How to include adjacent owned parcel

[V. Nightshade]

I'm appraising an SFR on a 7,500 sf parcel. The owner also owns an adjacent 12,500 SF parcel. Should I include both APNs in the form, and include both lot areas, or just talk about it. The existing loan is on the SFR; it looks like they bought the 2nd parcel outright. It's zoned agricultural, 2 acre minimum (these houses are on lots that were created at turn of 20th century). As I write this, I'm thinking I should call the client. It makes sense to include the adjacent parcel. Any further building on lots less than 2 acres require approval and design review.

 

[Farm Gal]

Sure call the cleint - find out if it is gonna be held in house or not... at least it lets you get away from any FANNIE issues... if they aren't secondary market... but I'd stay away from the Fannie form if so!!!

You have a bigger H&BU problem that you need to address:

Does the approval and design process prefer sites 'closer' to 2 acres but still not meeting the minimum as per zoning? Sounds like you are still under 1/2 acre even with the combined sites...

If there is no design and review premium over individual smaller sites like your 'improved' 7,500 SF or the unimproved 12,000 SF - would either have future ' Buildable' utility/H&BU absent assemblage to even more parcels to meet minimum per zoning? (startign with appraising the land!!!

 

[fifteen]

Find out from the lender if the intent of the loan is to encumber both parcels. If not, your job is just that one parcel. The borrowers may not want to encumber both parcels, you could ask them too for verification. Grandfathered in so you should check if the subject can be rebuilt if destroyed. While you're on the phone to the county, see if a new home could be built on the existing footprint of the homes on the adjacent lot. Then you get into well capacity, etc. SOW needs to be figured out first

 

[V. Nightshade]

The subject can be rebuilt, and I don't think there is a design review premium on pre-existing parcels, although there is design review to make sure septic etc. standards area met. But I think the answer does lie in the issue of the intent of the loan and what it encumbers -- probably only the 1st lot with the house. The broker is checking with the lender.

 

[PropertyEconomics]

I frankly dont see a reason to include the second lot. The question is what collateral is being taken for the loan? If it is for Fannie, it cant be a second vacant lot.

 

[timd354]

I frankly dont see a reason to include the second lot. The question is what collateral is being taken for the loan? If it is for Fannie, it cant be a second vacant lot.

PE, you are very seriously mistaken that Fannie will not allow a loan secured by both parcels...Fannie will unquestionably allow a loan on multiple parcels. .....see the following applicable Fannie Guideline:

VII, 102.04: Multiple Parcels as Security for Mortgage (06/30/02)
When the security property consists of more than one parcel of real estate, the parcels must be adjoining and zoned as “residential”; only one parcel may have a dwelling unit; and the mortgage must be a valid first lien on each parcel. For example, two parcels may secure the mortgage—one parcel on which the borrower’s residence is located and another adjoining parcel that can have either no improvements or limited nonresidential improvements (such as a garage).

The OP needs to contact his client to see if the property to be secured is to include only the one parcel or both parcels and proceed accordingly.

 

[PropertyEconomics]

PE, you are very seriously mistaken that Fannie will not allow a loan secured by both parcels...Fannie will unquestionably allow a loan on multiple parcels. .....see the following applicable Fannie Guideline:

VII, 102.04: Multiple Parcels as Security for Mortgage (06/30/02)
When the security property consists of more than one parcel of real estate, the parcels must be adjoining and zoned as “residential”; only one parcel may have a dwelling unit; and the mortgage must be a valid first lien on each parcel. For example, two parcels may secure the mortgage—one parcel on which the borrower’s residence is located and another adjoining parcel that can have either no improvements or limited nonresidential improvements (such as a garage).

The OP needs to contact his client to see if the property to be secured is to include only the one parcel or both parcels and proceed accordingly.

Yes you are right Tim .... my comment was about the second lot as a stand alone ... yes you are right together they can be mortgaged.

 

[The Warrior Monk]

This is a situation where you would have to know how the municipality handles the situation. Both lots are nonconforming with regard to size, and the total size of both lots is also does not meet the minimum lot size requirement. In many municipalities that will cause an issue regarding the single-and-separate nature of these properties.

For example, in some of the municipalities I work, if those parcels were under the same exact ownership, those two parcels would no longer be considered single and separate due to their nonconforming nature and the fact that at least one parcel was vacant. In others, the fact that there is a common owner between the two parcels could be an issue.

In these cases, the fact that one, or both, properties were encumbered by a mortgage would not matter.

I'd recommend getting a copy of the deeds, surveys, then take a trip down to the planning department. It is essential in identifying the legal status and utility of the property to be appraised.

 

[Richard Carlsen]

Forget all of the worry about H&BU of the additional lot or doing the report as an HC. Just contact the lender and ask if the "site" is to be comprised of both lots. If the client says yes, ask for that in writing. You are now working on the designated site contained within the assignment conditions. Your site will be described as "lots X & Y of plat etc." You do not have to worry about single parcel ID numbers or if the additional lot is more valuable if sold separately. Since the client tells you to consider the site as the two contiguous lots, you have no responsibility for determination of H&BU of the additional lot or the two lots not being under 1 parcel number, etc. Any problems with parcel numbers, joining the two lots together legally, etc. rest entirely with the client. The site to be considered in the opinion of value in your appraisal has been decided for you in the assignment conditions, which you are not at liberty to change.

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[BNICK]

it appears to be "surplus land" and there are guidelines for appraising surplus land, do not confuse with excess land