Can you value as vacant.if its improved?

[Mr Rex]

So lets appraise the Chernobyl site As Is without a HC, since the underlying land is unaffected by the improvements as per the allowed verbiage of the founding fathers of USPAP....:icon_idea:

 

[PropertyEconomics]

Trust the Q & A. Wiley is right. The dissenters are over-thinking this. Trust the Q & A and be done with it. If the ASB or the CAT (Max in my case) wants to do it different then let them rule from on high. The rest of us gentiles will not pretend we are smarter than the ASB and again you guys do this same thing all the time in one fashion or another without evoking a hypothetical... You call them disclaimers.
The land is there. The improvements are there. You can appraise the entire fee simple. You can appraise a portion of it without calling a hypothetical. You can appraise a part of the real estate. You can appraise a portion of it without the HC.
Nothing personal but that is a distorted view of appraisal science...how often is this phrase found in the body of knowledge of appraisal science..if there is such a thing...

from Mastering Real Estate




the list is endless....nothing prevents the appraiser from not commenting upon the improvements present nor their impact upon the value. But if the property is at its HBU, then the land value = its vacant value. If not, comment on it. In the case of manufactured homes, it is frequently that the improvements are owned by one person and the land is owned by someone else, likewise a lender who lends on the land but not the MH needs the value of the land not the MH....that's why they order it that way.

I dont believe Mr Wiley is right nor do I think the Q&A is right. Im with Rex on this issue. The land IS NOT VACANT and cannot be appraised as though it were without an HC. No one has answered what type of sales one would use to determine value of land only on which improvements were constructed. I wish they would.

IF in fact the land and improvements are owned separately then we have a division of property rights and I can understand valuing the land only. If the ownership is the same ... then there is an issue that most wish to ignore because the Q&A says it can be done. I wonder what higher up person got caught with their fingers in the cookie jar in order for this Q&A to be written this way in the first place????

 

[Mr Rex]

Maybe they will post a FAQ that differentiates between a HUD code home and a nuclear reactor or lead smelting plant as improvements that can be ignored as you appraise the underlying land "AS IS" ignoring the improvements without an HC.:icon_idea:

 

[Ken B]

What are the four factors of value?

If anyone cares to answer that question, they are well on the way to estimating the value of land "as is" regardless of whether there are buildings attached to land or if the land is vacant or if the land is the Chernobyl site.

 

[Mr Rex]

So the current uses of the site have no effect on the value "as if vacant"? and don't require a HC? In the case of Chernobyl, popcorn fields, or Wal Mart locations seem remote if you consider the current use(s). Ignoring those thorns, misleading as that might be, would result in drastically different Opinions of Value I'm sure.

 

[PropertyEconomics]

What are the four factors of value?

If anyone cares to answer that question, they are well on the way to estimating the value of land "as is" regardless of whether there are buildings attached to land or if the land is vacant or if the land is the Chernobyl site.

Ken .. the land "as is" in the case of the OP is improved and the question is to appraise it "as if" vacant. They are not the same thing.

 

[DWiley]

No one has answered what type of sales one would use to determine value of land only on which improvements were constructed. I wish they would.

One could guess at the response, but one could accurately answer without knowing the intended use and the other required elements of problem identification. We do not know whether the intent is to opine on the contributory market value of the site, or the market value of the site encumbered by improvements. These would require different analyses.

I wonder what higher up person got caught with their fingers in the cookie jar in order for this Q&A to be written this way in the first place????

Alas, I was really hoping we could get through one USPAP-related thread without inference of some conspiracy or impropriety. Too much to hope for, I guess. Nowhere does ad hominem flourish like it does on this forum.

If the position was taken as the result of someone being "caught with their fingers" where they did not belong, you are going to have to search deep in history to find that. The ASB first printed its position on the underlying land scenario over 10 years ago, and has reaffirmed it several times since.

During my ASB days I addressed this many times to many groups. It was always the real estate appraisers who resisted the answer. The personal property types never had any issue with it because they well understood that appraising one piece of a chess set or one painting from a set did not require an HC. Likewise, the BV types never had any issue with it either. They understood that appraising one store in a large business did not require use of a HC just because one was not appraising the entire business.

I think real estate types fight the concept because we are so accustomed to the property rights we appraise being expressed in documents (deeds, leases, etc.) Our experience with that leads many to conclude that unless rights are recorded in a document then the rights do not exist. I have a deed that proclaims to the public my fee simple ownership of a home. There is no document seperately stating my right to rent the property to someone else, but that right exists (even without such a document) and it can be appraised, even if I never rent the property.

