Additional Lots Additional Fee

[George Hatch]

We've all run into this situation and have learned the hard way in our respective pasts. 5 years from now you'll be answering the same question for some other appraiser. Pass it on.

 

[Tom4value]

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

Ha! This happened to me a few years ago, almost to a tee. On a refi, the AMC came back with a “revision”. Said the owner is now looking to buy 2 adjacent parcels and they now need a value with these parcels. I told them this is NOT a ”revision”. It is a totally new assignment as the scope of work drastically changed. I charged them not an “additional fee” but for a new appraisal.

So, for you
a. Absolutely!
b. Based on what you say, I would re-examine highest and best use. It may be worth more to value them as vacant lots for potential development.

 

[sputnam]

I would charge an additional fee. As already pointed out, you may have a different HABU.