Appraising a segment of a property

[Serge Paquette]

Was that sarcasm?

"Legal Description: In this case, the property is legally described as the eastern half of Parcel x.." or you could give a metes and bounds description, but that might be a little tricky if you don't have the right tools; however you would need to make it clear that in fact it is a hypothetical lot which has not been recorded and does not exist. And maybe "the best representation of the subject site is shown on the site sketch.."

 

[Michael Chu]

If you have a plat, you could use a graphics program and outline the best area that you feel represents what the client wants to see.
A picture is worth more than words, although not legal, it is still credible.

.

 

[Fred]

although not legal, it is still credible

I wouldn't have myself in the position of defending that phrase.

What legitimate intended use
1) requires appraising the land as if physically divided, AND
2) can't tell the appraiser where the division is?

I can't think of very many. On the other hand, I can easily think of not-so-legimitate uses that would generate a request like this.

 

[Michael Chu]

I wouldn't have myself in the position of defending that phrase.

What legitimate intended use
1) requires appraising the land as if physically divided, AND
2) can't tell the appraiser where the division is?

I can't think of very many. On the other hand, I can easily think of not-so-legimitate uses that would generate a request like this.

I realize I am on thin air. Just testing my boundaries. : )

 

[CANative]

outline the best area that you feel represents what the client wants to see.

???

Comment under USPAP 1-2(e)(v)

The information used by an appraiser to identify the property characteristics must be from sources the appraiser reasonably believes are reliable.

I don't think "feelings" cut it.

It's up to the client to identify the property to be appraised. It's up to the appraiser to identifiy the relevant characteristics of that property.

 

[Deleted member 128537]

You do not need a separate legal description! You simply need to make an extraordinary assumption that the house is being appraised as if on 10 acres only. The lender has every right to do this. It is a supplemental standard. Besides if this is a lender they are going to put a lien on the entire acreage. You would only need a legal description if this is not the case. However you do need to do due diligence and make sure that whatever exists on the total acreage will not decrease the value of the house. For example, if there are a bunch of junk cars on the site (any area of the 20 acres) you would have to make the lender aware of that.

By the way the reason that lenders do this is because they don't want to lend on surplus land.

By the way Henry Harrison deals with this issue on his web site.

 

[hastalavista]

You do not need a separate legal description! You simply need to make an extraordinary assumption that the house is being appraised as if on 10 acres only.

How can the appraiser make an Extraordinary Assumption of something that is known to be factually inaccurate?

 

[CANative]

Thanks Denis. Who wants to take the next one...

The lender has every right to do this.

Let's leave this one to Rich Heyn or Steve Santora.

It is a supplemental standard

 

[CANative]

Besides if this is a lender they are going to put a lien on the entire acreage. You would only need a legal description if this is not the case.

If the intended use is for a lending decision where the collateral is the entire property, then appraising only a physical segment would result in a development error because it is not the subject property. It's merely a portion of the subject property.

 

[The Warrior Monk]

You do not need a separate legal description! You simply need to make an extraordinary assumption that the house is being appraised as if on 10 acres only.

Since what being appraised doesn't exist, a hypothetical condition is necessary.

The lender has every right to do this.

The original poster didn't mention anything about a lender. However, if a lender is involved, you can be sure that you have a case where the lender does not want a hypothetical parcel appraised as collateral for a mortgage.

By the way the reason that lenders do this is because they don't want to lend on surplus land.

If lenders don't want to lend on surplus land, pretending it is not there does not make it go away, nor does securing the entire property as collateral for a mortgage.

But you did hit on a point. A mortgage broker or someone unfamiliar with lender guidelines may try to misrepresent a property so that it will fit into a program with a lower rate.

By the way Henry Harrison deals with this issue on his web site.