Condition: Arms-length Commercial activities

[Tom4value]

No, because we are not appraising the contract, we are appraising the property. I see what exists in their contract and report it. They can do whatever they like in their Sales contract. The point of us reviewing it is to see if the terms are unusual/might affect price and the names or other in the contract might indicate whether or not it is an arms length sale.

We are supposed to analyze the contract for just what you said in your last sentence. It goes beyond just “reporting” what is in the contract, which is what any reader of it already knows.

 

[Terrel L. Shields]

Some people are born with a compelling love of horses,

Until they get stomped, thrown, bit, run over and kicked. One horse trainer I know lost a toe to being stepped on, and another owner is nursing a broken wrist as we write. She just got over breaking the other wrist when her horse knocked her down just being a friendly horse.

 

[ZZGAMAZZ]

One thing I run into on the regular is when the real property and the business sell at the same time they often allocate more to the realty and less to the business for taxation reasons.

I recently finished four appraisals of SFR's being used to house indigent adults. Client says the appraisals for real property assets were completed satisfactorily, but the sale of the business is being held up because the seller who over-stated the income also had debits/liens against the properties. Do AG appraisers provide appraisals that analyze P&L ???

 

[Terrel L. Shields]

Do AG appraisers provide appraisals that analyze P&L ?

You can in a business loan but normally the banks only want the value of the real estate and not the TAB (total assets of Business)

 

[George Hatch]

I recently finished four appraisals of SFR's being used to house indigent adults. Client says the appraisals for real property assets were completed satisfactorily, but the sale of the business is being held up because the seller who over-stated the income also had debits/liens against the properties. Do AG appraisers provide appraisals that analyze P&L ???

I never do it for the smaller individual group home properties and I don't appraise the investment grade properties in that market segment. In the event of a foreclosure the lender cannot assume they will get anything back but the real property. They won't get the license, the FF&E or the business interests - those will usually be long gone before the foreclosure.