House + Car = contract?

[RustyLingerfelt]

This came up on another forum and I must say I have never had personal property transfer of 40k in any appraisal that I have ever done. Would the appraiser have to work under USPAP7-1c also as I can not see a car of 40k as a sales concession not require and adjustment to the market where this is not common practice. A little insight would be great. I think the builder is willing to find some new appraiser who would overlook and appraiser to contract thus creating a microcosm of value within a development and build in some 40k in the next three homes sold.

Your view are very welcome. Once more I don't know the who situation but the car not the use of the car is be included and the sale seems to be some 40-50 above the area. If the appraiser is doing this right the market will pull the value down with the right selection of comparables but in this day and time a hard-up appraiser might be inclined to seek out 400k comps no matter where they have to look.

Please your views.

Rusty

 

[Mztk1]

As always, play it straight. Your subject has a car. Find the three most similar, proximate and recent sales that bracket the subject in appeal (without considering the car) and make the appropriate adjustments. It is what it is.

In your analysis of contract for dollar amount of concessions you can put the difference between the contract price and the appraised value and state that it is the market extracted value of a car offered with purchase. Or, perhaps an inferior way, you can simply put "Car" in the value of concessions and just comment.

Be sure to state that the car had no effect on the value as appraised because you don't want to include the car in value and the lender sure doesn't want to lend on it.

 

[Lobo Fan]

The car is personal property and not a factor in your appraisal. I encountered this once where the seller was leaving a 90% restored 56 chevy in the garage. I just ignored ot and appraised the real property.

I recently encountered a comp that looked a bit high. I called and the seller included a 2005 Jaguar with the deal. Of course no mention in the MLS. That comp was not used. The Realtor said that the inflated price made appraisal just fine.

 

[PropertyEconomics]

The car is personal property and not a factor in your appraisal. I encountered this once where the seller was leaving a 90% restored 56 chevy in the garage. I just ignored ot and appraised the real property.

I recently encountered a comp that looked a bit high. I called and the seller included a 2005 Jaguar with the deal. Of course no mention in the MLS. That comp was not used. The Realtor said that the inflated price made appraisal just fine.

:Eyecrazy::Eyecrazy: Now did they really say that? :Eyecrazy::Eyecrazy:

 

[Mztk1]

You can't ignore it, you must disclose that the car is included in the contract. Just don't include it in your value. A '56 Chevy could effect marking time, too. It is a desirable and relatively rare car and someone might just end up jumping at the house in order to get it. Maybe without the car and with a reduced price, it takes that house a year longer to sell. Who knows?

 

[PropertyEconomics]

I agree with you 100% Jim. You cannot ignore anything in the contract and if personal property is included in the contract it must be addressed. I had to address four Koi fish left in a pond once becuase it was stated in the contract they were included.

 

[Lloyd Bonafide]

They might find an appraiser that will overlook the $40,000 car.

Hopefully they will never find an appraiser that will overlook a $400,000 house included in the purchase price, though:

http://www.nctimes.com/articles/2008/05/10/business/z556dff8a442c129788257444006cd63c.txt

The 4,000 square-foot homes in San Pasqual Valley include six-car garages and pools. With the purchase of a $1,599,900 home in San Pasqual comes a free $400,000, 2,000 square-foot home in downtown Escondido

 

[Doug Meyer]

I agree with you 100% Jim. You cannot ignore anything in the contract and if personal property is included in the contract it must be addressed. I had to address four Koi fish left in a pond once becuase it was stated in the contract they were included.

PE: You should have fed the fish to the cats or the birds and you would not have had to addressed the situation!

 

[RustyLingerfelt]

You guys say address the situation: explain, while I know that a reasonable person would disclose this we all know that the "car" affects all things within the market and as such must be dealt with- how is the question. I may be used to crutch up a value in a development, it might be used to move a dead beat sale and it might be used for fraud as someone will straw buy a home, get a big payoff and run away with the car. Total fraud starts at 40k and ends up where?

Really looking for something more than disclose and address. Thanks Rusty

 

[Mike Boyd]

Rusty....you are a certified general appraiser? Hmmm.

FIRST you acknowledge that piece of personal property in the report.

THEN, as Jim K wrote, you select the most similar, proximate and recent sales, add them in to the grid. Adjust for any differences, reconcile and WALLA! You have appraised the real property. If it so happens that the contract price was $40,000 below market value, so-be-it. If the market value is $40,000 LESS than the contract price, then, it is clear that they bumped the price to include the car. Don't make a big deal out of it. It is what it is.