Fannie Mae's New Highest and Best Use 2020

[George Hatch]

BTW, a client or user telling the appraiser to make the assumption that the extra is just yard area is no different from them telling the appraiser to ignore easements or ignore deferred maint or ignore external conditions on the basis of lender or appraiser expediency.

A lie is still a lie even if your user told you it's okay for you to tell it. Whether by commission or omission matters not.

 

[Zoe]

The way I addressed it in the reports I did was along lines of :

" The subject consists of a site and house improvement , 32 Cherry St, together with an adjacent vacant lot, 31 Cherry St. The vacant lot is excess land and buildable. It can have its own HBU as a buildable lot. However, demand at present time seems low for purchasing the lot for that purpose, it has been vacant for years and no indication of offers to buy it per RE agent. The vacant lot acts as a contributory value to the whole and has an interim use of providing additional yard area and green /privacy or to retain for investment purpose "

The HBU checkbox on page one checked YES as improved because the improvement contributed more value than tearing down would have . If it had been reverse, the improvement contributed such a low value that tearing it down for vacant site and lot , then the answer on page one would have been NO.

Read George's last post. You can't assume it. H&B use analysis just doesn't allow it on MV opinion. You can do hypothetical if necessary and disclose in assignment conditions.

 

[J Grant]

Read George's last post. You can't assume it. H&B use analysis just doesn't allow it on MV opinion. You can do hypothetical if necessary and disclose in assignment conditions.

Can you stop referencing me in this kind of gibberish, your post makes no sense whether related to what George wrote or what I wrote. BTW I would I agree with G Hatches' last two posts , and I have advised much the same in my prior posts on this topic.

I did have to repeat , since the dense fail to understand : 1) despite doing a HBU analysis of the excess lot and despite doing any individual component value estimates , the HBU as asked on the URAR is as improved yes or no for the package sale being appraised, and the MV opinion is for the package sale. (package sale of the improvement on its site together with the excess lot )

In addition, a HC can not be added to a URAR assignment. (unless the HC is marked subject to )

 

[Zoe]

Stop mentioning me please in your gibberish, your post makes no sense whether related to what George wrote nor what I have been posting in this thread. BTW I would I agree with G Hatches' last two posts , and I have advised much the same in mine.

In addition, a HC can not be made on a URAR assignment. (unless the HC is marked subject to )

Okay, when you are assuming two lots are one, which you have demonstrated in many posts for mortgage purposes???????

 

[Zoe]

That can be done with hypothetical condition. Remember definition of MV.

 

[Mark K]

A lot of appraisers will have no problem following their master's orders... 'just check the "yes" box and call it value in use and add in contributing value'.

These same appraisers are the ones that have no problem calling a property interest 'fee simple' without using a HC when its encumbered with a lease.

If appraisers are going to act like mindless drones, they shouldn't be surprised when they're replaced by drones.

 

[J Grant]

Okay, when you are assuming two lots are one, which you have demonstrated in many posts for mortgage purposes???????

You seem do not understand anything I have posted, since I NEVER assumed the two lots as one !!

Where did I actually say that??? , please go find it in a post I wrote and provide the post # or link so we all can see it - (since I never said that you won't find it, but busy work to do )

My saying the MV opinion asked for is for the package property is NOT one and the same thing as "assuming the two lots as one"

 

[Zoe]

You seem do not understand anything I have posted, since I NEVER assumed the two lots as one !!

Where did I actually say that??? , please go find it in a post I wrote and provide the post # or link so we all can see it - (since I never said that you won't find it, but busy work to do )

My saying the MV opinion asked for is for the package property is NOT one and the same thing as "assuming the two lots as one"

You just nailed it. LOL

 

[J Grant]

A lot of appraisers will have no problem following their master's orders... 'just check the "yes" box and call it value in use and add in contributing value'.

These same appraisers are the ones that have no problem calling a property interest 'fee simple' without using a HC when its encumbered with a lease.

If appraisers are going to act like mindless drones, they shouldn't be surprised when they're replaced by drones.

Putting aside your drone comparison...What does "it" mean to you, in the above ??

I am not agreeing nor disagreeing with the Fannie advice, however, their advice regarding value in use applies to the vacant lot ONLY (as long as it is encumbered with mortgage ) Fannis is are NOT saying the package sale is now a value in use and not MV, as you seem to suggest checking the "yes" box makes it. .

How the excess lot is handled is a component of the assignment, it is not the entire assignment.

 

[J Grant]

FWIW, I think Fannie's latest advice or guideline or whatever they call it is a mess.
A mess because they lumped HBU in with being by one blanket mortgage. A mortgage is a financing tool, -

I'd assume fannie started in with their one mortgage encumbering both to calm appraisers who were fretting OMG will I be liable for the value if they sell the lot. No, they can not sell the lot off solo as long as it is encumbered by one mortgage. Okay, question answered, Fannie could have stopped . Instead, they went on to tell appraisers that the excess lot now has a value in use as its HBU if encumbered by the same mortgage (which is where they overstepped bounds and tied HBU in to a mortgage ). Which still does not excuse that some appraisers make an illogical jump to now the HBU question page one is is a value in use instead of MV . These same appraisers seem to fail to understand the HBU question on page one is for the package sale - the answer can be yes or no, but at least understand the question..

(Imo, an interim value is more appropriate for the excess lot when sold together with the house. ) Regardless of that, the important point is:,

The two properties being sold TOGETHER is what affects the MV of the package, whether bought for cash or with a mortgage. However, the fact that buyers can now finance both a vacant/excess lot alone with a house does add to marketability and appeal to these offerings.
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