FHA And Excess Land Hypothetical

[Michigan CG]

I would NOT consider this excess or surplus land and would simply appraise it as one parcel.

Given Highest and Best Use best practices you would have to identify it as one or the other.

 

[Michigan CG]

His supervisor could have steered him away from wrong turns but has not. Or maybe the supervisor saw it at a glance and never anticipated where the OP would go with it. We don't know.

It appears that the OP has a better understanding of Highest and Best Use than many people who somehow have a license. Just add this experience on to his knowledge.

 

[sunsetvalley]

Given Highest and Best Use best practices you would have to identify it as one or the other.

Glenn,

This is what caused the problem. If I appraise it as one parcel, then with the zoning, the planned unit CC&Rs and the surrounding uses, the highest & best use is not its current use. Its current use is 2 autonomous parcels, which is the use that conforms to the zoning, neighborhood and planned development standards. If I appraise it as 2 autonomous parcels with an encroachment it is the highest & best use. But causes problems with FHA.

I'm sorry if some of you think I'm an FHA God trying to cause problems. I really just wanted to get some insight and help. I will not be asking here again.

 

[J Grant]

Glenn,

This is what caused the problem. If I appraise it as one parcel, then with the zoning, the planned unit CC&Rs and the surrounding uses, the highest & best use is not its current use. Its current use is 2 autonomous parcels, which is the use that conforms to the zoning, neighborhood and planned development standards. If I appraise it as 2 autonomous parcels with an encroachment it is the highest & best use. But causes problems with FHA.

I'm sorry if some of you think I'm an FHA God trying to cause problems. I really just wanted to get some insight and help. I will not be asking here again.

One poster made a snide comment about FHA God, but that's part of this board ( we all are stuck with that aspect - the price of coming here. Overall you were treated very well and many people devoted time and attention trying to help you. Its troubling after all these posts it seems not to have sunk in ( the below ))

Excess Land refers to land that is not needed to serve or support the existing improvement. You fail to understand that because the second lot is needed to serve and support the encroachment of the porch ( the improvement) it can not be excess land.

 

[J Grant]

It appears that the OP has a better understanding of Highest and Best Use than many people who somehow have a license. Just add this experience on to his knowledge.

? Per his latest post it seems none of the advice anyone gave him sunk in. Most appraisers know HBU and figuring out excess vs surplus land, its a fundamental part of coursework to get licensed.

 

[bnmappraisal]

My boss said he'd finish this part but encouraged me to try it on my own. What is my hypothetical condition? That the transaction does not include the 2nd lot?

I like his mentality on this. You don't learn if someone just gives you the answer
(Edit to add: but it sounds like he's there to also ";catch you if you fall" Sounds like a decent supervisor/mentor)

 

[sunsetvalley]

One poster made a snide comment about FHA God, but that's part of this board ( we all are stuck with that aspect - the price of coming here. Overall you were treated very well and many people devoted time and attention trying to help you. Its troubling after all these posts it seems not to have sunk in ( the below ))

Excess Land refers to land that is not needed to serve or support the existing improvement. You fail to understand that because the second lot is needed to serve and support the encroachment of the porch ( the improvement) it can not be excess land.

My supervisor's argument, the county's argument and the HOA's argument is that it is not needed. I have 2 separate parcels, 2 separate tax ID accounts, 2 separate LEGAL descriptions and 1 porch that may or may not encroach because we are not sure where the survey lot line is. There's MUCH more complication to this that involves lawsuits and a bunch of other things. The way it is right now is a problem because of the encroachment. And we are talking about 1-2 feet on a corner. We walked every inch of the lot. It's buildable. Even if they adjust the line the 2 feet to include the porch, then the lot would be buildable. It's a separate lot. That's my problem. The lot next door was just partitioned off a bigger lot. I'm not talking about a big lot and it needing to be divided and having excess land or surplus land. I have TWO TAX lots, that have been two tax lots since the 1950s when they developed. The owner has been arguing this with the county for the last 6 months because they are upset the HOA is making them pay 2 fees and they have to pay taxes on a fully assessed tax lot. I don't care to be ruining a deal...I care to get this right because the potential for someone to get sued in this is high. This is going FHA, buyers are putting 1% down and it's priced as if there is not a 2nd lot. It's priced almost $70K below the other houses in the development with 9000sf less land...

I just want to get this right.

I know the snarkiness on this forum, I've read it for years. But sometimes it's hard to handle. I've spent HOURS on this and I'm not getting paid anymore for it than a basic cookie cutter. I've read FHA guidelines, Appraiser blogs, forums, talked with different appraisers and have gone over this in my head. I just want to get it right...

 

[sunsetvalley]

I like his mentality on this. You don't learn if someone just gives you the answer
(Edit to add: but it sounds like he's there to also ";catch you if you fall" Sounds like a decent supervisor/mentor)

He's a decent mentor. I've been learning from him for the past 25 years...just recently decided to actually be an appraiser...and I'm quite biased about his awsomeness.

 

[sunsetvalley]

? Per his latest post it seems none of the advice anyone gave him sunk in. Most appraisers know HBU and figuring out excess vs surplus land, its a fundamental part of coursework to get licensed.

FOR the record...I"m not a him.

 

[Renee Healion]

To the OP, how are the parcels autonomous if they both have the subject improvements on them? We are asked to comment on encroachments, easements, etc. because those conditions mean someone else has a right to the subject property. (Think of the bundle of rights). What would it take to convey the not-quite-vacant parcel as truly vacant, free of others using it? Something not worth doing?

Some posters respond to others without quoting them (I do that) when the discussion pace picks up, so you may not realize they are talking to each other.