2 Parcels

[Niki Dransfeldt]

Hello!

I'm a real estate broker in Illinois. I have a buyer purchasing a property with 2 Parcels. It is a conventional loan.

Parcel 1 - Home & Garage
Parcel 2 - Mobile Home on wheels, above ground fuel tank, 2 small sheds.

Value came back 21k over contract price, but is 'subject to' conditions.

He wants the mobile home, sheds and fuel tank removed from parcel 2 because it doesn't conform with the neighborhood. This is a bit strange as there are 2 mobile homes nearby.

We then requested the appraiser to update the appraisal to only include parcel 1. We hoped there was enough value to still be at our above contract price.

The appraiser said they would do this but it's subject to the contract saying that the buyer will not purchase parcel 2 separately.

Is that within his bounds to require that?

Thanks!

 

[TerryRohrer]

The appraiser is a little confused as to what their task is. I suspect their contract with the bank did not include being the neighborhood watch committee. The things he is insisting have to be removed are personal property. Does that mean he dictates when a poorly painted car is in the driveway? The value of the real estate does not change when personal property is stored on it if the personal property does not permanently affect the real estate. I would insist the conditions be removed from the first appraisal. Nor does the appraiser have any place in writing the contract. They appraise the subject they were hired to appraise, and comment on how the contract compares to what they appraised. The contract does not affect their appraisal, nor does their appraisal affect the contract.

 

[Niki Dransfeldt]

The appraiser is a little confused as to what their task is. I suspect their contract with the bank did not include being the neighborhood watch committee. The things he is insisting have to be removed are personal property. Does that mean he dictates when a poorly painted car is in the driveway? The value of the real estate does not change when personal property is stored on it if the personal property does not permanently affect the real estate. I would insist the conditions be removed from the first appraisal. Nor does the appraiser have any place in writing the contract. They appraise the subject they were hired to appraise, and comment on how the contract compares to what they appraised. The contract does not affect their appraisal, nor does their appraisal affect the contract.

Thank you for your reply. Much appreciated!

 

[TerryRohrer]

If the lender had any sense, they could deal with it themselves. I doubt if the appraisal says that the value isn’t there if those items are not removed. If it does, the appraiser really is a fool. If not, the lender can dismiss those conditions outright. If I were your buyer, I would be appraiser hunting about now!

 

[George Hatch]

Stuff on properties are literally here today and gone tomorrow, so it doesn't make sense for an appraiser to be be doing anything with that in an appraisal other than *maybe* disclosing it in the report. I've ignored plenty of RVs and derelict boats and used shopping cart collections over the years

With that said, I wouldn't ask the appraiser to value only the SFR parcel unless I knew for a fact that the value of the other lot was less than the $21k.

 

[NC Appraising]

Hello!

I'm a real estate broker in Illinois. I have a buyer purchasing a property with 2 Parcels. It is a conventional loan.

Parcel 1 - Home & Garage
Parcel 2 - Mobile Home on wheels, above ground fuel tank, 2 small sheds.

Value came back 21k over contract price, but is 'subject to' conditions.

He wants the mobile home, sheds and fuel tank removed from parcel 2 because it doesn't conform with the neighborhood. This is a bit strange as there are 2 mobile homes nearby.

We then requested the appraiser to update the appraisal to only include parcel 1. We hoped there was enough value to still be at our above contract price.

The appraiser said they would do this but it's subject to the contract saying that the buyer will not purchase parcel 2 separately.

Is that within his bounds to require that?

Thanks!

OP, food for thought. PS TELL US HOW IT WENT.
1. Some lenders will not lend if there is a mobile (manufactured home) on the lot. Some will not lend at all, some want the axles and tongue removed, age of the unit and some want it removed if they are not habitable. Heck, I just did one for a credit union and they did not care at all.

So maybe it is a lender requirement, and the appraiser is just saying that because one does not really know why it is a lender requirement (appraiser just making a reason). As an appraiser, I do not know why in every single case why a lender has a specific requirement, as we are no longer allowed to talk to the lender. (going through a AMC to find out is very time consuming.)

2. Many lenders have more requirements above what the GSEs require.

3. States vary on how they classify manufactured or mobile home.

 

[Elliott]

Ah, the two parcel problem, again. What does Bart or ChatGPT say? If its so smart it should be able to give a definitive answer for the GSE since they live on the same server. it should be able to solve the 'bias' external obsolescence adjustment too.

