40 acres

[joelfallin]

I recieved an order for an older 2 story house on 40 acres. I asked if it was used for farming and my client said no. I did the inspection and asked the home owner if the land was leased for farming, and she said her brother farms it. When I got back to the office, I called my client and told him that the land was leased for farming to give him a heads up. He called back and said he talked to the home owner and that all leases have been stopped and land is not used for farming. My client obviously does not want farming mentioned at all on the report. So....if home owner states to me that there is no farming happenin', does a statement such as "according to home owner, land is used for recreational purposes only and not for farming" ok to put on appraisal, even if my gut says otherwise. I don't have proof that it will be farmed and it just so happens that here in Wisconsin, a lot of fields are not planted yet.

 

[Midwest Guy]

Highest and Best Use is?

How about buildings and other agricultural fixtures?

Some spring harvests have not been planted, however it is the understanding of this appraiser that zzz was grown in past years.

 

[Webbed Feet]

I am having a great deal of trouble answering this in any sort of seriousness whatsoever.

Dude....... what in the ding dong is the highest and best use of the land? .. What in the hell is the MARKET doing with 40 acre sites like the subject there? ... Do you always take every hook you bite down on hook, line, and sinker? Your question makes it appear as if you have no idea what the market does in that area.... If so why are you taking assignments you are not qualified for?

Webbed.

 

[joelfallin]

easy dude

Highest and best use for a 40 acre corn field is corn. Don't try to insult my knowledge of the market. I am glad that I made the post. Everyone seems so helpful on this site.

 

[Pamela Crowley (Florida)]

Reminder: http://appraisersforum.com/rules.htm

Basics:

* Please be nice to each other!!!!!
* Please post the same thing only once.

(unwritten: We cannot see your body language and cannot hear your voice inflections, so try not be insulted, and try not to insult! It takes time and numerous posts for the others to get to know you.)

 

[stefan olafson]

Joel,

Webbed is just kind of ornery today! Back off a little, what he intimated in his post is the truth. You have to look at the underlying H&B use of the property. If it's for a farmstead and 38 acres of corn then that's probably what should be appraised. The lender is non agricultural, that's very apparent.

You have to use you judgement and experience to get the proper answer. I typically take a look at the neighborhood, are there any other 40 acre or so properties with farming activity? Does the farmstead include farm type buildings such as grain bins, machinery sheds, etc? What has sold in the market? Are there 40 acre parcels with a house that have sold without someone farming the land?

Take a look around you before getting started with the appraisal. If your gut instinct is to call it a farmstead/home site with 38 or 39 acres of corn ground, then that's what you report. You can easily find sales information on small tracts around Beloit I bet and probably can find a cap rate from those sales. Value the whole, not the home and site separate from the ag land.

Good Luck

 

[Ed]

Did you preview a lease or leases? Was there evidence of farming activity? Bank barn filled with farming equipment. Was there any evidence of livestock? Was there any evidence of crops? If the brother farms it, the land may or may not generate any income. How do you know the land is used for recreational use only? In my opinion you can still do the appraisal based on the extraordinary assumption that the information disclosed to the appraiser is considered to be accurate for the purpose of the appraisal, however, the appraisal is based on the residential use of the subject property only. The income the land produces, if any, was not made part of the value conclusion. Disclose what you know, what you visually inspected and just appraise it and let the lender make the final call. I think you're putting too many "what if's" into the report, before analyzing what you already know. Good Luck.....

 

[Michigan CG]

Forty acres of land that has been farmed in the past. At $150/acre rent is Mr. Homeowner going to give up that $6,000 in income?

With corm around $6/bu and soybeans at $13/bu, say 180 bu/acre of corn the brother is not gong to farm it and give up the $43,200 in gross farm income.

I don't think so.......

 

[hastalavista]

I recieved an order for an older 2 story house on 40 acres. I asked if it was used for farming and my client said no. I did the inspection and asked the home owner if the land was leased for farming, and she said her brother farms it. When I got back to the office, I called my client and told him that the land was leased for farming to give him a heads up. He called back and said he talked to the home owner and that all leases have been stopped and land is not used for farming. My client obviously does not want farming mentioned at all on the report. So....if home owner states to me that there is no farming happenin', does a statement such as "according to home owner, land is used for recreational purposes only and not for farming" ok to put on appraisal, even if my gut says otherwise. I don't have proof that it will be farmed and it just so happens that here in Wisconsin, a lot of fields are not planted yet.

What I'm missing here is this: Is the land being used for agricultural use or not? I'm no farmer, but do crops have to be ready for harvest in order to determine if a site is being used for agricultural use? (I'm sincere in that question, I really don't know. Every time I've gone out to a property in my market that is an orchard or vineyard, its very apparent regardless what season it is).

If I inspect a property that is vacant, I then call the client to let them know, and then I get a call-back from the client telling me that it is really occupied, the owner just hasn't moved the furniture in (and, this has actually happened more than once at our office), what would I do? I would indicate the house as being vacant because that is what it is.

If you've determined that the subject is being used for agricultural use, than my suggestion is to indicate it as such. Someone telling me a different story with a wink-wink, nod-nod isn't credible. My bottom line is this: What does the intended user who is going to rely on the report for a lending decision expect me to report?

Good luck!

 

[joelfallin]

Thanks

Thanks for your input! I appreciate it. I told my client that it is a farm and that there was sign that it was farmed last year, and there is a pole shed with a tractor and corn planter in in it. He went off on me for a while how this will ruin his deal and that he had been working on this one for 2 months now and that they (the borrowers) are good friends of his and they got hit buy a tornado 2 years ago, and that the lady was in tears.....so I just told him I would lie on the appraisal for him. Just Kidding of course. I told him I will walk away from the asignment and refund the home owners money. I don't want anything to do with what he is trying to have me do on this deal!!!