I also have a legal document, known as a title, that expresses my legal ownership of an old car. If I were to part the car out and ask an appraiser to opine on the market value of the fenders, the lights, etc., would that personal property appraiser need a HC because he is not appraising the entire car?

This thread illustrates well then even though the term "subject property" is widely used, it is not universally understood. Perhaps one day the ASB will pull the "Subject Property Project" back off the bookshelf.

I am done. Fire away.

 

[PropertyEconomics]

One could guess at the response, but one could accurately answer without knowing the intended use and the other required elements of problem identification. We do not know whether the intent is to opine on the contributory market value of the site, or the market value of the site encumbered by improvements. These would require different analyses.



Alas, I was really hoping we could get through one USPAP-related thread without inference of some conspiracy or impropriety. Too much to hope for, I guess. Nowhere does ad hominem flourish like it does on this forum.

If the position was taken as the result of someone being "caught with their fingers" where they did not belong, you are going to have to search deep in history to find that. The ASB first printed its position on the underlying land scenario over 10 years ago, and has reaffirmed it several times since.

During my ASB days I addressed this many times to many groups. It was always the real estate appraisers who resisted the answer. The personal property types never had any issue with it because they well understood that appraising one piece of a chess set or one painting from a set did not require an HC. Likewise, the BV types never had any issue with it either. They understood that appraising one store in a large business did not require use of a HC just because one was not appraising the entire business.

I think real estate types fight the concept because we are so accustomed to the property rights we appraise being expressed in documents (deeds, leases, etc.) Our experince with that leads many to conclude that unless rights are recorded in a document then the rights do not exist. I have a deed that proclaims to the public my fee simple ownership of a home. There is no document seperately stating my right to rent the property to someone else, but that right exists (even without such a document) and it can be appraised, even if I never rent the property.

I also have a legal document, known as a title, that expresses my legal ownership of an old car. If I were to part the car out and ask an appraiser to opine on the market value of the fenders, the lights, etc., would that personal property appraiser need a HC because he is not appraising the entire car?

This thread illustrates well then even though the term "subject property" is widely used, it is not universally understood. Perhaps one day the ASB will pull the "Subject Property Project" back off the bookshelf.

I am done. Fire away.

What would constitute a hypothetical condition if it is not for the appraisal of something that is contrary to that which exists? In the OP .. the land is improved, the lender wants the value of the land "as if vacant" .. again how is that not an assignment for something contrary to that which exists?

 

[Carnivore]

What would constitute a hypothetical condition if it is not for the appraisal of something that is contrary to that which exists? In the OP .. the land is improved, the lender wants the value of the land "as if vacant" .. again how is that not an assignment for something contrary to that which exists?

Asked and answered. Go back to the OP and start reading again.

What is being argued is standard one starting at line 502 and ending 524.

Danny is wrong when he says that we rely to much on legal documents. I dont know what he meant by that since that is the only way property rights are expressed.

His use of a personal property, an auto broken down into parts, is mixing apples and oranges. There are no legal expressions of individual car parts. There is only a legal title of a car with or without all its parts. The title can not be broken down into indvidual rights. It exist only to show who owns the personal property!

I am firmly within your camp on this issue. The fatal flaw on the other side is they seem to be ignoring other parts of USPAP, one example; lines 577 to 587. Its plain to me that we all must be careful when we take USPAP out of context.

Heres another part they are ignoring; lines 125 to 129. This is actually huge because it clearly supports my on-going contention that individual licenses should not be directing questions about USPAP to the TAF. All questions about USPAP should be directed only to the state appraisal boards who have jursidiction over you as a licensed appraiser.

Its frustrating to me when the TAF chooses to take a very clear part of USPAP and deliberatly muddy it up with nonsense.

So to answer the original OP; the property can not be appraised AS-IS for your client. Unless, that manufactured home is still titled with your state as a motor vehicle(NC for example) or classifed as personal property. Some states may look upon it as being a fixture. Who knows. Check with your state, dont waste your time asking the TAF.

PE, Heres a good question to think about. Have you ever wondered why the TAF has never included the definition of Fee Simple, Fee Simple Estate or Fee Simple Title?

From the Dictionary of Real Estate Appraisal, AI

fee simple estateAbsolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.

fee simple title
A title that signifies ownership of all the rights in a parcel of real property, subject only to the limitations of the four powers of government.

 

[PropertyEconomics]

I nominate Steven Santora or George Hatch (and maybe both) to serve as the offical Q & A authorities. This nonsense would stop if we had real minds addressing the issues of USPAP.