"As Is" market Value vs. "As Is" market value to a single purchaser

[PropertyEconomics]

My first reading of the original question led me to conclude the value being sought was that of "investment value" .... however, in reading the many comments I believe those that have stated that its not a "specific single purchaser" but rather any party purchasing all remaining units may in fact be correct.
To that end, I believe that what the client is seeking is a discounted "bulk" value were all the remaining units to be sold at one time to one buyer.

Having bulk sales with which to measure "market value" as a bulk transaction or using such bulk sales to arrive at an appropriate discount off individual "retail value" would be necessary.

Isnt it interesting how simple words can be misunderstood and have more than one meaning. I would, post haste, confirm with my client exactly what value it is they are seeking and how they intrepret "value to a single party".

Good luck.

 

[Michigan CG]

My first reading of the original question led me to conclude the value being sought was that of "investment value" .... however, in reading the many comments I believe those that have stated that its not a "specific single purchaser" but rather any party purchasing all remaining units may in fact be correct.
To that end, I believe that what the client is seeking is a discounted "bulk" value were all the remaining units to be sold at one time to one buyer.

Having bulk sales with which to measure "market value" as a bulk transaction or using such bulk sales to arrive at an appropriate discount off individual "retail value" would be necessary.

Isnt it interesting how simple words can be misunderstood and have more than one meaning. I would, post haste, confirm with my client exactly what value it is they are seeking and how they intrepret "value to a single party".

Good luck.

I agree with what you say, but this is a review of an appraisal where someone has opined to a value. The reviewer must be competent to understand the proper way to come up with a value like this in order to review it.

If the original appraisal did not clearly define the value being appraised then it would not be possible to review the assignment other than to say that the appraisal is not reliable without that specific definition.

 

[BRCJR]

I agree with what you say, but this is a review of an appraisal where someone has opined to a value. The reviewer must be competent to understand the proper way to come up with a value like this in order to review it.

If the original appraisal did not clearly define the value being appraised then it would not be possible to review the assignment other than to say that the appraisal is not reliable without that specific definition.

Very good insight. If the reviewer does not (through no fault of their own) know what they are reviewing, they can't review it properly, until they find out what it is they are reviewing.

Kinda, sorta like what is 'is"?

 

[PropertyEconomics]

I agree with what you say, but this is a review of an appraisal where someone has opined to a value. The reviewer must be competent to understand the proper way to come up with a value like this in order to review it.

If the original appraisal did not clearly define the value being appraised then it would not be possible to review the assignment other than to say that the appraisal is not reliable without that specific definition.

At which point Mr Evans, I believe you and I would do the same thing. Contact the client and ask them to contact the original appraiser and ask for further clarification as to what was done, why it was done, and how it was done. Upon receiving the "revised appraisal" a full and complete review can be undertaken.

 

[LACKLAND27]

You only need an "as is" value if requested by the client, and that’s usually the land value + approvals. And generally the "as is" value is needed after the sub-division fails and the bank needs to value the mess that's on the site so they can sell the loan off.

 

[Ken B]

A little simplistic. Okay, much too simplistic. Okay, not even really close.

 

[Lost Cause]

Of all the answers provided, Ken is pretty much right on. While somewhat ambiguous, I have no doubt the terms "to a single buyer" do indeed mean a bulk sale to any one buyer, not one specific buyer. If that interpretation is correct, we would be talking about market value, not investment value.

One thing that everyone seems to have neglected is that this valuation request could be for the remaining condo units in this project to be held as rentals, rather than as a sellout. I have seen many of these in the current market, as many of these have transitioned from a Highest and Best Use as condos to rentals. Should that be the case, a direct cap is probably more appropriate than a discounted subdivision analysis.

 

[LACKLAND27]

certified residential RE appraiser shall not appraise a residential subdivi

Your number 3 might be incorrect also... A CR CAN do this if it was not for a FRT and depending on the amounts... And a CR can do a narrative report. There is not enough information to tell if a CR COULD NOT or SHOULD NOT have done the report!

For NYS this is the regs, see the last paragraph:

RULES AND REGULATIONS
TITLE 19 NYCRR
BOARD OF REAL ESTATE APPRAISAL
PART 1101
SCOPE OF PRACTICEThis information is not the official version of the Official Compilation of Codes, Rules and Regulations of the State of New York (NYCRR). No representation is made as to its accuracy, nor may it be read into evidence in New York State courts. To ensure accuracy and for evidentiary purposes, reference should be made to the official NYCRR. The official NYCRR is published by West, 610 Opperman Drive, Eagan, MN 55123, 1-800-344-5009.


§1101.1 Scope of practice for certified general real estate appraiser
A certified general real estate appraiser may appraise all types of real property.

§1101.2 Scope of practice for certified residential real estate appraiser
(a) The scope of practice for a certified residential real estate appraiser is limited to:

• (1) the appraisal of 1-4 family residential units without regard to value or complexity; and
  (2) the appraisal of vacant or unimproved land that is to be utilized for a 1-4 family residential unit without regard to value or complexity, or vacant or unimproved land for which the highest and best use is a 1-4 family residential unit without regard to value or complexity.

(b) A certified residential real estate appraiser shall not appraise a residential subdivision, except that a certified residential real estate appraiser may appraise individual properties within a subdivision.

 

[LACKLAND27]

Of all the answers provided, Ken is pretty much right on. While somewhat ambiguous, I have no doubt the terms "to a single buyer" do indeed mean a bulk sale to any one buyer, not one specific buyer. If that interpretation is correct, we would be talking about market value, not investment value.

One thing that everyone seems to have neglected is that this valuation request could be for the remaining condo units in this project to be held as rentals, rather than as a sellout. I have seen many of these in the current market, as many of these have transitioned from a Highest and Best Use as condos to rentals. Should that be the case, a direct cap is probably more appropriate than a discounted subdivision analysis.

Good point JH, the fall back rental position is becoming pretty common with all the failed subdivisions.