Dock included in value?

[CANative]

With regard to a dock and actually ownership I have occasionally inserted CYA language with EAs referencing/requring a riparian rights survey. If the loan goes belly up, then they can sue the surveyor or the person who made a decision not to order one.

What do you know about the water other than lounging on the deck at Mauritius Island? Have you been around the horn?

Didn't make it around the horn but I do have a Blue Nose card. And the deck at the Royal Navy Officers Club on Mauritius is something to write home about.

I'm also a a member of the order of shellback and golden shellback.

16 sales and 1 pending sale in the Yacht Club between Jan 2013 and today. One REO of a waterfront which sold at the top of the non-waterfront sales prices. Looks like the cul-de-sac waterfronts sell for a little less than the ones on the open channel. About $100k-$150k difference between waterfront and non-waterfront. Those with docks in the lagoon are described by the agents as "deeded" dock while the ones with "their own dock" don't mention deeded dock. But I suspect they are. Some properties have shared docks but that doesn't seem to make a difference as one of these was the highest sale price.

 

[huntercharlie]

Didn't make it around the horn but I do have a Blue Nose card. And the deck at the Royal Navy Officers Club on Mauritius is something to write home about.



16 sales and 1 pending sale in the Yacht Club between Jan 2013 and today. One REO of a waterfront which sold at the top of the non-waterfront sales prices. Looks like the cul-de-sac waterfronts sell for a little less than the ones on the open channel. About $100k-$150k difference between waterfront and non-waterfront. Those with docks in the lagoon are described by the agents as "deeded" dock while the ones with "their own dock" don't mention deeded dock. But I suspect they are. Some properties have shared docks but that doesn't seem to make a difference as one of these was the highest sale price.

Yes, and probably at the upper end under current market conditions for water. Shared dock (two maximum) versus private, not touching that one.

 

[Doug DeMars]

Treatment of Personal Property

Lenders are reminded that personal property, including (but not limited to) furniture, vehicles,
boats, floating boat docks, and art work, may not be included as additional security for any
mortgage on a one-unit property unless otherwise specified by Fannie Mae. Personal property
is permitted as part of the security for a loan on a two- to four-unit property to the extent it is
pledged by the 1-4 Family Rider (Form 3170). Whether an item is real or personal property is
generally determined by the law of the jurisdiction where the property is located. A professional
appraiser who has the knowledge, experience, and geographical competence to complete the
appraisal assignment must also possess the expertise to identify personal property items in the
appraisal.

I regularly work 2 sub-markets that have boat docks (Discovery Bay & Bethel Island). It is clearly the "right" (w/in the bundle) of water access that effects market value of significance.

I would however add that the "quasi" personal property nature of the docks are more real-estate than not. Unless a contract excluded them in a sale (which I've never seen), these items can add significant value to the primary deeded parcel. As can be imagined, these "floating" docks range from tear-down eye-sores to impressive configurations with hydro-hoists, canopies, multiple slips, water-slides and extensive decking.

IMO, a selling party would likely be found at the very short end of the stick if they tried to remove this property before the conveyance as if it were being treated as an heirloom chandelier in the foyer of a custom home. You better have that in writing...because customary practice is to have these features treated as real estate that runs with the property.

 

[Terrel L. Shields]

because customary practice is to have these features treated as real estate that runs with the property.

Clear to me is that this varies by state. Oklahoma certainly treats them as "personal property" and on Corp of Engineer lakes in Arkansas that I have some knowledge of, my folks were not allowed to place a dock in front of their own house but could get a permit for a small cove nearby...It this case you own the land to the Corp border and in theory no one has "lake shore" property. The Corp owned just above the flood pool level. Plus, our assessor creates a separate tax card on many of them. This treats them as "real" but not as part of the lot. Bill of Sale...no deed.

 

[Evincere]

That's been my experience as well.

While some don't bother because they are not detailed oriented Realtors I've seen MLS brochures that state the floating dock is not part of the sale.

And just because they are advertised in the brochure as a selling point these things cannot be taken for granted to be part of the property transference as they may be negotiated later during the contract phase.

 

[timd354]

I regularly work 2 sub-markets that have boat docks (Discovery Bay & Bethel Island). It is clearly the "right" (w/in the bundle) of water access that effects market value of significance.

I would however add that the "quasi" personal property nature of the docks are more real-estate than not. Unless a contract excluded them in a sale (which I've never seen), these items can add significant value to the primary deeded parcel. As can be imagined, these "floating" docks range from tear-down eye-sores to impressive configurations with hydro-hoists, canopies, multiple slips, water-slides and extensive decking.

IMO, a selling party would likely be found at the very short end of the stick if they tried to remove this property before the conveyance as if it were being treated as an heirloom chandelier in the foyer of a custom home. You better have that in writing...because customary practice is to have these features treated as real estate that runs with the property.

While the floating boat dock may add a lot of value to the property, the problem from a lender or Fannie/Freddie's perspective is that if they are not part of the real property, then they do not secure the mortgage and the floating boat docks can simply be sold off and taken away....I used to work at Freddie and their numerous instances where borrowers who defaulted on their mortgages simply hauled away very valuable floating boat docks when they vacated the property and there was not a thing that Freddie could to the borrower over this issue since Freddie did not have a valid security interest in the dock...they did however force the lenders to repurchase the mortgages in numerous cases due to this issue.

 

[J Grant]

What TMD said.

Appraisers have to be careful in differentiating what market value returns and what is actually included as real property such as deeded with the property.

The two don't always match, the market can return value for the value in use of having dock access that buyer anticipate and will pay for, however, if the dock itself is not deeded and can be removed/sold separately, that has to be made clear to the client . They can choose or not choose to lend on a property with contributory value of a feature that can be removed at a future date, but they should be made aware that is the reality.

 

[residentialguy]

And then you have the HOA and the sale includes a fixed dock which can be given back to the HOA.

 

[RSW]

We have a few developments here in the Knoxville area where some of the owners or buyers of lots have a right to purchase a dock on the water. That right can be sold to someone else and does not remain with the lot.

 

[Doug DeMars]

While the floating boat dock may add a lot of value to the property, the problem from a lender or Fannie/Freddie's perspective is that if they are not part of the real property, then they do not secure the mortgage and the floating boat docks can simply be sold off and taken away....I used to work at Freddie and their numerous instances where borrowers who defaulted on their mortgages simply hauled away very valuable floating boat docks when they vacated the property and there was not a thing that Freddie could to the borrower over this issue since Freddie did not have a valid security interest in the dock...they did however force the lenders to repurchase the mortgages in numerous cases due to this issue.

...just like when a disgruntled borrower decides to remove the AC unit, furnace, all the kitchen appliances and light fixtures...

:icon_mrgreen: