Fannie Mae and "Multiple Parcels"

[Michigan CG]

I see that everyone is in the Christmas mood today.

 

[J Grant]

I see that everyone is in the Christmas mood today.

A new effective threat for parents- If kids misbehave, tell them Santa will bring them , as their only gift, a copy of USPAP - and THEY HAVE TO READ IT !!

 

[glenn walker]

The problem is when residential appraisers check the NO BOX they rarely can define what a higher or better use is because they do not even know themselves . They get twisted into hypothetical's and what ifs and lead themselves and their frustrated client down a yellow brick road. On commercial a H & B use is often much less complicated because it doesn't take a rocket scientist to know when a property is under utilized.

In residential appraisers are often as goofy as some owners. The classic and typical home owners dream is that someday he/she is going to tear that bad-boy down and build a bigger and better house, then the goofy appraiser shows up and between Frick & Frack the two of them all start believing the dream. Unfortunately neither the buyer-seller, Realtor or residential appraiser ever read the title report and have no idea what building department is going to require. The Big dreamers after spending thousands of dollars drawing up plans, surveys, soil reports suddenly find out, they need a neighbors parcel to use for additional set backs and or easements and the neighbor tells them to go screw themselves. They cannot force the other owner to sell or give them an-easement because the Subject is not land locked they just never realized they needed more land to develop the existing or adjacent lot. This is why we have so many small vacant parcels that will never be developed and will continue the existing use for many years.

The truth is 75% of all residential appraisers should not even be allowed to opine on higher and better uses because they were not trained and have no experience doing even a minor feasibility test and State Boards should require the CR to either be a licensed contractor or to take additional advanced course work in both H & B use analyses and the cost approach. If not then State Boards should require lenders to obtain a second appraisal completed by a CG to verify the property really does have a higher and better use. If the second report completed by the CG disagrees with the residential appraisers analysis, the original appraiser should be required to "revise" his report uncheck the NO BOX and be billed by the lender for costing either a borrower or owner additional fees and delays. NO BETTER yet the lenders engagement letter should clearly state that when A CR believes there is a higher and better use he/she is to immediately stop and withdraw from the assignment. The only boxes the CR should be allowed to check should be Legal-Legal Non-conforming- H & B Use YES or an-additional BOX - Saying engage CG to complete report and H & B use analyses : ) LOL

 

[alebrewer]

I see that everyone is in the Christmas mood today.

Some folks elicit the best in others...

 

[Lee Lansford]

The HBU qesion on page ne is for the entire property that is the subject of appraisal, ( subject is a house AND adjacent lot ). You still have not answered the question for it.

We've discussed the HBU issue of vacant parcel for pages now. That is not the question I asked

I asked since you indicate you would mark NO on page one, what is the other use then ?

Uuuhhhhh ....the answer to your question is in my post that you quote

The HBU qesion on page ne is for the entire property that is the subject of appraisal, ( subject is a house AND adjacent lot ). You still have not answered the question for it.

We've discussed the HBU issue of vacant parcel for pages now. That is not the question I asked

I asked since you indicate you would mark NO on page one, what is the other use then ?

My post #68 and which is a part of the question that you pose once again.

 

[George Hatch]

As far as what's right and wrong I'm wondering if maybe that's not the optimum way of looking at it. Maybe it comes down to the "better" solution being a subset of what the user has deemed to be "acceptable".

In my view, an appraiser can never go wrong by providing the same solution an expert would provide.

 

[Lee Lansford]

You still have not answered, what would be YOUR "proper" way of appraising this? I stated how I would approach it in the other thread.

I take it that you are not familiar with the FAQs that accompany the USPAP?

Specifically, #176 VALUE IN USE FROM FEDERALLY REGULATED LENDER.

Also, #211 APPRAISING TWO LOTS AS ONE.

