can you appraise part of a parcel

[Wyoming]

I was asked to do a "Partial Release" by LSI which means they wanted the subject as if it were on only on a portion of its actual size. The site has been surveyed to be two lots but it has not been filed with the County. They want this on a 1004 which to me means FNMA guidelines.


"Appraising the Entire Site of a Property
Selling Guide, Part XI, Section 404: Site Analysis

Fannie Mae is clarifying

that the appraisal must include the actual size of the site and not a hypothetical portion of the site. For example, the appraiser may not appraise only 5 acres of an unsubdivided 40-acre parcel. The appraised value must reflect the entire 40-acre parcel."

How can an appraiser perform the assignment and not violate FNMA guidelines?

 

[Ken B]

Require a survey of the portion to be appraised. The survey boundaries are not hypothetical.

 

[Rich Heyn]

I was asked to do a "Partial Release" by LSI which means they wanted the subject as if it were on only on a portion of its actual size. The site has been surveyed to be two lots but it has not been filed with the County. They want this on a 1004 which to me means FNMA guidelines.


"Appraising the Entire Site of a Property
Selling Guide, Part XI, Section 404: Site Analysis

Fannie Mae is clarifying

that the appraisal must include the actual size of the site and not a hypothetical portion of the site. For example, the appraiser may not appraise only 5 acres of an unsubdivided 40-acre parcel. The appraised value must reflect the entire 40-acre parcel."

How can an appraiser perform the assignment and not violate FNMA guidelines?

Ken's advice on obtaining a specific legal description is excellent and a general purpose reporting format would be preferable to a 1004. But a 1004 doesn't automatically mean Fannie Mae guidelines apply. A partial release could logically be considered to fall under the umbrella of a mortgage finance transaction although you'll likely want to expand upon and clarify your intended use statement. You may also with to state something along the lines of: "This reporting format (1004 form) was used at the specific request of the client but the assignment conditions are not consistent with Fannie Mae or Freddie Mac guidelines. Consequently, the appraisal report is not to be used in any transaction involving Fannie Mae, Freddie Mac or any other entity with similar guidelines and requirements."

And statements like that should go on page 3 of the report, not in an addenda. That way, you can claim that you were "clear and conspicuous" in your disclosure.

 

[eld2310]

Does an assessor's delineation of a parcel's boundaries for the purposes of assessment and taxation create a "property?"

I don't think so. That the OP reports a deed for his subject would be indicative of this fact.

Having been a title examiner for 13 years, I'll take a crack at this. The short answer is: Yes, the assessor's parcel is the legal lot. In order to divide an assessor's parcel, permission must be granted from the appropriate authority in the form of a plat, short plat or lot line adjustment, which of course is approved or disapproved based on current zoning density requirements, setbacks if there are improvements, and the right of the public to object to the subdivision (around here the owner must post a sign on the property notifying the public that a subdivision is in process and gives a date by which they must make their objections known).

It doesn't matter how many different Deeds were obtained in the past in order combine the lots and form the greater parcel - once all the lots are merged together into one assessor's parcel, that is the only legal lot from that point forward. In other words - just because you have a deed from 1966 describing a parcel that has since been merged into a larger parcel doesn't mean that it's a physically and legally viable parcel now.

(The assessor can be petitioned to split the parcel without a formal subdivision, but that's very rarely successful in my experience.)

Some issues with parts of assessor's lots:

- If the mortgage affects only a portion of the tax lot and the loan is foreclosed, the lender now owns an illegally subdivided portion of a lot. Do they really want that? I seriously doubt it.

- If the subdivided portion ends up in the ownership of someone other than the person/entity that owns the remainder of the lot, how will that affect matters like ingress and egress? In other words, will someone end up landlocked? What about improvements, easements, setbacks, density requirements, etc.? This is why the cities and counties require formal subdivision and don't just let land owners chop up their land willy-nilly.

So I agree with CANative - you can appraise the smaller parcel, but make your appraisal is subject to a legal subdivision creating the parcel, either in the form of a recorded document or the assessor assigning that parcel a separate tax account number.

 

[Ken B]

Kind of makes me wonder how anyone ever appraised property for an eminent domain action.

 

[eld2310]

Rules affecting citizens don't apply to governmental entities, silly.

 

[Stone]

What you are describing is not universal.

As someone who appraises mostly rural lands throughout the state, there are many taxing districts that create tax parcels that exceed (sometimes greatly) the minimum lot sizes as required by zoning and municipal subdivision standards. In those cases it depends on the area, but most areas I work in do not require a plat to subdivide off a lot that meets zoning standards as long as the remaining lands which might include lands from that tax parcel and adjoining ones meet minimum size standards.

Now, there are areas where the tax parcels represent the legal lots. But, there are more areas I work in where it just isn't accurate.

 

[Ken B]

Recording a deed does not make it more legal.

 

[eld2310]

What you are describing is not universal.
...most areas I work in do not require a plat to subdivide off a lot that meets zoning standards as long as the remaining lands which might include lands from that tax parcel and adjoining ones meet minimum size standards.

Indeed my experience is limited to the Seattle/Tacoma/Everett/Olympia metropolitan area, where the various land use departments have never met a regulation they didn't like. Clearly I can't speak for the entire country. However, I still stand by the advice to make any partial-lot appraisal subject to a legal subdivision. If making it legal consists of just the county assessor rubber-stamping the new lot with it's own ID number, then that's great. I wouldn't rely on the mere existence a private survey or a deed, because in the end it's only a governmental authority that can deem a lot legal (what with them being "the law" and all).

 

[The Warrior Monk]

Having been a title examiner for 13 years, I'll take a crack at this. The short answer is: Yes, the assessor's parcel is the legal lot.

It's a taxable lot...that's all.

In order to divide an assessor's parcel, permission must be granted from the appropriate authority in the form of a plat, short plat or lot line adjustment, which of course is approved or disapproved based on current zoning density requirements, setbacks if there are improvements, and the right of the public to object to the subdivision (around here the owner must post a sign on the property notifying the public that a subdivision is in process and gives a date by which they must make their objections known).

An assessor's parcel (at least in the jurisdictions I work) is not the same as a building parcel. An assessor's parcel can be created without regard to zoning. A common example is a lot that overlays various taxing jurisdictions. There's an extreme example right around the corner from our office: one legal, nonsubdivisible building lot is divided into three assessor's parcels, since it is divided by a village boundary and a school district boundary.