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

[J Grant]

Nonsense.

Following your advice you would combine a conforming parcel with SFR improvements set upon a 60' x 150' in-town lot with the adjacent 80 acre parcel ready for development into a subdivision of 200 SFRs and offer one opinion of MV for the two due to the fact that the lender asked you to do so for a refinance appraisal for a loan that is headed to the secondary market.

I don't want to misrepresent, but, this is what you are asserting.

That's an outlandish example and I would never assert that, so yes, you are misinterpreting - just because I under stand how ONE vacant adjacent lot selling along with a house can be conveyed and the HBU reconciled with a value in use for the one lot, does not mean it would apply to an adjacent 80acre parcel that can be subdivided ! Stretching much...Plus the fact you seem incapable of realizing that since post one I have not been treating this as "combining"...

 

[alebrewer]

Value in Use: “The value of a property assuming a specific use, which may or may not be the property's Highest and Best Use, on the effective date of the appraisal. Value in Use may or may not be equal to Market Value, but is different conceptually”. (The Dictionary of Real Estate Appraisal, 6th Edition). The terms Value in Use and Use Value have the same meaning in the dictionary.

read this and apply...the HBU value of a vacant May or may not be equal to the MV (in a $ amount. ) One would need to reconcile the HBU and value in use and explain it - some here refuse to believe it can be done.

So I was actually asking two questions if you re-read my post. Simple yes or no would work fine. I appreciate your recitation of the difference between value in use and market value, but that really wasn't the question(s)...

 

[Mr Rex]

and for purposes of this discussion, the GOD of residential mortgage lending has spoken IN WRITING.

 

[Lee Lansford]

Not sure who what was directed at? Repeating H&BU analysis doesn't really answer the question, Lee?

Read the rest of my words there.

 

[Michigan CG]

What about the scenario where there are two separate parcels, but the determination is that one parcel is simply surplus land (let's say due to it being landlocked), and that the combined size of the two parcels is typical for that market. Heck - it might not even be surplus - it might have significant value. In that case, you could provide an MV estimate of value including both parcels, correct? The agencies will allow encumbering two (or more) parcels under one loan...

The discussion is not about (sucky) surplus land but about (excellent) excess land where the Highest and Best Use of the vacant parcel is to be developed.

 

[alebrewer]

Read the rest of my words there.

I did - even went back and re-read them, but didn't see where you answered the two questions I was asking...

 

[Mr Rex]

The discussion is not about (sucky) surplus land but about (excellent) excess land where the Highest and Best Use of the vacant parcel is to be developed.

Immediately? Is that word in the H&BU tests? Is that really part of the tests? If so, I stand down. Otherwise its total Bullsheet

 

[alebrewer]

The discussion is not about (sucky) surplus land but about (excellent) excess land where the Highest and Best Use of the vacant parcel is to be developed.

I get that - I was just making sure I was following the consensus of the group. I kind of got lost in all the peripheral stuff.

 

[Lee Lansford]

That's an outlandish example and I would never assert that, so yes, you are misinterpreting - just because I under stand how ONE vacant adjacent lot selling along with a house can be conveyed and the HBU reconciled with a value in use for the one lot, does not mean it would apply to an adjacent 80acre parcel that can be subdivided ! Stretching much...Plus the fact you seem incapable of realizing that since post one I have not been treating this as "combining"...

LOL.

You continue to confuse the desire to convey with somehow being the same thing as appraising 2 separate properties.

I would love to see your appraisal where you have offered one opinion of MV of 2 separate and distinct (each having a H&BU separate from the other) parcels--staying with one improved, the other vacant)--in order to learn how you responded to the question as to H&BU as improved on page 1 of the Fannie form.

 

[J Grant]

The discussion is not about (sucky) surplus land but about (excellent) excess land where the Highest and Best Use of the vacant parcel is to be developed.

Value in Use: “The value of a property assuming a specific use, which may or may not be the property's Highest and Best Use, on the effective date of the appraisal. Value in Use may or may not be equal to Market Value, but is different conceptually”. (The Dictionary of Real Estate Appraisal, 6th Edition). The terms Value in Use and Use Value have the same meaning in the dictionary.

Given the above, do you see a way to reconcile the HBU of vacant lot ( Potential to be developed) and value in use ( as of eff date the lot is not being developed ) The above says value in use ($) MAY be equal to the market value..which imo is the key to resolution for the vacant lot aspect of the appraisal.