Bad advice from Fannie--"Multiple Parcels" from Dec. 2019 'Appraiser Update'

[J Grant]

Au contraire!

I see that you avoid the key point of Carnivore's illustration above.

A correct--which you avoid--analysis of Carnivore's illustration would result in X'ing NO to the question (page 1, fannie form) "Is the H&BU...as improved the present use?" where you chose to combine the two as though one. Why you continue to choose to miss this, I know not.

I agree, Carnivores example would result in check no for HBU, since the contributory value of the improvement is so low. However, that is not true for all scenarios, as in any appraisal, the subject property including the adj vacant lot contribution has to be appraised on a case by case basis

 

[Carnivore]

Something to think about.

What they are attempting to do is assemblage/plottage without really doing it.

In my city we have a neighborhood York-Chester. Back in the day this neighborhood Lot size were 20' or 25' can't recall exactly(was not alive then lol). So when you wanted to build your house you chose how many 25' ft lots you needed to accommodate your new home. This was assemblage. The result of that assemblage yielded a higher Value SFR because of the improvement. The assemblage of the multiple lots translated into a Higher Site Value.

 

[Terrel L. Shields]

If you read over that it becomes a little confusing and/or contradictory

It is amazing after 25 years plus, and several new selling guides and letters FNMA cannot spell it out in plain language. And apparently are so myopic they don't even understand how poorly that reads. Just spit it out Fannie. For crying out loud. Personally I would do what I do anyway. Not that I do secondary market. If two lots are adjacent and one is vacant, I value it as excess for its separate lot value. If the improvements lay on both (or 3 or 33) I treat it as one big lot. They are one economic unit AS IS...if across the road, then I am doing a partial estate if only one deed or tax card.

 

[Lee Lansford]

I agree, Carnivores example would result in check no for HBU, since the contributory value of the improvement is so low. However, that is not true for all scenarios, as in any appraisal, the subject property including the adj vacant lot contribution has to be appraised on a case by case basis

You miss the point of Carnivore's illustration as you gloss-over (again) H&BU analysis.

Oh, well.

 

[George Hatch]

Honestly, it looks more to me like the reasoning is based more on lender expediency as a user of these appraisals than as expert instruction on how to appraise.

They have seen what appraisers as a group apparently are/are not capable of delivering on a consistent basis and are simply choosing the path of least resistance. It's (probably) not malice or deceit or even ignorance, but expediency.

Look at the extent of disagreement expressed in this very thread among forum regulars, virtually all of whom have engaged in HBU threads in the past. If *this* group has that much disagreement about what is/isn't in such an assignment how can Fannie expect any better out of the entire appraiser population as a whole? Most appraisers never entertain these types of discussion.

 

[Lee Lansford]

It is amazing after 25 years plus, and several new selling guides and letters FNMA cannot spell it out in plain language. And apparently are so myopic they don't even understand how poorly that reads. Just spit it out Fannie. For crying out loud. Personally I would do what I do anyway. Not that I do secondary market. If two lots are adjacent and one is vacant, I value it as excess for its separate lot value. If the improvements lay on both (or 3 or 33) I treat it as one big lot. They are one economic unit AS IS...if across the road, then I am doing a partial estate if only one deed or tax card.

The Selling Guide on this topic is OK with addressing proper appraisal procedures and valuation. The advice in the newsletter is anything but that. I think that the language in the newsletter will...sooner rather than later...be (show shall we say?)...."clarified" by Fannie.

 

[Lee Lansford]

Honestly, it looks more to me like the reasoning is based more on lender expediency as a user of these appraisals than as expert instruction on how to appraise.

They have seen what appraisers as a group apparently are/are not capable of delivering on a consistent basis and are simply choosing the path of least resistance. It's (probably) not malice or deceit or even ignorance, but expediency.

Look at the extent of disagreement expressed in this very thread among forum regulars, virtually all of whom have engaged in HBU threads in the past. If *this* group has that much disagreement about what is/isn't in such an assignment how can Fannie expect any better out of the entire appraiser population as a whole? Most appraisers never entertain these types of discussion.

I really do believe--given that the language in the recent newsletter is contrary to what is correctly proscribed in Fannie's Selling Guide on the topic--that this will be rectified by Fannie.

 

[Econobot]

That you're all over the place with the central issue that began this thread is interesting but not particularly relevant. But, I will be certain to alert the 3 (that I am aware of) former members of the ASB who share my concern regarding this issue that they should instead turn to you to "learn" of the errors in their thinking this matter .

I've haven't been in the business as long as most on here but I understand HBU analysis. Your job is to value in HBU every single time, it's how you develop a credible value, in part by identifying exactly what's there and why...what's the most maximally productive scenario that is also legal, feasible. When the town is pretty much built out with minimal land listings, hard to ignore. But easy to completely n kurt understand if you're only filling in forms. All of this misinformation from a top poster just proves a sad point in that many folks are simply form filling number hitters. Not understanding your basic fundamental point of origin, HBU analysis. Instead it's a discussion about shoveling exactly what the borrower wants into a form to get a form into folder and get pens to paper at closing. Smh folks....when I talked to the latest agent about this basic theory she was vaguely familiar and agreed that with a seperate use which is highest and best only a misleading appraisal would value them together. I'm going to have my plumber run garden hose in the walls of my next house because it's cheaper....this is no different than this guidance. Forget basic industry code, just get r done.....

 

[Michigan CG]

All of this misinformation from a top poster just proves a sad point in that many folks are simply form filling number hitters.

She has had a history of being on the wrong side of basic appraisal practice for a number of years.

 

[J Grant]

She has had a history of being on the wrong side of basic appraisal practice for a number of years.

Correction, what some on the board disagree with me on.. and I am not always proven wrong on threads, often my view is supported by others, if at times I am "wrong" will admit it,

If I was on the "wrong side of basic appraisal practice" for a number of years I doubt I would still be engaged by clients of properties, from basic to multi million $ complex properties for over a 20 year career. My reports do get reviewed , esp the high value ones where they often order 2 appraisals. And I've done hundreds of field reviews, which get scrutinized

There was a recent prior thread on this topic of adjacent vacant lot and HBU, and a couple of appraises/ cert gens agreed with me on that thread ( look it up)./ Mr Rex agreed with me on this thread, - he was smart enough to stop posting after a few.