Fannie Mae and "Multiple Parcels"

[George Hatch]

Then why aren't the parcels separate and distinct from the other????

Your answers didn't do it sorry. Let me fix it for you; YOU see the parcels as separate, the MARKET does not.

One reason is that all sellers are property owners, but not all property owners are sellers. Another reason is that individuals sometimes act out of sync with the group.

Fun fact: close to 100% of the parcels I appraise in the urban areas which have multi-family zoning have existing SFRs or other underimprovements which were occupied as such despite the property being worth more as land value. So yeah, 100% of those sellers were "wrong" (as you put it) up until they sold.


My guess is that you probably toss as an outlier at least one sales transaction in most every appraisal assignment you perform. We all do. That's because we recognize that no one sale makes or breaks.

As for what THE MARKET does, how would you know that in this situation until you've actually done the analysis? Because citing the odd example *definitely* doesn't cut it.



Consider this: if it's even possible for different market segments involving the house+extra to act in different ways and result in different outcomes then that possibility is all the justification it takes to advocate for researching and analyzing those different possibilities prior to committing to the conclusion.

 

[Andrei Fin]

In the case of the Garfield house, it was previously sold in 2016 during a red hot market (did you catch that part, Lee?). The agent at the time actually listed the lot separately at $89k and the house at $313k and stated that the seller would entertain an offer on both. The property sold for $414 to the TYPICAL buyers in these parts (a young family) and they left the second parcel undeveloped until they sold it again in 2018. As the next buyer, I had no plans to develop the parcel either, and there is nothing atypical about my family or our motivation as buyers. And if you drive by the house today, still no development on the second lot. So here is a real world example where the market has spoken three times yet both Lee and George continue to insist that none of us are the typical buyers because their textbook says so.

 

[Lee Lansford]

Then why aren't the parcels separate and distinct from the other????

Your answers didn't do it sorry. Let me fix it for you; YOU see the parcels as separate, the MARKET does not.

Why bo

In the case of the Garfield house, it was previously sold in 2016 during a red hot market (did you catch that part, Lee?). The agent at the time actually listed the lot separately at $89k and the house at $313k and stated that the seller would entertain an offer on both. The property sold for $414 to the TYPICAL buyers in these parts (a young family) and they left the second parcel undeveloped until they sold it again in 2018. As the next buyer, I had no plans to develop the parcel either, and there is nothing atypical about my family or our motivation as buyers. And if you drive by the house today, still no development on the second lot. So here is a real world example where the market has spoken three times yet both Lee and George continue to insist that none of us are the typical buyers because their textbook says so.

Are you ready to admit that you can't respond to the scenario in my post #307 because it is contrary to your single-minded approach?

 

[Terrel L. Shields]

.The buyer for the one is NOT the buyer for the other. The

That has absolutely nothing to do with HBU.

Redirect Notice

 

[George Hatch]

In the case of the Garfield house, it was previously sold in 2016 during a red hot market (did you catch that part, Lee?). The agent at the time actually listed the lot separately at $89k and the house at $313k and stated that the seller would entertain an offer on both. The property sold for $414 to the TYPICAL buyers in these parts (a young family) and they left the second parcel undeveloped until they sold it again in 2018. As the next buyer, I had no plans to develop the parcel either, and there is nothing atypical about my family or our motivation as buyers. And if you drive by the house today, still no development on the second lot. So here is a real world example where the market has spoken three times yet both Lee and George continue to insist that none of us are the typical buyers because their textbook says so.

You know, by my count, a *list price* of $313k + $89k = $402k. That's actually less than the $416k the property sold for.


That is not an example which supports your view that the extra lot is nothing more than lot area to the previous seller. I don't have access to your MLS, but if that broker mentioned it in the MLS listing then that would indicate to me that they were aware of what they were doing WRT HBU. As a matter of fact, the manner of listing and the sale price from your 2016 example lines up perfectly with the example I gave earlier where two of my comparables sold with a 2nd lot and after deducting the retail price off their sale prices they lined up quite closely to my other comparables.

Just sayin'

 

[Lee Lansford]

That has absolutely nothing to do with HBU.

