Bulk contract for multiple homes

[Yimmydatulip]

I was requested to complete an appraisal for 3 single family purchases - all the same buyer and all the same seller. After seeing the contract I realized there were multiple other homes involved (12 total) and the sale price of all 12 homes combined was the contracted sale price. I requested individual sale contracts as there was no value specified for any of the homes in the contract (rather, they combined the values..whatever values they decided to give each home??..for the contracted sale price). They gave me an operating income statement on a spreadsheet showing me how they (the buyer and seller) came up with the sale prices..but it was not signed nor was the spread sheet any sort of contract. Can I even complete an appraisal (as a purchase) if I don't have at least something indicating what the sale prices are of the homes I'm appraising (that's in the form of a contract and signed by both parties?). They are telling me that they are having no issues finding other appraisers to complete the other 8 properties that are part of this bulk contract..I just don't even understand how this could work? PS - after asking for the individual contracts they replied with this: We have had other appraisals completed without individual contracts and they note the report that there are no individual contracts and they will divide the total purchase price by the number of lots. Please note that the lender is asking that we reassign the order if you are unwilling to complete it this way as they have already received one report with it done as stated above.

 

[Tim The Enchanter]

I don't think USPAP requires you to get a contract. But it's usual course of biz.

 

[Dublin ohio]

Analyze the contract and move on. Why would you need individual contracts. Same seller, same buyer. Bulk purchase. Does not change the fmv of each property.

 

[Yimmydatulip]

Analyze the contract and move on. Why would you need individual contracts. Same seller, same buyer. Bulk purchase. Does not change the fmv of each property.

I was not sure if I needed a contract to complete the appraisal as a purchase. I understand it does not change the fmv of the homes but if they (the borrower) is using the appraisal as a way to get a loan I assumed I needed the contract in order to know what the sale price of the home was (to both analyze and disclose it on the appraisal). The Lender is indicating - by the e-mail that I received - that they are simply dividing the sale price by the 12 homes so each one has an equal contracted value..but there is nothing in either the contract or the request (the request indicates there are sale prices for each of the 3 homes..all different..) but again there is nothing in the contract they sent to me that indicates there is any assigned value to each individual property.

 

[Russ Kitzberger]

You either have individual values or a portfolio value (might include individual values). You are valuing the former.

I do bulk projects for investors; what they negotiation is loosely based on the FMV of each property, with consideration given to the parts. They will sometimes pick a few to sell that don't meet their risk or target market matrix and drop them after the sale.

You already interviewed the participants to the transaction, you are being told the bulk price is relative to the investment value as a going concern or investment value relative to the portfolio income. The price doesn't have anything to do with the value of the properties individually, perhaps you can draw some GRM conclusions overall from the spreadsheet, but that is the analysis required to comply with USPAP, because what is being purchased is a bulk and you are valuing separate parcels individually.

You probably don't realize it, but you hit gold with that spreadsheet. If you were a GC doing investment analysis, it would get filed under data to aggregate for cap rate support of portfolio value.

"they note the report that there are no individual contracts and they will divide the total purchase price by the number of lots. Please note that the lender is asking that we reassign the order if you are unwilling to complete it this way as they have already received one report with it done as stated above."

Two issues there:
That is not the proper way to analyze separate properties in this instance.
The client is telling the appraiser to use non-accepted methodology.

 

[Yimmydatulip]

Analyze the contract and move on. Why would you need individual contracts. Same seller, same buyer. Bulk purchase. Does not change the fmv of each property.

You either have individual values or a portfolio value (might include individual values). You are valuing the former.

I do bulk projects for investors; what they negotiation is loosely based on the FMV of each property, with consideration given to the parts. They will sometimes pick a few to sell that don't meet their risk or target market matrix and drop them after the sale.

You already interviewed the participants to the transaction, you are being told the bulk price is relative to the investment value as a going concern or investment value relative to the portfolio income. The price doesn't have anything to do with the value of the properties individually, perhaps you can draw some GRM conclusions overall from the spreadsheet, but that is the analysis required to comply with USPAP, because what is being purchased is a bulk and you are valuing separate parcels individually.

You probably don't realize it, but you hit gold with that spreadsheet. If you were a GC doing investment analysis, it would get filed under data to aggregate for cap rate support of portfolio value.



Two issues there:
That is not the proper way to analyze separate properties in this instance.
The client is telling the appraiser to use non-accepted methodology.

You either have individual values or a portfolio value (might include individual values). You are valuing the former.

I do bulk projects for investors; what they negotiation is loosely based on the FMV of each property, with consideration given to the parts. They will sometimes pick a few to sell that don't meet their risk or target market matrix and drop them after the sale.

You already interviewed the participants to the transaction, you are being told the bulk price is relative to the investment value as a going concern or investment value relative to the portfolio income. The price doesn't have anything to do with the value of the properties individually, perhaps you can draw some GRM conclusions overall from the spreadsheet, but that is the analysis required to comply with USPAP, because what is being purchased is a bulk and you are valuing separate parcels individually.

You probably don't realize it, but you hit gold with that spreadsheet. If you were a GC doing investment analysis, it would get filed under data to aggregate for cap rate support of portfolio value.



Two issues there:
That is not the proper way to analyze separate properties in this instance.
The client is telling the appraiser to use non-accepted methodology.

Thank you Russ =)

 

[J Grant]

I was requested to complete an appraisal for 3 single family purchases - all the same buyer and all the same seller. After seeing the contract I realized there were multiple other homes involved (12 total) and the sale price of all 12 homes combined was the contracted sale price. I requested individual sale contracts as there was no value specified for any of the homes in the contract (rather, they combined the values..whatever values they decided to give each home??..for the contracted sale price). They gave me an operating income statement on a spreadsheet showing me how they (the buyer and seller) came up with the sale prices..but it was not signed nor was the spread sheet any sort of contract. Can I even complete an appraisal (as a purchase) if I don't have at least something indicating what the sale prices are of the homes I'm appraising (that's in the form of a contract and signed by both parties?). They are telling me that they are having no issues finding other appraisers to complete the other 8 properties that are part of this bulk contract..I just don't even understand how this could work? PS - after asking for the individual contracts they replied with this: We have had other appraisals completed without individual contracts and they note the report that there are no individual contracts and they will divide the total purchase price by the number of lots. Please note that the lender is asking that we reassign the order if you are unwilling to complete it this way as they have already received one report with it done as stated above.

Let them reassign the order ! They have other appraisers, take a pass, they sound "off", kind of bullying you with the threat of "other appraisers, telling you how to appraise it, not providing contracts etc

 

[The Warrior Monk]

You either have individual values or a portfolio value (might include individual values). You are valuing the former.

Ditto. The intended use of the appraisal needs to be identified. Sometimes the client needs the value of the portfolio of properties, sometimes they need the individual values of each property, or sometimes they need both. This needs to be clarified with the client.

 

[glenn walker]

No offense but it's above your pay grade and without a SC you have nothing to hone in on. This is done all the time by portfolio and private lenders. Usually a CG completes them and values them as a package, the reason individual purchase contracts are not written is the loan is most likley going to be one big blanket loan. Anyway-decline the order and let someone else do them. Normally it's appraisers complaining that we should not even be given purchase contracts now it's how do I do it without a purchase contract : ) LOL

 

[Mark K]

If there are 12 separate properties and they want 12 values, prepare 12 separate reports, collect fee, move on. Comment on the unusual sales contract. Don't make it more difficult than it is. This is not rocket surgery. If they want to add 12 values together for their use, that's their business.

If they want 12 properties as a single appraisal and they want one value for all 12, let them reassign.