Additional Lots Additional Fee

[caleb1004]

Hello fellow Appraiser Travelers ,

Quick question : I received an order engagement for appraisal of a subject property, standard ranch home on 1/2 acre lot. We appraised the subject as ordered on the engagement. The client is coming back now asking for 2 additional lots to be added to the appraisal , one to the left and one to the right of the subject, both vacant, separate parcels. The appraisal of the additional lots was not specified nor included o the original engagement. The additional lots were noted in the contract, on a very small sub section....(additional lots 8 and 9) ; but our engagement was to appraise lot 7 (the subject)

My questions:

a. since it was not specified in the engagement, do you charge additional fee for going back and including the additional vacant, separate legal parcels into the original report (which will change comps and value)
b. the additional vacant lots will place the subject land area in a situation where its overall total lot size will be greater than the standard or average for the area. there will be few if any comps....perhaps can find one to bracket the site size....would it be considered "excess" land area with minimal contributory value? (assuming lack of comparable with similar lot sizes)


thanks all!!
NC appraiser

 

[Terrel L. Shields]

since it was not specified in the engagement, do you charge additional fee

Yes.

he additional vacant lots will place

First who is the end user? If FHA or FNMA, then these VACANT lots are EXCESS lots and not Surplus. Therefore, you need to know whether the ultimate lender will accept them as part of the appraisal. lf it is a simple in-house bank loan, no problem. But I would still value them separately with sales (a separate sales grid) and add (sum) the values or perhaps a small discount if assuming the three sell together.

 

[caleb1004]

from a fee standpoint, would you charge small additional fee to go back and do this, since it wasn't specified on the original request?

 

[J Grant]

Is it a new assignment since the property rights have changed so drastically, or is it a continuation of the original with an additional fee?
If these are excess lots, it is an HBU complex assignment, and if you do not feel comfortable with it, IMO turn it down.

 

[Trihard]

You hold all the cards since they didn't give you the full assignment conditions. If its an AMC I would double my fee since they are most likely making bank off of this complex appraisal.

 

[Dublin ohio]

The appraisal of the additional lots was not specified nor included o the original engagement. The additional lots were noted in the contract, on a very small sub section....(additional lots 8 and 9) ; but our engagement was to appraise lot 7 (the subject)

Did you bring this discrepancy to the attention of the client before proceeding.

 

[Dublin ohio]

We appraised the subject as ordered on the engagement

Did the engagement specify only one lot or just the subject address

 

[George Hatch]

You should have noticed the common ownership of these other lots and asked for clarification at the outset. It's *common* for lenders to not realize their borrower owns and uses additional parcels besides just the one with the home on it. Except for properties where it's obvious that the adjacents are under different ownership I always look to see what's going on with adjacent parcels.

Next time, look. Then you won't have this problem.

 

[Dublin ohio]

You should have noticed the common ownership of these other lots and asked for clarification at the outset. It's *common* for lenders to not realize their borrower owns and uses additional parcels besides just the one with the home on it. Except for properties where it's obvious that the adjacents are under different ownership I always look to see what's going on with adjacent parcels.

Next time, look. Then you won't have this problem.

I have run into the situation on numerous refis. Always bring it to the attention of the client. Has resulted in a couple of land appraisals in addition to the initial 1004

 

[caleb1004]

thanks all for your comments. very helpful in trying to get this one squared away. much appreciated