Redirect Notice

I didn't say that it did.

It's a stand-alone comment (in addition to the already arrived conclusion as to the H&BU of each parcel) intended to assist the person to whom I posed the appraisal problem to focus.

 

[Andrei Fin]

Why bo



Are you ready to admit that you can't respond to the scenario in my post #307 because it is contrary to your single-minded approach?

You know, by my count, a *list price* of $313k + $89k = $402k. That's actually less than the $416k the property sold for.


That is not an example which supports your view that the extra lot is nothing more than lot area to the previous seller. I don't have access to your MLS, but if that broker mentioned it in the MLS listing then that would indicate to me that they were aware of what they were doing WRT HBU. As a matter of fact, the manner of listing and the sale price from your 2016 example lines up perfectly with the example I gave earlier where two of my comparables sold with a 2nd lot and after deducting the retail price off their sale prices they lined up quite closely to my other comparables.

Just sayin'

Wrong, the vacant lot listing ended up being cancelled and the MLS shows an SFR sold for $414k with the extra parcel in the comments, once again.

This has nothing to do with HBU, everyone agrees that the HBU of the vacant lot is to build an SFR. The problem is this - nobody ever asked you to appraise the vacant lot.

You've failed to identify the subject property, failed to meet your client's scope of work ("I'm just going to give them two values and let them decide" haha the order would be canceled in three seconds), failed to demonstrate/support your value by not using like comps (A+B are adjoining and marketed at the same time) and therefore grossly overvalued the subject property leading to increased risk for your client.

You've also failed to cite any source that a property must be appraised in its highest and best use, or that HBU is equal to market value. And you've failed to answer the question: in these rather common cases, how can the market be so wrong, so often? Where are all the smart buyers? How many times can you write something off as atypical, uninformed, outliers etc, three sales in a row is not enough for you? Sounds like willful ignorance to me.

On the flip side, you're trying to tell me I violated a couple of USPAP FAQs that don't even apply to this situation. Mmmkay.

 

[Lee Lansford]

Then why aren't the parcels separate and distinct from the other????

Your answers didn't do it sorry. Let me fix it for you; YOU see the parcels as separate, the MARKET does not.

Again...take your time...do your research...and be certain to arrive at the one correct answer to my post #307.

When (if?) you arrive at the one correct answer, you will gain insight as to why it is the the advice in Fannie "multiple parcels" article is such incredibly bad advice to appraisers.

 

[Lee Lansford]

Wrong, the vacant lot listing ended up being cancelled and the MLS shows an SFR sold for $414k with the extra parcel in the comments, once again.

This has nothing to do with HBU, everyone agrees that the HBU of the vacant lot is to build an SFR. The problem is this - nobody ever asked you to appraise the vacant lot.

You've failed to identify the subject property, failed to meet your client's scope of work ("I'm just going to give them two values and let them decide" haha the order would be canceled in three seconds), failed to demonstrate/support your value by not using like comps (A+B are adjoining and marketed at the same time) and therefore grossly overvalued the subject property leading to increased risk for your client.

You've also failed to cite any source that a property must be appraised in its highest and best use, or that HBU is equal to market value. And you've failed to answer the question: in these rather common cases, how can the market be so wrong, so often? Where are all the smart buyers? How many times can you write something off as atypical, uninformed, outliers etc, three sales in a row is not enough for you? Sounds like willful ignorance to me.

On the flip side, you're trying to tell me I violated a couple of USPAP FAQs that don't even apply to this situation. Mmmkay.

Let me be clear: You are clueless.

Not to know the answer (posed in post #307)...well, you should be embarrassed.

And...here you go again: "You also failed to cite any source that a property must be appraised in its highest and best use..." and that "HBU is [integral] to market value". Wake up.

You have no idea whatsoever as to what you are doing. To come into a public forum and admit that you do not understand that H&BU is integral to MV...incredible. Simply incredible.

For the good of the public, I hope that you are using your own name here. For your own good, you should not be using your own name.

 

[Andrei Fin]

If you're saying that about me then you're also saying it about Fannie Mae, why don't you report them to the CFPB or your state board for putting out this newsletter instead of whining about in a forum?