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jhornet88

Freshman Member
Joined
Apr 26, 2014
Professional Status
General Public
State
North Carolina
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".
 

jhornet88

Freshman Member
Joined
Apr 26, 2014
Professional Status
General Public
State
North Carolina
I rarely do land appraisals. Does FM still not have an approved land form?
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Are you sure they are selling the loan to Fannie Mae? Ask.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
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

Freshman Member
Joined
Apr 26, 2014
Professional Status
General Public
State
North Carolina
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

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
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

Freshman Member
Joined
Apr 26, 2014
Professional Status
General Public
State
North Carolina
Only resistance is the lender wants and requested it be a 1004.
 

Jim Bartley

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
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.
 
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