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Can A Land Sale Be Used On The 1004 Grid?

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S is for spittman

Senior Member
Joined
Oct 24, 2005
Professional Status
Certified Residential Appraiser
State
Texas
Need answers related to FHA. I'm working on a difficult FHA REO property with absolutely no sales I would consider comparable. The biggest problem is that it is located on a steep terrain. The property is very difficult to access as parts of the driveway has washed away and other parts are very steep [almost a 45 degree angle]. It also appears that rainwater is not adequately diverted away from the back of the home being located almost directly against another part of a steep hill. All sales I have found so far would require SIGNIFICANT various adjustments. It makes me wonder how credible the adjusted sales price are. The only comparable I have found is a sale where the value was in the land. It is literally across the street so basically the same terrain. The sellers started to build a home, but only laid the slab down and a few rough-ins. There obviously would also be a huge adjustment for the improvements , but it is the only one I can think of to bracket the sales in stead of all across the border adjustments.

So does FHA allow me to use a comp like this?
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
You are not disallowed from using anything you think is a comp.
If you consider it support for your opinion, you can use it.

.
 

Michigan CG

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Professional Status
Certified General Appraiser
State
Michigan
You are not disallowed from using anything you think is a comp.
If you consider it support for your opinion, you can use it.

.


Eh, I completely disagree.
 

Michigan CG

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Professional Status
Certified General Appraiser
State
Michigan
Sammy,

The most ignored part of the appraisal process is the Highest and Best Use analysis. You have four questions to ask in the analysis, physically possible, legally permissible, financially feasible and maximally productive.

Until you answer those questions you cannot even start to fill out any form.

It sounds like you have a Highest and Best Use problem and you need to solve that problem before you can continue. When I run into these types of problems I typically have at least one full page of single-spaced Highest and Best Use narrative, most of the time it is close to two pages.

As to putting a land sale on a 1004 I would say doing so tells an educated reader that you have not yet determined Highest and Best Use. If you had, you would either being doing a land appraisal or a home appraisal. Land sales do not belong on the 1004 form.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
Eh, I completely disagree.

So your opinion is that Sammy can't determine that a partially improved lot sale isn't a comparable to the subject you haven't seen.............?

Interesting.

.
 

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
@Marion Rhodes

I see all

Inside-The-Crystal-Ball.jpg
 

djd09

Elite Member
Joined
May 20, 2009
Professional Status
Licensed Appraiser
State
Ohio
Simple , expand your "search criteria".
 

CindyR

Senior Member
Joined
Oct 26, 2003
Professional Status
Certified Residential Appraiser
State
Arizona
You are not disallowed from using anything you think is a comp.
If you consider it support for your opinion, you can use it.

.
I must agree with Marion on this one. Since this is a very unique property it may require very unique comparable sale data to support your analysis. Certainly you can not do a three and out appraisal and use a land sale as one of the comps. But later in the comp list to help illustrate your site perspective a similar land sale might be a helpful to the reader, IMHO.
 
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