Tony in Ohio
Member
- Joined
- Jan 15, 2002
- Professional Status
- Certified Residential Appraiser
- State
- Ohio
Hi Guys and Gals!
I have a pretty odd one here I’m trying to think out and would like your input.
Background:
Guy bought 10 acres in an upscale community that has 2 older (1950’s with no updating) houses on it. He plans to several Hundred Grand in remodeling and additions to main home, and keep the other as a guest house. The market will support this, although guest houses are rare, they do exist in the high end market. Neighborhood is mostly small acreage lots, with values ranging from 200,000 for small ranches/capes to a few Mil for estate type homes.
Assignment:
Value property subject to completion for owners own info, although he may try to use appraisal to obtain financing. I already made it clear to owner that lenders need to order their own appraisals, but some may accept mine.
Problem(s)
It turns out that the 10 acres was recently split into 2 parcels with the “guest house” being on a landlocked 3 acres at the rear of the site. Access is only by easement allowing use of (shared) drive. To make it worse, back lot is titled into a relative’s name.
I don’t think situation has much affect on value at current value levels, but the separate back lot may impede marketability of the front lot after improvement.
Possible solution:
I have some freedom in format because it is a private assignment, but would like to try to keep it close to bank underwriting criteria, in case he is able to get a banker to accept it. I am thinking I should value the main home/parcel on a URAR, with a line item adjustment for the contributory value of the second home/parcel and about 5 pages of addendum explaining what I did and why. This way the owner gets a number for it all, and the bank can take the line Item out if they just want to loan on the main parcel.
My main worry on that is that it could be considered misleading because I think the contributory value could be different with separate ownership. I am a residential appraiser, and don’t do too many multi-parcel deals, so I definitely want some feedback on the issue of the “Larger Parcel”.
Finally, I have a few weeks, so time is not a problem, though I would like to keep it simple, because I thought my fee was good, but it is not going to be as nice as I originally thought.
Thanks for your help.
I have a pretty odd one here I’m trying to think out and would like your input.
Background:
Guy bought 10 acres in an upscale community that has 2 older (1950’s with no updating) houses on it. He plans to several Hundred Grand in remodeling and additions to main home, and keep the other as a guest house. The market will support this, although guest houses are rare, they do exist in the high end market. Neighborhood is mostly small acreage lots, with values ranging from 200,000 for small ranches/capes to a few Mil for estate type homes.
Assignment:
Value property subject to completion for owners own info, although he may try to use appraisal to obtain financing. I already made it clear to owner that lenders need to order their own appraisals, but some may accept mine.
Problem(s)
It turns out that the 10 acres was recently split into 2 parcels with the “guest house” being on a landlocked 3 acres at the rear of the site. Access is only by easement allowing use of (shared) drive. To make it worse, back lot is titled into a relative’s name.
I don’t think situation has much affect on value at current value levels, but the separate back lot may impede marketability of the front lot after improvement.
Possible solution:
I have some freedom in format because it is a private assignment, but would like to try to keep it close to bank underwriting criteria, in case he is able to get a banker to accept it. I am thinking I should value the main home/parcel on a URAR, with a line item adjustment for the contributory value of the second home/parcel and about 5 pages of addendum explaining what I did and why. This way the owner gets a number for it all, and the bank can take the line Item out if they just want to loan on the main parcel.
My main worry on that is that it could be considered misleading because I think the contributory value could be different with separate ownership. I am a residential appraiser, and don’t do too many multi-parcel deals, so I definitely want some feedback on the issue of the “Larger Parcel”.
Finally, I have a few weeks, so time is not a problem, though I would like to keep it simple, because I thought my fee was good, but it is not going to be as nice as I originally thought.
Thanks for your help.