As to #211, I've had conversation with the member who was primary--understanding that nothing comes from the ASB lacking many eyes on it--on that little nugget. Give it a read and take it to heart. If you properly digest it, just like the hokey-pokey it will turn you around . Seriously.

 

[George Hatch]

The other observation I would offer here is that the most common type of technical questions we get on this forum involve HBU analysis. This would not be the case if our profession was doing an adequate job in training and promulgating this mode of analysis among all the appraisers who run into such questions in their day job - which AFAICT is all appraisers.

We clearly have some room for improvement in terms of the training.

 

[J Grant]

The problem is when residential appraisers check the NO BOX they rarely can define what a higher or better use is because they do not even know themselves . They get twisted into hypothetical's and what ifs and lead themselves and their frustrated client down a yellow brick road. On commercial a H & B use is often much less complicated because it doesn't take a rocket scientist to know when a property is under utilized.

In residential appraisers are often as goofy as some owners. The classic and typical home owners dream is that someday he/she is going to tear that bad-boy down and build a bigger and better house, then the goofy appraiser shows up and between Frick & Frack the two of them all start believing the dream. Unfortunately neither the buyer-seller, Realtor or residential appraiser ever read the title report and have no idea what building department is going to require. The Big dreamers after spending thousands of dollars drawing up plans, surveys, soil reports suddenly find out, they need a neighbors parcel to use for additional set backs and or easements and the neighbor tells them to go screw themselves. They cannot force the other owner to sell or give them an-easement because the Subject is not land locked they just never realized they needed more land to develop the existing or adjacent lot. This is why we have so many small vacant parcels that will never be developed and will continue the existing use for many years.

The truth is 75% of all residential appraisers should not even be allowed to opine on higher and better uses because they were not trained and have no experience doing even a minor feasibility test and State Boards should require the CR to either be a licensed contractor or to take additional advanced course work in both H & B use analyses and the cost approach. If not then State Boards should require lenders to obtain a second appraisal completed by a CG to verify the property really does have a higher and better use. If the second report completed by the CG disagrees with the residential appraisers analysis, the original appraiser should be required to "revise" his report uncheck the NO BOX and be billed by the lender for costing either a borrower or owner additional fees and delays. NO BETTER yet the lenders engagement letter should clearly state that when A CR believes there is a higher and better use he/she is to immediately stop and withdraw from the assignment. The only boxes the CR should be allowed to check should be Legal-Legal Non-conforming- H & B Use YES or an-additional BOX - Saying engage CG to complete report and H & B use analyses : ) LOL

We are allowed our opinions but imo this is nonsense. What amount of problems arise on res loans/appraisals due to incorrect HBU issues? .. I have seen some garbage res appraisals by cert generals BTW.

Some on this thread fail to grasp that the fannie example is not two lots combined into one. It is a house and an adjacent lot conveyed together as a property to be valued, but the lots are never combined into one larger parcel. The adjacent separate lot can be severed at any time from the mortgage with a payoff and sold.

 

[Carnivore]

As to my "perturbance" , you may want to conduct some additional research to gain understanding on this issue.

Suggest: Open your copy of the current USPAP.

Accompanying USPAP are the "USPAP FAQs".

Turn to #176 VALUE IN USE REQUEST FROM FEDERALLY REGULATED LENDER,

See #211 APPRAISING TWO LOTS AS ONE

BTW, if it matters, yes, I have had conversation with the person who was primarily (understanding that these things don't pop-up based upon one person's whims) responsible for the writing of #211.

Or, are these more "Appraisal Edicts"?

Reading over these two FAQ's brings up an issue that AMC Phone Monkey and Big Box Lender is not going to like. This ain't no chump change fee and 24 hour turn and burn assignment.

So there is opportunity here for appraisers who are willing to do this type of work Bigger Money. Once the Vinyl Village on Slab Appraiser realizes they might get sideways with their Appraisal Board ...well they will stop accepting this work. Cause and Effect Fee will go up.

This could be why they gave a meh! response like they did. Don't worry be happy!