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

[Lee Lansford]

post 617: New definition of market value : "what NORMAL people do"...
"Anybody, whom appraisers deem to be not normal is no longer allowed to buy, sell, or own property! "That will be the big fannie reveal...

"Normal" as what is the norm for the market.

 

[George Hatch]

post 617: New definition of market value : "what NORMAL people do"...
"Anybody, whom appraisers deem to be not normal is no longer allowed to buy, sell, or own property! "That will be the big fannie reveal...

That's another strawman argument that nobody has made. You're not helping yourself here.

I notice you compared your 2-lot comp to the other homes and came to an opinion of how that sale compared to the others. I would have done the same. Regardless of what Fannie wants.

 

[J Grant]

"Normal" as what is the norm for the market.

I was joking around but yes, it is what is Typical for a market ...Bert decided that people who buy a lot and put up no trespassing or shoot signs and keep the lot for privacy, are not "normal"...sorry but if that motivation /use for a lot is typical for a market area, appraisers recognize it - I may not like certain things I see or uses for properties, but my personal judgments stay out of the appraisal.

 

[J Grant]

That's another strawman argument that nobody has made. You're not helping yourself here.

I notice you compared your 2-lot comp to the other homes and came to an opinion of how that sale compared to the others. I would have done the same. Regardless of what Fannie wants.

George I was joking being sarcastic ! Thanks though yes, the 2 lot home as a comp did not sell out of line than the others-I explained the sale etc but but saw no premium and the owner is keeping it vacant ( so far ) with large storage sheds on it. in area where people have workshops, run landscaping companies with their trucks in the driveway, that is why they buy in this area wih no sewer and still on well water, they want larger size lots to do their thing and if they had to assemble 2 to get it, no problem....

 

[George Hatch]

"I looked but didn't see any difference" is a solid gold comment to put into your report. IMO, anyways. Sometimes if I find something I didn't expect to find among my data I say it in those terms so that my reader doesn't get any ideas about me simply blowing the issue off.

I actually did that in my analysis of the 2 transactions that involved the house+extra that I ran into a couple weeks back. I *expected* them to sell for a discount off the sum of the retail values but in that particular case they didn't. And that's exactly how I explained it in my report.

FOR ME, I try not to have any opinions about how an appraisal is going to turn out until I get to the end. I've come to the difference conclusion than what I started out with too many times to value my initial impressions for being more than my initial impressions.

 

[RCA]

It literally says that the value of an assemblage may not be the same as the sum of its individual components. See my post #588.

"There was a discussion about this topic on the Appraiser's Forum and Denis Desaix MAI, SRA wrote the following:

Reporting two values (two appraisals) in a single report doesn't seem to be an issue as I see it.
The problem is adding the two values together to represent market value of the whole; it assumes there is no bulk discount.

If I am purchasing a house to live in and included in that sale is a separate lot, I'm likely not going to pay retail price for that 2nd lot. I'm going to discount it (especially if my intent is to sell it as soon as the deal closes; I'm going to consider my selling costs of the 2nd lot as well as any holding costs during the period)."

This is exactly what Fannie is saying. The market value of the subject assemblage is the value of the first parcel plus whatever the market will pay for the second parcel when it is sold along with the first.

I think what Fannie is saying is that no one really is going to pay extra for that parcel, unless they are a nut case, and in that case, it would rather call it "in-use" - value as a kind of derogatory term. From my perspective, to be clear, there are plenty of these people around, and it is really market value. But again, political, philosophical, moral, religious, etc., perspective may play a role here. Actually, I'm sure there are people, probably fewer than the population of nut-cases, who would buy extra land, just so they can say they own more acres. I say that of course, because I must be one of the nut-cases, well, caveat being, if I can get high-speed internet. That is to say, I'm not interested in excess land if it means I'm going to have to buy a dish, in fact, I'll live right downtown if I have to, to get 1G bps. But, IF I could get 1G bps with a quarter of mile radius of forest around, that would be cool. Except my wife wouldn't like that because she has an insatiable appetite for talking, I'm too busy to listen to her most of the time, so she needs neighbors. Life is not perfect. Not sure where that leaves our Market Value.

 

[Terrel L. Shields]

CE cheval est mort

 

[Mr Rex]

George is coming around to common sense. Lee is still on his original tangent. I hope the Fannie "announcement" is soon and the supporting USPAP update follows shortly. H&BU is not always, but sometimes, a reflection of market participants reaction to differences in the vagaries in RE transactions, and unfortunately some folks get stuck in the ditch of their narrow minded opinions rather than the here and now of reality (or Realty). Appraisals are supposed to support market participants reactions, not some artificially created definition in USPAP that is not reflective of "Market Value".

 

[Eli]

George is coming around to common sense. Lee is still on his original tangent. I hope the Fannie "announcement" is soon and the supporting USPAP update follows shortly. H&BU is not always, but sometimes, a reflection of market participants reaction to differences in the vagaries in RE transactions, and unfortunately some folks get stuck in the ditch of their narrow minded opinions rather than the here and now of reality (or Realty). Appraisals are supposed to support market participants reactions, not some artificially created definition in USPAP that is not reflective of "Market Value".

It's George. gotta luv him. USPAP rules.

 

[Eli]

The only thing higher than USPAP is a judge or jury. That scares me a little. This thing ain't right. Lord, I saw an appraiser get disciplined bad for quoting GLA wrong. I can only imagine what would happen for a misleading report on value definition.