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Additional Forms Requested After-the-fact

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Davy

Sophomore Member
Joined
Oct 3, 2016
Professional Status
Certified Residential Appraiser
State
North Carolina
So I end up taking on an appraisal of an older 1920's renovated farm house on 27 acres with horse facilities and realize I under priced my fee once I dug into comping out this creature. OK, lesson learned, but the UW comes back with a few revision requests INCLUDING an operating income statement and rental survey....UMMM, what?

So I complied with the UW requests for the minor things but then added that the two additional forms she requested that I "just throw in the appraisal" (no biggie right?) are not part of the original scope of work requested. I let her know, very nicely, that she can submit a separate request for both of these forms and that each will cost an additional $200 a piece. Honestly, I have never been requested to complete either of these forms, especially on a rural property like this, so I was guessing on the fee. I didn't want to nix the possibility of recouping some additional money with an exorbitant fee quote, although I never heard from her this past week, so I assume it won't happen.

Anyway, my question is how would you have handled the request? I would really like to know. To me, her request seemed unrealistic, almost stupid, and as if she thinks I work for free or something. I was somewhat taken aback at the request because my brain tried to reconcile what her rationale was. Makes me wonder what happened to common sense on the UW side of the isle? I have been a reviewer, but never an UW.
 

gregb

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Sep 3, 2011
Professional Status
Certified General Appraiser
State
California
Happens all the time, the lender forgets to order the rental survey and the 216, then returns later to add to the scope of the work. Usually happens when the subject is tenant occupied or if it is a sale, when the buyer is going to rent the property. At $400 you are not giving it away, so stick to the fee. Btw, this is a new assignment, consider all that is implied in that concept. :)
 

Davy

Sophomore Member
Joined
Oct 3, 2016
Professional Status
Certified Residential Appraiser
State
North Carolina
Happens all the time, the lender forgets to order the rental survey and the 216, then returns later to add to the scope of the work. Usually happens when the subject is tenant occupied or if it is a sale, when the buyer is going to rent the property. At $400 you are not giving it away, so stick to the fee. Btw, this is a new assignment, consider all that is implied in that concept. :)

Funny,but you are correct that this is a sale, BUT the buyer is a horse person and, to my knowledge, is not going to rent it out. Thank you for your thoughts on the fee: that helps me get a frame of reference.

I did look at what rents I could find to see if a rental survey was even possible, but didn't find any on acreage as large, especially with horse facilities. What impressed me the most was that the rents had to do almost entirely with the houses and did not seem to be influenced by any differences in acreage. I thought that increased acreage meant increased rent, but that isn't the case out here. I learn something new every day.
 

glenn walker

Elite Member
Joined
Oct 11, 2006
Professional Status
Certified Residential Appraiser
State
California
So you completed the report as owner occupied *** ???
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
I'd charge extra, weird the request came from the UW and not the client.
 

Davy

Sophomore Member
Joined
Oct 3, 2016
Professional Status
Certified Residential Appraiser
State
North Carolina
So you completed the report as owner occupied *** ???

The property was vacant since the owner had already moved out and I did note that on the 1004. Maybe that's why they asked for the reports? To me it all depends on the buyer and what they tell the bank. The listing agent is local and she said the buyer is also local who intends to occupy the property with their many horses. I just was never asked to produce these forms before so it threw me a bit.
 

Michigan CG

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Staff member
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Joined
Nov 1, 2006
Professional Status
Certified General Appraiser
State
Michigan
Your subject property is a horse facility but you don't tell us how big, how many stalls, how many are rented.

How many paddocks are there? Is there a staff? Is there an indoor riding arena? It there a viewing room? What is the quality of the viewing room?

What are the amenities of the facility? What services do they offer?

Why would you include a rental survey? Rents per stall?

Operating income statement? This would suggest that the subject property is an income-producing company where the Highest and Best Use might not be for residential.

I really hope you didn't (or don't intend to) use forms for these requests.

Lots of unanswered questions and at this point I think the UW is not qualified.

This is a $1,500 assignment for a lender who knows how these types of properties operate. For an AMC I would charge $2,500 based just what you have told us so far.
 

Davy

Sophomore Member
Joined
Oct 3, 2016
Professional Status
Certified Residential Appraiser
State
North Carolina
The highest and best use, in my opinion, is still single family residential. True, the owner could board horses, but I'm appraising the property as single family residential which is the intended use. You ask some great questions and I didn't want to get too much into the details, but what the hey. There is an 11 stall stable and a hay barn--nothing glamorous by any means, but not trashy or trashed. There is an open dressage 'arena' behind the barn (what appears to be a vinyl fence in an oval shape). The house is 1920's construction and was fully renovated and modernized in the mid 1990's. Although there are horse farms and boarding facilities in the area, they have somewhat of a different feel than this property. The entire property is vacant so there is no staff or anything of the sort--again, this isn't a glamorous hobby farm or anything, just a humble country home with some horse facilities. If I was buying the property, I would turn the stable into a large hot rod and ATV garage, but I digress. The topography is gentle downslope to the rear and rolling hills--shape is somewhat of an irregular rectangle with potentially enough acreage to subdivide, but the high tension power lines running across the length of the property makes subdivision an unlikely possibility from what I could determine. Although I don't know the mind of the buyer, she is supposed to have children who compete in horse riding events so the property suits her needs for what it is. I did a fairly serious cost approach on this one because the property adjacent has nearly the same acreage and has the visual of the power line externality. Oddly enough, I actually found a somewhat similar comparable sale that also had power lines running across it.

Thanks for your suggestions on what to charge for a horse property--appreciated.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
sounds like a hobby farm with a house... ( or a house with equestrian amenities)

Sounds like it could be a lower end boarding facility with a house , or a small farm for keeping of family horses with a nice house for the owner. Then again, with just "casual" type of barn and ring it could also appeal to a non horse person....some barns are turned into art studios or car storage or workshops etc.

FIW a dressage arena is not an oval...it is always a rectangle...though one can school dressage in any arena. IT sounds like a fenced riding ring/arena.. 27 acres sounds lovely ! (subdivision potential...I won't address that in this post, hopefully there is not a lot of subdivision going on in the area)
 

Michigan CG

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Joined
Nov 1, 2006
Professional Status
Certified General Appraiser
State
Michigan
True, the owner could board horses, but I'm appraising the property as single family residential which is the intended use.

Many appraisers make the mistake of saying "I am appraising it as a single-family home" when the Highest and Best Use could be something else. There is a good example posted last week sometime where the subject had a commercial building on the site. Be careful of that. :)

There is an 11 stall stable and a hay barn

This is a hobby where they could rent a couple stalls which tells me that adding an income statement and a rent schedule is not applicable and does nothing for you but add liability. Your lender knows nothing about this type of property. Are they trying to sell it to Fannie or Freddie?

Dressage, for stuck up people on the coasts. :) Most of the country has paddocks which are also typically square but significantly larger ranging from typically one acre up.
 
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