Fannie Mae and "Multiple Parcels"

[J Grant]

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[George Hatch]

What if the value in use is greater than the market value? Second parcel has a stream running through it that provides the main property access to world class trout fishing and an excellent view amenity, but terrain is quite rocky making it difficult to clear a home site. Or second parcel is marginal but comes with water rights that allow the first parcel to greatly increase their ag productivity.

We've gone over this. The MV is based on whichever use produces the highest value.

There are 4 tests to HBU. The 1004 may imply otherwise, but zoning is only one of the relevant tests. The consideration of the stream you're talking about falls under another. Do you know which one?

 

[Andrei Fin]

We've gone over this. The MV is based on whichever use produces the highest value.

The MV talks about the typical buyer. The value in use is only to one buyer, the owner of the subject property. The highest and best use is the most profitable use. So...

 

[George Hatch]

The MV talks about the typical buyer. The value in use is only to one buyer, the owner of the subject property. The highest and best use is the most profitable use. So...

Fannie is required (by their regulator) to have appraisals that include the MV. Every reference to the value conclusion in their own form refers to the definition of MV which is hardwired into the form itself. Sux to be them.

A property owner can tell me that the value of the property to them is priceless. I nod politely and then proceed to completely disregard their opinion because nobody cares what they think. If what they thought mattered to our users then they wouldn't even bother getting an appraisal.

 

[J Grant]

We've gone over this. The MV is based on whichever use produces the highest value.

.. HBU is the highest per the measurement of max profit or max productive...MV is the appraisal opinion of the most probable price per the MV definition. used

MV got intertwined with HBU in the thread - HBU as we know is early step in appraisal, with the MV opinion usually the last step ..
I think what got overlooked in the trhead is a property has a HBU and a value in use and the value in use can impact the MV ( demand and what buyers pay for the value in use amenity/contribution)

 

[J Grant]

Fannie is required (by their regulator) to have appraisals that include the MV.

There is a MV opinion in these appraisals - and it includes the additional parcel.

 

[J Grant]

I've appraised a number of homes on Palm Beach Island ( post 721 example ) which have a private beach strip across Ocean Blvd - the beach strip is not build-able for a dwelling, but has a value in use ( cabana , private beach area) and the value in use enjoyment amenity raises the market value /price of the house in a sale.

 

[George Hatch]

There is a MV opinion in these appraisals - and it includes the additional parcel.

Which can (and sometimes will) be unreasonable if appraisers skip the HBU analysis on the 2nd parcel or the comparison of 2-parcel assemblages to single parcels with large lot sizes.

That's a fact and you know it.

 

[George Hatch]

I've appraised a number of homes on Palm Beach Island ( post 721 example ) which have a private beach strip across Ocean Blvd - the beach strip is not build-able for a dwelling, but has a value in use ( cabana , private beach area) and the value in use enjoyment amenity raises the market value /price of the house in a sale.

From your description that's not a value in use as such. That is the HBU for those parcels.

Probable most properties in the developed areas are "used by their owners" in a manner consistent with their HBU. The two use conclusions are neither mutually inclusive nor mutually exclusive. Right?

 

[J Grant]

Which can (and sometimes will) be unreasonable if appraisers skip the HBU analysis on the 2nd parcel or the comparison of 2-parcel assemblages to single parcels with large lot sizes.

That's a fact and you know it.

Nobody, including me, ever told appraisers to skip the HBU analysis of the 2nd parcel - so why is that a thing ? Ditto for the comparison of 2 parcel assemblages to single parcels with large lot sizes.
I think everyone agrees it is a complex assignment needing a lot of analysis.