O & A - Offer and acceptance. That was rumor and I think is not true. The transfer price was $232,000 and the deed stamps reflect that.
The lawyer charges that I appraised the property for the value of the sellers mortgage ($232,000) which happens to also be the sales price. The bank actually took a $258,000 mortgage (115% ml LTV). The seller split off 10 ac. with a poultry farm and kept a house and 10 acres. But he did not have to bring any money to the table to get rid of the chicken houses..ie.-he did not have to borrow money to close. The buyers apparently were related distantly (again I just learned that). The deed was filed 2 days before my inspection (i.e.-the bank closed the loan before the appraisal was done, very common for this bank and not unique here.) The bank and company are privately held. This bank is tied to the Poultry Company, i.e.-the "intergrator", vertical integrated company from hatching, growing, feeding, processing of the bird. poultry farmers do not own the birds, nor pay for feed - the integrator owns it all except the barn. The grower provides the labor, water, gas and electric. THey are paid for the gain...i.e.- per pound of bird. Your performance is ranked according to bird size. The 25% who grow the most pounds of bird per pound of feed are paid more which is only pennies per pound. However, a 5 # bird with 19,999 other buddies amounts to a good tonnage 5 times a year and that is only one house. This farm had 4. The Top bracket makes much more money than the bottom bracket, nearly double. You are advised by the company field man who recommends temperatures, feeding program, etc. Each bird will average about 25 cents in top bracket, maybe only 15 cents in bottom. Consistently coming in the bottom bracket endangers your contract. Most growers occasionally come into the top 2 brackets, a few never do because they do not do what the field man tells them to do. New house contracts are generally 5 years or the banks won't finance them, but old houses are generally only batch or annual contracts.
Most poultry company vs poultry grower lawsuits are contract disputes. This dispute appears to try and go beyond this, claiming because the BANK which is owned by the same people who own the POULTRY COMPANY, they have somehow conspired to steal these people's property. Mind you, they approached the company about transferring the contract (necessary before selling a farm to get the integrator's approval because the contracts are between owner-company.)
Of course, as I alluded above the bank loaned more than 100% of the value, probably because the poultry company thought the seller was not doing a good job and asked the bank to facilitate getting new blood on the farm. After all, there are only x many birds so it is more profitable for the company to have a better bird and they willingly pay more. In this case it went from fair to really bad.
The client is a bank. The plantiffs were the borrower on the larger tract and a year after the son bought this place his father bought a smaller one nearby that had been on the market for about 18 months. I had appraised it for the previous owner for the same bank, so apparently they simply took my report out of the first file and placed it in the second file of the father. I appraised it only recently for the new owner (sold by the bank for $50,000 as is but they loaned an additional $50,000 to the buyer to repair the dwelling and to re equip the poultry barn. This owner also bought the first tract paying $170,000 and again borrowing bucks to refurbish the dwelling and poultry barns. This buyer has 3 other farms and a crew who works for him. I GAR N TEE he will make a profit as he was once the flock manager for this same company and knows how to raise birds.
Raising chickens is really not brain surgery, just do what they tell you even when it irks you and you can survive. Clearly the business is not as profitable as it was many years ago when Chicken was a growth industry, but you can do it if you try.
As a private bank, mind you, this outfit will loan without reference to my or anyone else's appraisal and frequently close loans before they even send me the appraisal request. These appraisals are generally only for compliance purposes.
The tract sold Oct. 24/25 and I inspected it Oct. 28, reporting the value 10/30. I had no evidence that the transaction was not arm's length so I appraised it for the sales price. As for the other parcel, I never appraised it for these borrowers period, yet I am apparently going to have to defend an appraisal for some other borrower from 1 year before that property was sold. It sold in 87 for $130,000 abt. $140,000 in 93, listed in 95 for $160,000, I appraised in 96 for $134,000 and it sold for $128,000 in 1997 (I think I mistated somewhere else it sold for $140,000 but i rechecked my records and found an old tax history)
I doubt anyone else has appraised it. The first tract I have appraised twice while the Varners owned it, once when the bank owned it, and once when the new owner owned it (again I was sent to appraise it after the sale closed) The other tract was appraised 1 year prior to sale for the current owner then. The only other time was in Feb this year when I appraised it for the new owners. ALL the appraisals are for this same private bank.
