2 Parcels on One Appraisal?

[The Warrior Monk]

My 2 cents is this. If you have 2 parcels which can stand alone and taxed seperately. The second parcel being buildable.

Definitely not true...ask any attorney, land planner, or the planning department of town/village (the people in charge...not the clerks) for confirmation if you wish. In fact, it's one of the main reasons title reports are run.

Having a separate legal identification is not the standard for determining whether are parcels are single and separate. I've even posted the image of such a parcel on this forum a while back. The most common example is the property that crosses an tax jurisdiction. If you want example, see Southampton Tax map (900), section 10. In Northside Hills you will see a dividing line go right through the subdivision, cutting many of those lots in half...they have separate tax map numbers, yet are not single and separate. For further examples, see the East Hampton Town Code regarding contiguous parcels under the same ownership...people who subdivide property checkerboard the ownership for a reason.

You must appraise them seperately.

If they are two separate properties, most lenders out here would require that they be formally joined together before providing a loan. If they are not legally combined then putting them both in one loan would be what is known as a blanket mortgage. H&BU would be a mute issue as technically each piece could be a separate H&BU.

Not necessarily true...there is no such requirement to appraise them separately.

This is a scope of work issue. If for a lender, the lender may want the mortgage to encumber all properties, and would want to know the value of the entire portfolio of properties. HBU still applies.

There are sales of multi-parcel properties that occur all the time. My experience has noted that many appraisers miss them, because the ownership appears to be different. This is done to avoid the potential merger of the lots....say, an individual owns one lot, and a corporation owned by the individual owns the other lot.

What if this were a sale? Would the seller not want the market value for parcel #2.[/quote]

If this is for a lender, the seller is not client.

 

[redfish]

I am with Propecon.

On a side note, back to the lender. If I was lending money I would attain as much in collateral as I could. Why not grab both parcels as collateral for the price of one loan. It's just smart banking. I would be arguing hard to keep that vacant adjacent parcel out of the collateral for the loan if I was the borrower.

 

[Webbed Feet]

<....snip.....>
This is a scope of work issue. If for a lender, the lender may want the mortgage to encumber all properties, and would want to know the value of the entire portfolio of properties. HBU still applies.

And this would mean the vast majority of appraisers would have to withdraw from the assignment due to lack of competency and/or scope of license issues.

If this is for a lender, the seller is not client.

and the lender is not the market. Nor can the lender opt to ignore the definition of market value at the same time the lender asks for an assignment and wants "Market Value."

 

[Mr Rex]

I thought that the Albuquerque market was dead? If there is no current demand for the vacant site, then H&BU would be the improved site plus the vacant one as excess. MHO

 

[Pittsburgh Pete]

And this would mean the vast majority of appraisers would have to withdraw from the assignment due to lack of competency and/or scope of license issues.



and the lender is not the market. Nor can the lender opt to ignore the definition of market value at the same time the lender asks for an assignment and wants "Market Value."

Huh? What does the definition of market value have to do with how many tax parcels might be involved in the valuation? Sorry, I must have missed something.

 

[Webbed Feet]

I thought that the Albuquerque market was dead? If there is no current demand for the vacant site, then H&BU would be the improved site plus the vacant one as excess. MHO

<.....snip....> (Contributory value of additional land is worth less than if sold separately.) <.....snip.....>

At some point we have to believe an O.P. has done their homework when they make point blank statements about the market regarding their subject.

 

[Lee Lansford]

At some point we have to believe an O.P. has done their homework when they make point blank statements about the market regarding their subject.

I agree and such has fueled my responses.

Some believe (I do not) that "one size fits all" for all appraisal assignments.

While all things may be possible, not everything is appropriate (or, applicable) for a particular assignment.

 

[Webbed Feet]

[/b]

Huh? What does the definition of market value have to do with how many tax parcels might be involved in the valuation? Sorry, I must have missed something.

No need to apologize. We all miss things from time to time. Like proceeding based on an unspoken assumption that the hypothetical seller is a total idiot, and all hypothetical sellers in that market are. You may parse this down to the words "tax parcel," but the thread is about the number of legal lots of record that have their own separate H&BU and their own separate Market Values. We can try and say, "Hey! What if the seller hypothetically sold both together instead of separately?" .... Only that becomes problamatic when in reality no sellers in that market are doing so because they all know where the money is. Or the only ones that are turn out to be distressed sales or not arms-length.

 

[Pittsburgh Pete]

No need to apologize. We all miss things from time to time. Like proceeding based on an unspoken assumption that the hypothetical seller is a total idiot, and all hypothetical sellers in that market are. You may parse this down to the words "tax parcel," but the thread is about the number of legal lots of record that have their own separate H&BU and their own separate Market Values. We can try and say, "Hey! What if the seller hypothetically sold both together instead of separately?" .... Only that becomes problamatic when in reality no sellers in that market are doing so because they all know where the money is. Or the only ones that are turn out to be distressed sales or not arms-length.

What you fail to grasp is that the total property (which just happens to include two lots) has its own market value. If I do a subdivision analysis of a proposed 100 lot development, each of the lots has its own market value but so does the total. Perhaps it's a residential thing that you fail to grasp that concept and fall back on the thought that each of the parts of the whole have their own separate market values and that valuing the whole borders on heresy.

 

[TJSum]

If the two parcels are deeded together, in their current legal status, it is not possible to develop the second lot. As least in this area, the two lots would first have to be placed on separate deeds. And in some jurisdictions, this is a long drawn out process. So the "as is" value would be the legal status as of the effective date. You should explain in the report, the current use is not the POTENTIAL Highest and Best Use, if that is the case, but the current use is what is legally allowed. IMO you would need a HC to value them separately, because they would first have to be deeded separately in order to develop the second lot. There is a difference between what is currently legal and what the potential legal use is. IMO you should value the property based on the legal status as of the effective date, and then also go into great detail on what the potential H & B use would be if the two parcels would go on to be separately deeded.

In our urban/suburban markets we see this occasionally, and the reason the second lot never did get developed is because the lot is so small, that even though it would be legal, it would end up causing functional problems enough to both lots that in the long run there would not be much of a difference in overall value between the two uses.