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

[George Hatch]

George- Please remind me of the address where it went to separate buyers.

Lee- I doubt you could provide credible results on the MV of 10 SFR sold from one seller to one buyer, I would turn down the assignment. But with two lots it's quite common, and it makes rational sense as to why it's common.

I don't know what kind of properties Lee appraises but I get assignments involving multiple parcels and uses and I most certainly do return credible results - by appraising them separately as per their most profitable use. As I said from the beginning, that is usually the easiest way to handle such situations.

Financing terms are an underwriting concern. It's what lenders decide; not appraisers.

I was looking for the post where I mentioned Maple but couldn't find it. That's where the other transaction I mentioned is. Perhaps a reasonable question to ask here is how could I find it when you apparently didn't?

 

[Andrei Fin]

I didn't find it because I didn't look, because I was never asked to appraise that property. But if I did, I would compare apples to apples.

Word problem:

Subject is 2 adjacent parcels, one of which has a 1990yb home of 2000sf and the other of which is vacant - total lot area between the two is 15000sf.

Which is the most comparable sale transaction to your subject property attributes?

A - the sale of 2 adjacent parcels, one of which has a 1990yb home of 2000sf and the other of which is vacant - total lot area between the two is 15000sf.

B - the sale of 2 adjacent parcels, one of which is a 1939yb home of 2300sf in need of updating, on a major thoroughfare, and the other of which is vacant - total lot area between the two is 1 acre.

I forgot to mention, your subject and Comp A are in a flag lot configuration while Comp B is side-by-side.

 

[George Hatch]

George- Please remind me of the address where it went to separate buyers.

Lee- I doubt you could provide credible results on the MV of 10 SFR sold from one seller to one buyer, I would turn down the assignment. But with two lots it's quite common, and it makes rational sense as to why it's common.

I didn't find it because I didn't look, because I was never asked to appraise that property. But if I did, I would compare apples to apples.

Word problem:

Subject is 2 adjacent parcels, one of which has a 1990yb home of 2000sf and the other of which is vacant - total lot area between the two is 15000sf.

Which is the most comparable sale transaction to your subject property attributes?

A - the sale of 2 adjacent parcels, one of which has a 1990yb home of 2000sf and the other of which is vacant - total lot area between the two is 15000sf.

B - the sale of 2 adjacent parcels, one of which is a 1939yb home of 2300sf in need of updating, on a major thoroughfare, and the other of which is vacant - total lot area between the two is 1 acre.

I forgot to mention, your subject and Comp A are in a flag lot configuration while Comp B is side-by-side.

Uhh, not a flag lot. You should have looked look at the assessor map. I did. I think I even commented on seeing other such tandem lots in the area as well as the usable lot area vs gross lot area on the vacant parcel. That's because I know how to appraise land so I know to look for such things.

At least a couple of the vacant land sales I had previously spotted also had easement access situations, so isolating the adjustment factor for the easement is simple.

So, what's your answer to the word problem? Do you think A more similar or less similar to the subject than B?

 

[Andrei Fin]

I don't know what kind of properties Lee appraises but I get assignments involving multiple parcels and uses and I most certainly do return credible results - by appraising them separately as per their most profitable use. As I said from the beginning, that is usually the easiest way to handle such situations.

Taking the easy way out again, just like your 15% GLA search. The problem is that if you believe the falsehood that HBU = market value, there's a good chance you overvalued those parcels.

 

[George Hatch]

Taking the easy way out again, just like your 15% GLA search. The problem is that if you believe the falsehood that HBU = market value, there's a good chance you overvalued those parcels.

One of us has already identified several site sales data in that market area in support of our comments and observations, and the other is going out of their way to refrain from looking for such sales. One of us looked for SFRs on large lots vs SFRs on small lots and the other ran a search by price and took the top 10 because they had the highest price. One of us has accrued thousands of hours of experience in appraising land and the other has never done even one such assignment.

You're in way over your head in this discussion. My HP12c has forgotten more about appraising land than you'll ever learn. I've already given you several pointers on how to solve this appraisal problem but you're not having it because you're still fixated on 2 parcels - 1 loan. Which by itself is not an appraisal issue.

 

[Andrei Fin]

One of us has already identified several site sales data in that market area in support of our comments and observations, and the other is going out of their way to refrain from looking for such sales. One of us has accrued thousands of hours of experience in appraising land and the other has never done even one such assignment.

You're in way over your head in this discussion. My HP12c has forgotten more about appraising land than you'll ever learn. I've already given you several pointers on how to solve this appraisal problem but you're not having it because you're still fixated on 2 parcels - 1 loan.

You don't understand the problem to be solved (what are both properties worth when sold together) so you've substituted your own completely different problem (what is each property worth when sold separately).

 

[George Hatch]

I understand the problem to be solved well enough to ask you the fundamental question you've been ducking for the last 3 weeks. I rephrased it today because you're being stubborn about this, but it's still the same question I've been asking you all along.

A or B?

 

[Andrei Fin]

Your word problem was never actually in play, mine was.

 

[George Hatch]

Actually, that word problem is modeled after your example and includes the same variables, albeit with slightly different sizes.

I'm not going to allow you to get away with ducking the question . I'm going to keep posting the screen grab and everyone is going to see how stubborn you're being in refusing to address this central issue.

 

[Andrei Fin]

B is the best comp, and it also happens to be the subject's very own sale two years prior, and along with the subject contract which is a pending sale of an identical property, it points to the use of comps like A for the sales analysis. And you dismissing this data in favor of one far less similar sale because you are biased that HBU=market value has led you to grossly overvalue the property.