Can you ask one AI what the other AI says about a problem?

 

[NC Appraising]

Stuff on properties are literally here today and gone tomorrow, so it doesn't make sense for an appraiser to be be doing anything with that in an appraisal other than *maybe* disclosing it in the report. I've ignored plenty of RVs and derelict boats and used shopping cart collections over the years

With that said, I wouldn't ask the appraiser to value only the SFR parcel unless I knew for a fact that the value of the other lot was less than the $21k.

To a point, I agree.

Many on this forum say that personal property or trash, etc. does not affect the value or marketability, which I disagree with.

In your RV example, I agree. What, $500 tow fee?

Say you have a urban property where the value is in the land. Demo costs are $10,000. Does not the appraiser deduct the $10,000?
Comp 1 vacant site sold for $50,000.
Comp 2 tear down home sold for $40,000.

What is the difference from a buyer's perspective if the home has an un-inhabitable manufactured home that will cost $10,000 to remove?
How about a rural property with 50 junk cars, a inground pool that needs to be filled in, and acres of trash on it. Estimated cost to remove is $15,000. From a buyers point of view, they are not going to want a lower sales price or a discount? How about a hoarder property?

Listing 1 has a home with no junk cars and no un-inhabitable manufactured home. List price $300,000.
Listing 2 has a home with 30 junk cars and a un-inhabitable manufactured home. List price $300,000. Cost to remove $15,000.

As a buyer, you would not want a discount, a concession or a price reduction in the price for Listing 2 or at least part of the contract is for the removal before closing? As a buyer, would you really pay the same price for both properties?



So when you say "stuff on properties are here today and gone tomorrow", yes, but at what cost?

 

[NC Appraising]

The contract does not affect their appraisal, nor does their appraisal affect the contract.

True but ignoring the contract can get messy.

There have been many situations where I would have come in below the contract or prolonged the mortgage lending process.

I just appraised a home and part of the contract was for the seller to install a new driveway before closing. This was for an existing home. The original driveway was in between a business and home with a R/W. It was odd. The new driveway has no R/W or easement and has a private driveway.

If buyers are requiring something to be done prior to closing (repairs, drive-ways, removal of items, filling in pools) these were calculated in the negotiation process of the contract price. The subject will also become a future comp with the above requirements done before closing.

If any of the above affects the value and the appraiser comes in below the contract price, obviously unwanted issues are going to arise. So instead of coming in low and causing problems, why not make the report subject to? Of course, one should always contact the lender/client first.

How about a functioning inground pool that adds value but part of the contract is for the sellers to fill it in before closing. Would you still give value to the pool?

 

[George Hatch]

To a point, I agree.

Many on this forum say that personal property or trash, etc. does not affect the value or marketability, which I disagree with.

In your RV example, I agree. What, $500 tow fee?

Say you have a urban property where the value is in the land. Demo costs are $10,000. Does not the appraiser deduct the $10,000?
Comp 1 vacant site sold for $50,000.
Comp 2 tear down home sold for $40,000.

What is the difference from a buyer's perspective if the home has an un-inhabitable manufactured home that will cost $10,000 to remove?
How about a rural property with 50 junk cars, a inground pool that needs to be filled in, and acres of trash on it. Estimated cost to remove is $15,000. From a buyers point of view, they are not going to want a lower sales price or a discount? How about a hoarder property?

Listing 1 has a home with no junk cars and no un-inhabitable manufactured home. List price $300,000.
Listing 2 has a home with 30 junk cars and a un-inhabitable manufactured home. List price $300,000. Cost to remove $15,000.

As a buyer, you would not want a discount, a concession or a price reduction in the price for Listing 2 or at least part of the contract is for the removal before closing? As a buyer, would you really pay the same price for both properties?



So when you say "stuff on properties are here today and gone tomorrow", yes, but at what cost?

Now we're getting into market specifics. The inventory of available parcels will vary by locale. Depending on where, a prospective buyer might have many alternatives to consider or they might have almost none. Price counts, too. What a buyer might basically overlook for a $900k subdivision parcel might be a deal breaker for a $15,000 parcel. And so on.