Can you value as vacant.if its improved?

[CANative]

The use of the real estate existing is a residential homesite improved with a HUD code manufactured home. The subject of the appraisal is the land component of the real estate.

There. The hypothetical condition has been disclosed. USPAP does not say that the label "hypothetical condition" must be used. Only that the hypothetical condition has been disclosed.

 

[Webbed Feet]

The use of the real estate existing is a residential homesite improved with a HUD code manufactured home. The subject of the appraisal is the land component of the real estate.

There. The hypothetical condition has been disclosed. USPAP does not say that the label "hypothetical condition" must be used. Only that the hypothetical condition has been disclosed.

Maybe I recall USPAP on this incorrectly, but I think we have to also explain the affects on the analyses. Whatever that means..

 

[DWiley]

Maybe I recall USPAP on this incorrectly, but I think we have to also explain the affects on the analyses. Whatever that means..

Actually, that was changed a few years ago. Now one only has to warn that using a HC could affect the analysis.

 

[Lee Lansford]

Well, this discussion has certainly engendered more than a bit of the old "back and forth".

IF the question at hand is whether the land underlying improvements can be valued by its lonesome, the answer is "yes'. I think everyone agrees on this.

The second question is whether a HC ("the improvements don't exist") has to be employed when appraising the land underlying the improvements?

The answer to this second question is, again, "no" (and, obviously, a point of much disagreement here).

There is no need to re-open each and every prior argument for one position or the other. I think that Danny--in one of his much earlier posts in this string--offered how an appraiser might go about completing such an assignment in a manner that is consistent with the USPAP.

At the very least, those with a different viewpoint have to acknowledge that Danny's position is not contrary to the USPAP and subsequent opinions of the ASB on this matter.

 

[The Warrior Monk]

The second question is whether a HC ("the improvements don't exist") has to be employed when appraising the land underlying the improvements?

The answer to this second question is, again, "no" (and, obviously, a point of much disagreement here).

It's a point of contention simply because the fee simple interest in the land can't be tranferred without removing the dwelling; i.e., changing the state of the property to something other than what exists. It can be leased, or sold by encumbering the fee simple rights (e.g., right of access to the structure), but neither of these are a fee simple interest in the land. Once the property is improved, it is not longer vacant.

Determining the contributory value of the land could be determined without the use of the hypothetical condition, but this is not the same as determining the fee simple rights of the underlying land.

 

[CANative]

Determining the contributory value of the land

Uh oh.... ....

 

[Mr Rex]

Flash back to my Chernobyl improvement, what if the aforementioned HUD code Double wide was a former meth lab, and they had been using the "land" as a waste repository for the spoils of the lab? HC or no?

 

[Webbed Feet]

Actually, that was changed a few years ago. Now one only has to warn that using a HC could affect the analysis.

That's a good thing!

 

[Webbed Feet]

Well, this discussion has certainly engendered more than a bit of the old "back and forth".

IF the question at hand is whether the land underlying improvements can be valued by its lonesome, the answer is "yes'. I think everyone agrees on this.

The second question is whether a HC ("the improvements don't exist") has to be employed when appraising the land underlying the improvements?

The answer to this second question is, again, "no" (and, obviously, a point of much disagreement here).

Sorry, but I will remain in the camp that the correct answer to your last one above is, and always will be, "Maybe." Not "Yes," not "No," but only "Maybe." It takes looking at the specific case and it's particulars to decide the correct answer. And that is my beef with the FAQ that has come out about this from the ASB.

There is no need to re-open each and every prior argument for one position or the other. I think that Danny--in one of his much earlier posts in this string--offered how an appraiser might go about completing such an assignment in a manner that is consistent with the USPAP.

At the very least, those with a different viewpoint have to acknowledge that Danny's position is not contrary to the USPAP and subsequent opinions of the ASB on this matter.

He needs my, and others, acknowledgment that his position is "not contrary" to a poorly defined FAQ out of the ASB, that we find might be misleading, in that it grossly leaves out that it should not be applied 100% of the time against all possible scenarios? Ok, I can acknowledge that. Acknowledged!

Now all we need is his acknowledgement that the March 2008 FAQ is inadequately presented in that it fails to warn it's readers that the real correct answer is only "Maybe," or "It depends."

 

[DWiley]

Now all we need is his acknowledgement that the March 2008 FAQ is inadequately presented in that it fails to warn it's readers that the real correct answer is only "Maybe," or "It depends."

On the slim chance that anyone really "needs" such a thing, refer to to post 147, and find the following

To be perfectly honest, I think the answer depends entirely on the exact circumstances. The Q&A provides an answer that would be appropriate in some circumstances and not in others. The real trick to a good Q&A is having the right Q, and the Q in this case lacks specificity.