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

[Econobot]

So Lee, where is the word immediate in any text? I have great respect, but as some have noted here, some current (or former) Appraisal Board members have their own misguided interpretationjs of USPAP that may be detrimental to other appraisers.

In any case, again, I ask can the property be appraised as is? Just because the separate lot has potential H&BU as developed separately doesn't mean that the property can'f be appraised as is, with contributory value less than as sold off separately. What is the down side to this scenario from an appraisal or lending scenario? I also question the level of H&BU analysis if the owner is so stupid they would not sell but hold on to a piece of adjacent property worth so much more if the sold it. I seem to remember something about acting in their best interest in the definition of Market Value. How deep do you require H&BU to research absorption, vacancy rates etc?

This is very stupid question, is your job to value as vacant in HBU??? It is your job so tell me again how a buildable parcel's HBU is to sit vacant as if its surplus land. Not even understanding HBU proves the appraiser is not applying it, how can you apply what you don't know?? Pretty sad and probably why this bad advice has come out, they know a large segment of active appraisers don't know what their doing and will abide by the requests to lump parcels into value in use form filled trash to close a loan.

 

[J Grant]

HBU analysis does not involve a single owner's actions, please take a HBU course. I'm amazed you've been an appraiser this long yet exhibit zero understanding of your most important role. Software can fill out forms, educated humans are needed fo analyze a market.

A lecture from a newbie about taking a HBU course- who can't even glean that I NEVER said, or implied that HBU involves a single owner's actions! Paste where I said that lol.
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If I referred to any one owners actions it could be as an example, or that it represented a segment of market activity , just as we use a single owner's actions when we choose a comp. It never represents the whole market.

You are something else,- emulating a few here who target and bully- at least they have been appraising longer.

 

[Lee Lansford]

Stop lecturing about USPAP -Top poster here means numerical post count a month, personally I wish they would stop that category.

I never said HBU is what an owner would do. However, HBU is determined by the market, and if majority of owners of vacant lots are letting their lots sit vacant, it indicates they are holding them rather than selling them or building on them at this time. Which speaks to how the market views the lots.

Are you saying we should ignore the market and invent HBU out of thin air?

You either will not respond to this scenario or will deflect from it because it shows the flaw in your approach:

2 parcels. Each with H&BU separate from the other.

One parcel is SFR improved. The second vacant ready for development with great demand by builders.

Each parcel of land has MV = $350k (each).

In passing, the SFR improved parcel has a MV = $650.

The market views these properties separate from the other (though one is adjacent to the other and under common ownership). The market tells us that the buyer for one is not the buyer for the other.

The owner wants to refinance.

The lender comes to you.

You tell the lender what?

BTW, a scenario that I have been--at one time--engaged to appraise. I'll tell you how I correctly did this after you share how you would respond to the lender.

 

[Econobot]

Stop lecturing about USPAP -Top poster here means numerical post count a month, personally I wish they would stop that category.

I never said HBU is what an owner would do. However, HBU is determined by the market, and if majority of owners of vacant lots are letting their lots sit vacant, it indicates they are holding them rather than selling them or building on them at this time. Which speaks to how the market views the lots.

Are you saying we should ignore the market and invent HBU out of thin air?

Wrong, owners of lots are only a portion of the market and their behaviors alone do not determine a market. You can't stand to be identified as a top poster when you're wrong and confronted. It really irks me that you have no hesitation to jump into a discussion where you're completely and patently wrong. It's a waste of everyone's time on a forum designed to inform and even educate. If you're being told to take a course by other posters the last thing you should be doing is giving advice or your opinion. Nonetheless you continue to spew wrong information and I think this is the 3rd thread regarding multiple parcels? I know because I started one of them. You obviously need a class on HBU, what you've pointed out so far are lazy ways to NOT develop a HBU conclusion, "the owners want to leave vacant". Who cares, are there buildable lots for sale? How many? How many have sold? How long were they listed before consummation? Those questions require too much thought, its obviously easier to give the homeowner what they want....smh. I can't stand form fillers, your job is to value in HBU. If you don't know what that means then go take a course, which oddly enough is yet another USPAP requirement, gaining competency.

