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

[Andrei Fin]

One buyer, one seller, one contract, one transaction. One house in Los Angeles and the other in San Diego.

I'm turning that one down every time

 

[CANative]

I would too. But it's not all that different than what we're talking about (if one strips it down to property rights and improvements.)

 

[djd09]

wow that is far fetched.

 

[Mark K]

I'm getting the distinct impression that the median IQ on our Forum is in decline.

I don't think the median has declined.

However, a few outliers have certainly lowered the mean.

 

[George Hatch]

Time will tell on this issue. If Fannie ends up clarifying their comments then that much will be self-evident.

 

[George Hatch]

It is the same problem because if the owner defaults then Fannie will be the owner.

You need to stop thinking like a lender. That is not the appraiser's job.

 

[Stone]

Step one, identify the problem. Your client is asking- since the two parcels are being loaned on together as one property, can you please tell us what this property would most likely sell for? Omg it's so hard. Imagine that it's not Fannie Mae but a homeowner asking you, he's got to sell his house plus the lot next door in the next 90 days and wants to know what he would probably get for it. Solve the problem or turn it down if it's not in your wheelhouse.

This is a perfect example of not understanding the issue. It has never been about not being able to appraise what they want. It isnt hard to understand what they want. It isn’t even unreasonable what they want - it absolutely is. What doesn’t work is checking the box and saying it is market value no matter how much you want it to be that simple. Doing it within the confines of form world is the problem. You and Grant and others can pretend it is market value, but that doesn’t make it so. You can’t mix the two but call it one. You can absolutely value it, but checking the box isn’t accurate.

But, here’s the thing: as George has pointed out before, it is highly unlikely you’ll ever hear about it. Nobody who’s hiring you cares it isn’t right, and they’re hardly going to call you on doing what they asked. That’s why I’ve largely stayed out of this. But, it doesn’t take a super appraiser or USPAP god to understand the problem. It really isn’t that difficult. So carry on, just don’t pretend it is market value unless you have a new definition that allows for value in use as part of it.

This thread has been enlightening to me in illustrating how many people actually don’t spend time performing actual HBU analysis.

 

[Michigan CG]

This is a perfect example of not understanding the issue. It has never been about not being able to appraise what they want. It isnt hard to understand what they want. ............ You and Grant and others can pretend it is market value, but that doesn’t make it so. You can’t mix the two but call it one. ..................

................ So carry on, just don’t pretend it is market value unless you have a new definition that allows for value in use as part of it.

This thread has been enlightening to me in illustrating how many people actually don’t spend time performing actual HBU analysis.

Well said. But you will be shrugged off as another who doesn't get it by certain people.

 

[Stone]

Well said. But you will be shrugged off as another who doesn't get it by certain people.

Yeah, I know. I expect nothing more.

 

[J Grant]

Market Value in Use is Not an Oxymoron - Counselors of Real Estate

In real estate appraisal, "Market Value in Use" assumes the property is sold in combination with other assets as a group. A special-purpose property will only bring its market value in use if it is sold together with other assets as part of a going concern.

www.cre.org

above relevant to the topic, by an MAI.
It would not be "pretending" a market value, the value in use is what an element (the vacant lot ) contributes to the whole, and the whole property ( the 2 parcels) are appraised for their market value