Credit For Boat Slip

[J Grant]

"They", ( the homeowners) own the boat slip. Their property (real estate) does not "own" a boat slip (it is not on the deed, correct)?

Thus, you have a problem. Denis comments of course are excellent. The problem you have is that even though the boat slip is not technically part of the RE, it's availablity to be sold with the property (even if future mortgage won't finance it) lends contributory value to the property, since it is assumed the owners would first offer their house for sale including the boat slip ( and only separate it if the market is not paying for the two together...a new buyer may want to finance the boat slip into the sale but may not be able to, for the very reason you see as it is not part of the real property) . So would a buyer, if they are unable to roll the value of the boat slip in the transaction, pay cash $ above the purchase price? Are buyers of manufactured homes in area cash or finance buyers, heavily leveraged finance such as FHA etc.

Ask them how much they paid for the boat slip, also, if they don't personally use the slip are they allowed to rent it out, if so, how much can they rent it for ( that could be factored into value)

I don't envy you this assignment, an example of how some low $ amount or small house assignments can be more complex than some high $ assignments and one can't know that till already stuck with it.

I might compare its contributory value to an equivalent value of lakefront vs non lakefront , and or go back in time see if any MF houses sold with this boat slip vs none, or the non MF house what did it sell for with boat slip vs similar built houses without the slip.

 

[J Grant]

Try not to let the fact that the buyer is so proud of their boat slip influence you. I know you don't intend to let it influence you, but you mentioned how proud they are twice; sounds like the homeowners were not shy about their belief the boat slip is going to mean so much in value. FHA this type of oddball amenity if accorded much value when it is not actually part of the RE can create a problem if reviewed so be careful.

Something can have value, but not a value we can support in the acceptable appraisal methodology we are limited to.

If it is not part of the RE, would a lender finance it as part of a sale? If not, the value would be outside the RE as any future buyer would have to pay cash for it. The boat slip can have market value as a boat slip, but the MF house property may not necessarily have that same in additional value of the slip if it can't be financed as part of a sale.

If they included a boat instead of a slip with their house would be a similar thing, they might get more $ as a package deal than the house alone but conv and FHA do not finance boats along with a house, so the buyer would have to pay a cash amount for the boat (its value would not be part of the appraisal)

The fact that there is a waiting list and it relates to this specific location makes it a bit different than a boat of course, but one has to ask, how many people are on a wait list for this boat slip who ALSO want to live in a small MF house? The fact that no other MF house sales are found with a boat slip might be a clue.

Do people who own these boat slips tend to live elsewhere and are happy to drive a distance to reach the slip? Do they tend to live in more upscale areas and thus be able to afford to buy the slip? How much does a slip alone sell for..might give you an idea of MF homeowners in area are candidates to buy the slips when they do become available.

 

[Zero]

Denis's analysis is pretty spot-on. It is not part of the principal property that is the subject of the appraisal and can be treated like excess land. Here is what FHA handbook 4000.1 (p. 481-482) says about excess land:


II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Appraiser and Property Requirements for Title II Forward and Reverse Mortgages 3. Acceptable Appraisal Reporting Forms and Protocols Handbook 4000.1 482 Effective Date: 09/14/2015 | Last Revised: 02/12/2016

(B) Required Analysis and Reporting The Appraiser must include the highest and best use analysis in the appraisal report to support the Appraiser’s conclusion of the existence of Excess Land. The Appraiser must include Surplus Land in the valuation. If the subject of an appraisal contains two or more legally conforming platted lots under one legal description and ownership, and the second vacant lot is capable of being divided and/or developed as a separate parcel where such a division will not result in a non-conformity in zoning regulations for the remaining improved lot, the second vacant lot is Excess Land. The value of the second lot must be excluded from the final value conclusion of the appraisal and the Appraiser must provide a value of only the principal site and improvements under a hypothetical condition.

 

[Terrel L. Shields]

It is not a lot. The Corp. of Engineers issues the permits. It is an item that many states consider to be "personal property". I would find out if the state even considers it to be "real property"....and since it is off site, I would suggest you go back to the Direct Endorsement Underwriter and ask if they accept the Boat slip as "real" or included in the value. I suspect NOT even when the assessor may include it on the field card.

 

[redfish]

Terrel-

I remember him saying this but don't recall when and where, do you?

"We can't just drill our way to lower gas prices,...."anybody who tells you that we can ... doesn't know what they're talking about, or just isn't telling you the truth." President Obama

 

[Terrel L. Shields]

Terrel-

I remember him saying this but don't recall when and where, do you?

"We can't just drill our way to lower gas prices,...."anybody who tells you that we can ... doesn't know what they're talking about, or just isn't telling you the truth." President Obama

Campaign 2012; U of Miami I think

 

[J Grant]

I agree with Terrell's take, this is not akin to excess land . It sounds at least so far like personal property that they own, if they try to sell it with the house the availability of the boat slip could throw off peripheral value to the property but one has to be very careful to explain how that would work and why.

I see a similar scenario on luxury end here with property where they own a golf membership and the membership has to be purchased separately. However if the golg memberships are limited and have a wait list, then the fact that it is available to be purchased with the property can throw off peripheral value, but it is not in and of itself part of the real property.

I usually handle it as higher on qualitative end of value in reconciliation rather than making an adjustment for a possible inclusion of something that is not part of the real property.

 

[Mr Rex]

I live on a Corp controlled lake and properties with dock privileges have a substantial value superiority. The dock ownership are typically transferred with the RE and add substantially to the RE value in the $50-100K range for "water front properties" and somewhat less for "water access" lots. Technically the dock ownership is first come first serve etc and can be transferred separately from the RE within certain parameters but most transfer with dock privileges at a substantial premium to those without on water boat storage access. The actual floating dock structures are personal property, but ignoring the value of the available on water boat storage value would be highly misleading. YMMV.

 

[J Grant]

Mr Rex what is the price range of the properties you refer to?

I can see where a personal property dock avail could be popular and worth $, in your example selling it along with the property sounds typical in a number of transactions.

The OP sounds like a low price MF house and he has not found sales of MF houses with the dock amenity...but yes a dock could have a good bit of value even as not part of the real property, a tough problem without similar sales.

 

[Tom Woolford]

I just waded through this from the beginning, but I get the impression that the slip is not attached to the lands conveyed with the property. If so, its not your concern as they could sell it separately from the house / land. If they chose to include it in the sale that's their business, not yours. Not much different than a tractor or portable spa. It has no contributory value to the property under contract.