 

[glenn walker]

You have got to be kidding me, are you seriously claiming HBU is correlated to what an owner would do? This is the hallmark of an incompetent appraiser's HBU analysis. Not every owner is concerned with maximizing financial productivity. I'm sick of reading your I'll conceived theory and you're a top poster of bad information just like this Fannie Mae guidance, which will be rectified soon. Please understand USPAP and what the form is designed for, value in use is not market value. What is your job per USPAP? According to you it's to turn on forms so someone can get a loan. Good luck with that.

Many owners I have dealt with especially on single family homes do not even realize they had a separate parcel that may be able to be sold. This is because often the adjacent parcel has over the years melted into the Subjects lot by things like fencing the entire perimeter, building shops, detached garages , game courts etc. The older the property and the longer people live in it the less likely anything will ever be done. Also when one is listed often buyers just see the entire two parcels together and think they are getting one big over-sized lot and that what attracted them anyway. The Realtor also often does not even know it could be an-issue and so most MLS in my area say comments like hey look at this gem only $450,000 and owner will include parcel-2 for only an-additional $20,000. Now the buyer-borrower goes to his/her lender and the loan officer says sure no problem, have the sales contract completed at $470,000 and we can simply have escrow draw up a new deed including both subject and adjacent parcel. When appraiser gets order he/she will analyze the SC and understand the OMV includes the entire parcel as a whole. When he she does their selection of comparable's you look for sales to bracket the subjects total lot size. I had one where the combined total was like 18,000 Sq.Ft. so I found 6 sales comparable's that were on lot sizes that were between 12,000 to 18,000 Square feet after all was said and done based on lot size adjustments the market indicated buyers would pay anywhere between $15,000 to $25,000 for the additional larger lot size. So there you go no reason to get into some wacky esoteric H & B use analyses the market determined the H & B use and that was adding the additional separate parcel and placing one Fannie blanket mortgage was the best way to go for everyone.

My H & B use analyses was the same as the buyers and sellers and the market being buyers and sellers provided hard core proof- Otherwise the owner would have kept the separate parcel and the new buyer would not have wanted to pay an-extra $20,000 for it. NOW I KNOW J GRANT says financing has nothing to do with these issues but that extra $20,000 inclusded in one loan at 4% for 30 year amortized over 30 years only cost the new buyer an-additional $96.93 per-month. P.S both parcels were zoned the same and neighbor hood and market was all single family homes.

 

[J Grant]

Wrong, owners of lots are only a portion of the market and their behaviors alone do not determine a market. You can't stand to be identified as a top poster when you're wrong and confronted. It really irks me that you have no hesitation to jump into a discussion where you're completely and patently wrong. It's a waste of everyone's time on a forum designed to inform and even educate. If you're being told to take a course by other posters the last thing you should be doing is giving advice or your opinion. Nonetheless you continue to spew wrong information and I think this is the 3rd thread regarding multiple parcels? I know because I started one of them. You obviously need a class on HBU, what you've pointed out so far are lazy ways to NOT develop a HBU conclusion, "the owners want to leave vacant". Who cares, are there buildable lots for sale? How many? How many have sold? How long were they listed before consummation? Those questions require too much thought, its obviously easier to give the homeowner what they want....smh. I can't stand form fillers, your job is to value in HBU. If you don't know what that means then go take a course, which oddly enough is yet another USPAP requirement, gaining competency.

Stop interjecting things i never said to me such as owners alone determine a market. . Owners/sellers are half of transactions in a market. If buyers are not purchasing lots or purchasing lots at good prices, that is why owners are holding them instead of selling them. DOH . Of course I consider the questions you pose about lots on the market, once again you assume wrong ...that is going to get you in a lot of trouble one day.

Here you go again, lecturing about a class in HBU, sounds like you need ten of them.

 

[Econobot]

A lecture from a newbie about taking a HBU course- who can't even glean that I NEVER said, or implied that HBU involves a single owner's actions! Paste where I said that lol.
.
If I referred to any one owners actions it could be as an example, or that it represented a segment of market activity , just as we use a single owner's actions when we choose a comp. It never represents the whole market.

You are something else,- emulating a few here who target and bully- at least they have been appraising longer.

