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Fannie Mae and "Multiple Parcels"

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
That's not a value in use. That is the HBU for those parcels.
Both are the same then...dict of RE says properties have a HBU and a value in use- we use HBU for the MV opinion , is a HBU of the beach strip lot to sell with the dwelling ? Most of them can be severed and sold separately, but almost none of them are, even though an owner might get more $ for it... the people in Palm Beach Island have so much wealth a million more or less means nothing to them, they'd rather preserve the tradition and exclusivity of the beach strips convey with the house rather than selling it to an outsider.

that is one of the flaws in HBU as written - it assumes max productive/proift is the goal of ever owner or buyer and in some cases it is not.
 

George Hatch

Elite Member
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Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
Depending on market conditions, a liquidation value analysis can return the same number as a market value analysis. I've seen it happen that way many times. But that doesn't mean the two concepts mean the same thing.

And no, the definition of MV does not make assumptions about every owner or buyer. It assumes what's typical for the that subset of buyers and sellers who would actually compete for the subject - which in the case of a house+actual extra would (logically) be severely limited to those buyers for house+extra.

You've got to step away from the idea that MV is based on external benchmarks. It isn't. The primary assumptions are relational, not fixed and isolated from the market itself.

HBU compared to what?
"Most probable" compared to what?
"Typical" compared to what?
 
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J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Depending on market conditions, a liquidation value analysis can return the same number as a market value analysis. I've seen it happen that way many times. But that doesn't mean the two concepts mean the same thing.

And no, the definition of MV does not make assumptions about every owner or buyer. It assumes what's typical for the that subset of buyers and sellers who would actually compete for the subject - which in the case of a house+actual extra would (logically) be severely limited to those buyers for house+extra.
Agree with both of the above... in snooty wealth areas selling to the "right" person means a lot to many of the sellers so they'l let a house sit for a year rather than sell to it someone they think might crash the 1% party...in NYC that is what co op boards are for, to screen out new money lol...
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
By the same token, we have timeshare interests being sold out of boilerrooms or direct at the site instead of the MLS. We have property types which are commonly sold at auctions. Shoot, there's nothing really stopping an E-bay type online auction for properties. Regardless of the vagaries of the different markets which do exist or may come to exist in the future the underlying fundamentals of appraising remain the same. It is the various expressions - the applications - of those fundamentals which will continue to evolve.

100 years ago who could ever have guessed that all the buyers and sellers in a town would have the same level of access to all the listings that became common 50 years ago? Who could have guessed that the internet would bring listings to users located on the other side of the country on a searchable basis and for free? Who could have guessed that Calif would basically impose an R2 minimum on every jurisdiction in the state? Who can envision an RE market of consisting of sleeping pods in a dorm that might occur over the next 20 years? Regardless, the underlying fundamentals and the appraisal process itself will still remain. Regardless of whatever changes in labeling or nomenclature, the process will still come down to identifying the relevant expectations of the users, identifying the other elements of the appraial problem, choosing a SOW that will hit all those points and then proceeding to meet those expectations.

THAT is why USPAP istelf doesn't run 10,000 pages to attempt to spell out in detail every possible scenario. THAT is why appraisers are being pushed into thinking in terms of the underlying basics and not getting caught up and blindered in the myopia of the written cookbook recipe mentality. THAT is why Fannie isn't deemed right simply as a result of them being Fannie.
 
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J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
"THAT is why Fannie isn't deemed right simply as a result of them being Fannie.

Agree...however on same token would you say Fannie should not be deemed wrong simply as a result of them being Fannie.?
In either viewpoint, the appraiser is the one responsible for their appraisal.
 
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George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
They're an intended user, and that's plenty relevant all by itself. But it's not EVERYTHING.
 

Zephyr999

Sophomore Member
Joined
Oct 23, 2015
Professional Status
Certified General Appraiser
State
Wisconsin
Wow George H...you sure have patience trying to open the thinking of mature 'grasshoppers' who seem to be twisted up in how one thing begets another... because they've always done it that way.

JGrant with all kindness...way too many posts from one person distorts things from a learning perspective IMHO. Not trying to pick a fight just recognizing the redundancies in this thread alone support that notion. I don't believe you would do the same non-stop '...but my idea is...' in a live classroom setting...just food for thought.
 

Eli

Elite Member
Joined
May 12, 2007
Professional Status
Certified General Appraiser
State
Tennessee
I was in a small bank before they even started selling to the secondary market. So, take care of your lender. You know the rules. The lender wants to sell the loan if FNMA is the buyer. The form won't cover it on it's own. Am I being obtuse? lol
 

Eli

Elite Member
Joined
May 12, 2007
Professional Status
Certified General Appraiser
State
Tennessee
Things have changed since the early 1980's. Have to know your client, your intended use and users and the definition of value and SOW. Your certifying to it in your signature.

Think about this. Exposure time estimate is likely only required on "market value" definition. H&B use opinion as well.

The "use value" definition is a curve ball. They may provide that definition. I don't know. They have "market value" definition in the form. Maybe the the new forms will provide "use value" definition.

As an appraiser, you are required to provide the definition of value you are working with. Even if you give a verbal report. It has to be in the work file. Look at the last line you certify to in the opinion of value on the 1004. Right where you reconcile on page 2. READ it closely what it says.

Very bottom of page 2. Read it closely. That's where your screwed in doing "use value" on that form. You could do all kind of disclaimers in the addenda on assignment conditions or whatever caveats. I don't know if it would work or not. "use value" or "value in use" are not the same as "market value". The most important disclaimers are where the opinion of value is stated (bottom of page 2 on 1004)
 
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