Help 2 parcels 1 purchase?

[Mike1918]

I recieved an order to appraise 2 lake front parcels involved in a purchase transaction. As part of the request I received 2 purchase agreements one for each parcel. Parcel #1 has a house and parcel #2 has a seasonal cabin. After a conversation with the realtor I found out that both parcels have to be sold together and will be combined into one single taxable lot after the taxes are paid at closing. I first told the LO requesting the appraisal that I would do separate appraisals on each property. Now the lender is saying that they need a single appraisal as one property. How would I go about doing this? I have dealt with multiple parcels in the past but only as unimproved and as excess land. Any suggestions would be a great help. Thanks!

 

[bart nathan]

Most lenders want the appraisal as is.

If they have not been combined yet it can not be a as is appraisal.


just my opinion

 

[Couch Potato]

I recieved an order to appraise 2 lake front parcels involved in a purchase transaction. As part of the request I received 2 purchase agreements one for each parcel. Parcel #1 has a house and parcel #2 has a seasonal cabin. After a conversation with the realtor I found out that both parcels have to be sold together and will be combined into one single taxable lot after the taxes are paid at closing. I first told the LO requesting the appraisal that I would do separate appraisals on each property. Now the lender is saying that they need a single appraisal as one property. How would I go about doing this? I have dealt with multiple parcels in the past but only as unimproved and as excess land. Any suggestions would be a great help. Thanks!

Is there any regulation preventing the owner of both parcels from using them as though they are one? Obviously there is no prohibition on a single person buying both parcels. Are the parcels currently under single ownership? Are sites the size of the two parcels combined typical in the area?

The most important thing from a USPAP standpoint, have you explained to your client your competency issues and your plan to address them?

 

[Lee Lansford]

...How would I go about doing this? I have dealt with multiple parcels in the past but only as unimproved and as excess land. Any suggestions would be a great help. Thanks!

Does each parcel have its own separate H&B Use? Let me guess as to the answer: Yes.

Next, following (assuming "yes" is the correct answer above) it would appear likely that the MV of each property--separate from the other--would have (adding the 2 opinions together--NOT that I am suggesting such is appropriate) a combined MV in excess of the market value IF the two parcels were in reality one.

IF all of the above are correct, IF you appraise the 2 separate parcels as though they were one, when you respond to the question "Is the highest and best use AS IMPROVED...the present use?", will you "X" the "NO" box as appropriate?

I have assumed here that you are communicating the appraisal via a current Fannie form and you will not be employing a Hypothetical Condition.

I love some lenders/clients who want to make a square peg fit into a round hole.

 

[Couch Potato]

Quite a few assumptions there Lee. (Although they may well be valid.) It is also possible the highest and best use is combined to make a single family residence with an accessory unit. So much depends on the local market and the local regulations on development.

 

[CANative]

Or it could be that one or both of the lots are substandard and must be merged at time of sale under current zoning laws.

 

[Lee Lansford]

Quite a few assumptions there Lee. (Although they may well be valid.) It is also possible the highest and best use is combined to make a single family residence with an accessory unit. So much depends on the local market and the local regulations on development.

C.P., yep, quite a few assumptions.

I have observed for a long time now that--quite often--when an appraiser comes to this forum with a question, there is insufficient information for experienced appraisers to provide the best possible response. Thus, rather than figuratively "pull teeth" in obtaining everything necessary, I find it simpler to take a few guesses at what is necessary but was not provided. It beats coming back to this string a day later and having to sort through 20-30 responses and attempt to piece everything together.

Lee

 

[Couch Potato]

Very true Lee, and very likely your assumptions are valid.

 

[Mike1918]

I am sorry if I left out information. I found out some additional information today. Both parcels are 1 1/2 lots. Parcel #1 is lot 10 and the north 1/2 of lot 11 and parcel #2 is lot 12 and the south 1/2 of lot 11. Originally all 3 lots were 1 parcel and were split by the previous owner. He took out loans on both parcels and then bailed on the loans sending them both into foreclosure. Both properties are now bank owned.
When I first recieved this request I told the client that that it would be 2 appraisals on 2 properties for 2 purchase transactions. According to the realtor for the seller these properties are to be combined back into one parcel due to current zoning requirements. I have yet to speak with anyone at the county offices due to being out of state on vacation. Also the realtor told my client that he has sold properties like this in the past and has always had only one appraisal. He specifically mentioned one instance when 4 parcels were included in one appraisal.
That is why I have come here. Am I correct to tell my client that there is no way to do an appraisal on 2 parcels that are hypothetically combined?

 

[Blueprint]

Do you have a copy of all the needed info for the proposed lot (legal description, etc)? Does it have to be done "as is"? You can do the appraisal yet it needs to be subject to verification that the parcels have been legally combined.