Form Question

[jhornet88]

Lender requests appraisal "land only". Essentially the site is being purchased for new construction, ie tear down. No contributory value towards improvements, they will be scraped. General land form, or 1004? Land form makes sense, but not fannie mae approved.

All Comps will essentially be former tear downs themselves. No true "vacant land".

 

[Pittsburgh Pete]

Think highest and best use! Would use land form.

 

[jhornet88]

I rarely do land appraisals. Does FM still not have an approved land form?

 

[Terrel L. Shields]

Are you sure they are selling the loan to Fannie Mae? Ask.

 

[Meandering]

Lender requests appraisal "land only". Essentially the site is being purchased for new construction, ie tear down. No contributory value towards improvements, they will be scraped. General land form, or 1004? Land form makes sense, but not fannie mae approved.

All Comps will essentially be former tear downs themselves. No true "vacant land".

The land appraisal most likely is not going to go to the GSEs.

Talk with your client, to make sure, but I suggest the land form, and try to score the construction loan appraisal and inspections through the process, with the 1004 at the end of construction for the final mortgage. Most likely, it's the end of the construction loan appraisal for the primary mortgage that the appraisal will need to be GSE compliant.

.

 

[jhornet88]

Some more info:

There is currently a 1,200+/- so one story home in bad shape on the property. Its a booming neighborhood where smaller, older homes are being razed left and right to make way for $700-$900K new construction.

Comps aren't an issue. There are a dozen similar scenarios where the same "tear down" process has started all within last year, all within 1/4 of a mile tops.

Anything against a 1004, and making no adjustments for square footage, condition, anything else. All C6's. Only adjustment would be based upon site value? Or just convert to a land appraisal with the same exact comps?

Also would you feel obliged to measure, sketch, take pictures of the improvements, knowing they are going to be razed anyways? I would assume the only reason to do so would be to verify poor condition for highest and best use purposes.

 

[Howard Klahr]

I would assume the only reason to do so would be to verify poor condition for highest and best use purposes.

You are correct, that ios why these tasks are performed

Anything against a 1004,

Nothing other than it is the wrong form for the assignment, assuming that the H&BU is a tear down. You wouldn't use a 1004 for a condo, Manufactured home, or duplex now would you?

You already know the answer, what is your resistance?

 

[jhornet88]

Only resistance is the lender wants and requested it be a 1004.

 

[Terrel L. Shields]

I would not do it. Let someone else fall on their own sword.

 

[Jim Bartley]

In the situation you have described I would not have a problem using the 1004. The subject and all of your comps (based on your OP) have improvements that do not contribute to the value.
All the value is going to be in the site and your comps and commentary will make that clear to any reader of the report.