have no idea what kind of property it is from your post, but RE agents have a handle on curb appeal - plus if the rest of the property is run down it might appeal to a property flipper an dnot a typical owner occupant.

 

[Elizabeth50]

It's a refinance.

 

[swandel1]

I had a somewhat similar experience. I was doing a refi, owner had HVAC business. He was taking all of the HVAC junk and dumping it right over the property line onto USFS land. He also pushed an old manufactured home over there (still had wheels on it). I thought - this is BS and made the appraisal subject to he cleans up all the illegal dumping. The amount of "blow back" I got from the lender was unbelievable. Granted it wasn't on the subject property, but he readily admitted dumping it there. And the big pile of old HVAC units and empty freon tanks bring down the value of the property should the lender need to sell it. Lender didn't care - just wanted the loan closed. So tread carefully on your verbiage. I would use the phrase "recommend removal" along with whatever best argument(s) you can come up with. Here in AZ, accumulated junk attracts rodents, and ultimately rattle snakes. So mention of that usually prompts the lender to mandate removal to prevent a hazardous situation.

 

[Vermonter]

If the accumulated junk has negatively impacted the real property with contamination of soil or deterioration of improvements, that could impact your opinion of market value. If it can be easily remedied by Grunts Move Junk, then it probably doesn't.

Either way, disclose what you found, any assumptions you made and whether or not it impacted your opinion of value.

 

[TerryRohrer]

"STANDARDS RULE 1-2, PROBLEM IDENTIFICATION
In developing a real property appraisal, an appraiser must:
(e) identify, from sources the appraiser reasonably believes to be reliable, the characteristics of the property
that are relevant to the type and definition of value and intended use of the appraisal, including:
(iii) any personal property, trade fixtures, or intangible assets that are not real property but are
included in the appraisal;
(g) When personal property, trade fixtures, or intangible assets are included in the appraisal, the appraiser must analyze the effect on value of such non-real property assets."

If you are not including personal property in the appraisal, I would avoid of modifying your value based on the presence of personal property on the subject, regardless of whether it is a purchase, refi, or pre-foreclosure appraisal. The definition of market value you are developing an opinion of very likely does not include a provision to consider what will happen if the lender forecloses on the property.

Reconciling to a lower value because the personal property is present is including the personal property in the valuation, and you then have to report what impact that inclusion has on the value. The most I would do is as Vermonter alluded to...make an assumption that the junk has not contaminated the subject in any way and then appraise it as if the junk wasn't there, and make it clear your valuation does not include personal property as part of the subject.

 

[Terrel L. Shields]

Point it out. Recommend an environmental assessment. Assume that the value could change if there are environmental issues. Assert you are not an environmental expert. Are refrig doors taken off? safety hazard. etc. Finally, say the value is contingent upon the property not being impacted by the junk.

 

[Mark K]

If you are not including personal property in the appraisal, I would avoid of modifying your value based on the presence of personal property on the subject, regardless of whether it is a purchase, refi, or pre-foreclosure appraisal.

There's a line that gets crossed from "personal property" to "excessive amount of junk and debris" that would certainly affect the market value. To me it no different from the comment: "House suffers from an extremely strong pet/cigarette odor."

I was never afraid of using the above description where some a-hole was using the property for a junkyard. If I had a wide range it would go at the bottom, if not, I wouldn't be afraid to make a condition or site adjustment equal to what I thought was a reasonable cost to cure.

They want to know market value. The market would certainly account for it; the appraiser should also.

 

[TerryRohrer]

There's a line that gets crossed from "personal property" to "excessive amount of junk and debris" that would certainly affect the market value. To me it no different from the comment: "House suffers from an extremely strong pet/cigarette odor."

I was never afraid of using the above description where some a-hole was using the property for a junkyard. If I had a wide range it would go at the bottom, if not, I wouldn't be afraid to make a condition or site adjustment equal to what I thought was a reasonable cost to cure.

They want to know market value. The market would certainly account for it; the appraiser should also.

What is valued depends on what the subject of the appraisal is. If the subject includes personal property, it should be addressed in the valuation, and the value of the personal property needs to be stated.

 

[J Grant]

The property I'm appraising is littered with an extraordinary amount of old broken down boats, old appliances, piles of broken farm equipment/junk metal, etc -decades of accumulation all around the outbuildings & yard. I know it's all personal property but the lender will have to pay to remove it, if foreclosed. I'm concluding towards the lower end of the adjusted range to account for this, but I'm struggling with how to carefully word it. Can anyone help or advise otherwise? Thanks!

Then being concerned about a lender paying to remove it if freelsoed is not your concern. They can see the photos for themselves.

Unless it is an environment or safety hazard, appraise as is and how the junk affects curb appeal value and the impact of the cost to remove on value. Usually, a house with junk outside is neglected inside as well, not much to tell from the scarce information here. Defitniey lower end of value due to expensive clean up and then pwerson would have to plant a new lawn.ow