You hijacked my thread regarding multiple parcels weeks ago with your bad information. Now Fannie has issued more bad information for incompetent appraisers and you continue to be told numerous forum members that you're wrong. Get a grip and get off the threads or the forum maybe. Years of experience doing something the wrong way or not even understanding what you're doing mean nothing. The fact that you're being told to take a class but instead choose to ig ir the advice and attack others proves you're clueless. The worst part is you causing a very valuable thread to be filled with BS, other appraisers telling you how far off you are. Just go away, go take courses, do something else with you life than be the top poster. That spot should be filled by someone who gives sound advice. I get in this forum for information and lately all we get is JGrant knows everything. I'm sick of you're hijacking this site with your flawed opinions on how owners define a market. Just please stop and allow others to be active on this site.

 

[J Grant]

Many owners I have dealt with especially on single family homes do not even realize they had a separate parcel that may be able to be sold. This is because often the adjacent parcel has over the years melted into the Subjects lot by things like fencing the entire perimeter, building shops, detached garages , game courts etc. The older the property and the longer people live in it the less likely anything will ever be done. Also when one is listed often buyers just see the entire two parcels together and think they are getting one big over-sized lot and that what attracted them anyway. The Realtor also often does not even know it could be an-issue and so most MLS in my area say comments like hey look at this gem only $450,000 and owner will include parcel-2 for only an-additional $20,000. Now the buyer-borrower goes to his/her lender and the loan officer says sure no problem, have the sales contract completed at $470,000 and we can simply have escrow draw up a new deed including both subject and adjacent parcel. When appraiser gets order he/she will analyze the SC and understand the OMV includes the entire parcel as a whole. When he she does their selection of comparable's you look for sales to bracket the subjects total lot size. I had one where the combined total was like 18,000 Sq.Ft. so I found 6 sales comparable's that were on lot sizes that were between 12,000 to 18,000 Square feet after all was said and done based on lot size adjustments the market indicated buyers would pay anywhere between $15,000 to $25,000 for the additional larger lot size. So there you go no reason to get into some wacky esoteric H & B use analyses the market determined the H & B use and that was adding the additional separate parcel and placing one Fannie blanket mortgage was the best way to go for everyone.

My H & B use analyses was the same as the buyers and sellers and the market being buyers and sellers provided hard core proof- Otherwise the owner would have kept the separate parcel and the new buyer would not have wanted to pay an-extra $20,000 for it. NOW I KNOW J GRANT says financing has nothing to do with these issues but that extra $20,000 inclusded in one loan at 4% for 30 year amortized over 30 years only cost the new buyer an-additional $96.93 per-month. P.S both parcels were zoned the same and neighbor hood and market was all single family homes.

When you bought up financing to me, note I said it can affect if properties are eligible or not for financing. And in another long ago post, I asked if fannie was creating more of a market for these properties bu offering res terms financing on a vacant lot if purchased with a house adjacent... the fact is there is not a lot of those scenarios .

 

[J Grant]

You hijacked my thread regarding multiple parcels weeks ago with your bad information. Now Fannie has issued more bad information for incompetent appraisers and you continue to be told numerous forum members that you're wrong. Get a grip and get off the threads or the forum maybe. Years of experience doing something the wrong way or not even understanding what you're doing mean nothing. The fact that you're being told to take a class but instead choose to ig ir the advice and attack others proves you're clueless. The worst part is you causing a very valuable thread to be filled with BS, other appraisers telling you how far off you are. Just go away, go take courses, do something else with you life than be the top poster. That spot should be filled by someone who gives sound advice. I get in this forum for information and lately all we get is JGrant knows everything. I'm sick of you're hijacking this site with your flawed opinions on how owners define a market. Just please stop and allow others to be active on this site.

You are so dense you fail to realize "top poster " here refers only to the numerical posts a poster makes per month. Even after I pointed it out to you.

 

[Lee Lansford]

You are so dense you fail to realize "top poster " here refers only to the numerical posts a poster makes per month. Even after I pointed it out to you.

Do you want to take a crack at the scenario in my post #273?

I'm anxious to learn what you consider to be a proper approach to the appraisal problem.

I will understand if you prefer not to want to respond.