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

[Lee Lansford]

They are being sold together but not "combined" into one lot - they are both encumbered under one mortgage. There is one valuation though for the two as sold together...

So...when appraising--for, say, a refinance and conforming to Fannie--2 as though 1 (one SFR improved, the other vacant) when each has its own H&BU separate the one from the other, do tell us what the appraiser's explanation of H&BU would look like. Please, where the market does not combine the two as though one, only you the appraiser doing that. Take your time.

And...not to forget: How might you get away with not X'ing the NO box to the question (paraphrasing) "Is the H&BU as improved the current use?"

 

[Michigan CG]

Economies of Scale says the two lots combined would bring less than the two lots separated. If so, is a combined lot the H&BU?

What am I misunderstanding?

You are missing nothing.

 

[Michigan CG]

I think the 'value in use' refers to their take that, if the land can't be sold off (as it is encumbered by the first lien), the owner's only option is to 'use' the land at whatever value there is in the utility of the additional lot which, in most situations, would be inferior to the value of the lot if it could be sold (e.g. MV).

1. A lien has nothing to do with highest and best use.
2. I have appraised multiple properties for lot line transfers where the owner sells part of his/her land to the neighbor and the lien holder asks for a before and after value.

 

[alebrewer]

1. A lien has nothing to do with highest and best use.
2. I have appraised multiple properties for lot line transfers where the owner sells part of his/her land to the neighbor and the lien holder asks for a before and after value.

Huh? I think you missed the point of my response. I was opining on why, IMO, fannie used the term 'value in use'. Please try to understand the context of the response before starting an unnecessary argument.

 

[Michigan CG]

Please try to understand the context of the response before starting an unnecessary argument.

I am not trying to get into an argument. The internet is flawed as it does not show the intent of the poster, tone of voice of the response and the way the response is interpreted.

 

[George Hatch]

When the owner's actions are contrary to H&BU, what would the appraiser's analysis of H&BU look like?

Individual owners act contrary to expert advice all the time. Those aren't the perspectives appraisers are trying to emulate.

 

[George Hatch]

You are missing nothing.

... under normal circumstances and assuming market participants are acting rationally WRT HBU. That's far more common for some property types than for others.

 

[glenn walker]

If I was a moderator--I would-shut this thread down because it is no longer on point and has nothing to contribute to the original issue : LOL

 

[Carnivore]

When the owner's actions are contrary to H&BU, what would the appraiser's analysis of H&BU look like?

Well thats a problem also...

The appraisal is to be AS-IS and so the task is to determine contributory value towards the whole

I would research the market demand for parcel(s) similar to the subject extra site. It is not simply determining if there is value. Excess land that has low market demand may have an interim use as surplus land until a greater demand exists. Why I say this is vacant unimproved land can take quite awhile to sell.

That my comment I am sticking to it! LOL

.

 

[J Grant]

View attachment 42854

Read the fannie content again ., people. It says nothing about combining 2 lots into one larger lot. It says, the lots are contiguous.

It says nothing about putting the them into one deed. It says they are to be covered by a valid first lien.