2 Parcels

[sputnam]

Personal property including trash. Many potential buyers wouldn't want to make the effort and often can't see what could be. They only see what is right now. As stated above, specifics matter. In a market where there are many similar properties available, a buyer might give a junky place a pass. If it were one of few.. or even the only one..cost to clean it up plus something for the pain of having to do it.

 

[TerryRohrer]

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?

It depends on the definition of real estate in the subject jurisdiction. Here, if attached to the land, it is real property. There is no way I am getting in to estimating the value of real estate based on the personal possessions of the owner.

I don't ignore unmitigated messes, I mention them and then state my estimate of value only involves the real property. If I think there could be conditions that impact value that I can't observe, I add an assumption. But an appraiser making adjustments or allowing personal property to influence their opinion of value has to support that impact and spell it out. That will not be me.

Using that property as a comp down the line is another matter. If the mess was left for the buyer to clean up, or a mess was left after the personal property was removed, I will account for that.

 

[TerryRohrer]

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?

All of your examples are pieces in the definition of the appraisal problem. The lender could convey every one of those what-ifs to the appraiser without the contract, they just don't bother. But each requires a decision before an appraisal can be completed, regardless of how the appraiser learns of them. Each could be treated in more than one way, so it is the result of the decision about how to deal with it in the appraisal that impacts value, not the fact it is an issue or that it is mentioned in the contract.

 

[Niki Dransfeldt]

I'm sorry I never updated on this! The lender got a new appraiser for this property. The original appraiser refused take off The second parcel unless it was in the contract that the buyer would not be purchasing said second parcel. We tried to update the contract to just remove the second parcel, but he wanted the verbage in there that it wouldn't be purchased. So instead he came back with even more subject to conditions. I won't get into the specifics, but the lender decided the easier path was to just try for a new appraisal. Luckily value still came in within the contract and we moved forward with no conditions with the new appraiser. ‍