Hypothetical Condition?

[J Grant]

Don't they trust the builder/owner to do the job right. Is this a waiting time to see if it don't fall down. There are many appraisals done just to know the value.
I'm confused. Is this a refi now. So it can't be re sold for a year. The lender can take it tomorrow and that's all they care about, It takes a couple of years to foreclose sometimes anyway, not when you can sell it.
It's an underwriting issue, if the lender cares at all.

We have those with the CDC loans where they sell the house for less than it cost to build with a certain time stipulation for a re sale. They don't want to buyer to flip it tomorrow and take the profit, since that difference is a gift from the tax payers.

Correct. In many estate or divorce appraisals, the property may be tied up in escrow or held in trust/ not able to be sold until X happens. The appraisal valuation model is theoretical since no actual "sale" takes place in the real world on the effective date.... the OP needs to disclose the restriction, state they are not a title agent, and refer to the certs that assume marketable title for valuation purposes.

 

[Zoe]

Remember I appraise real property rights. This deed restriction or whatever is an impact on real property rights.

What if owner says I want to sell it tomorrow? Better yet, if owner says I want to sell as of the effective date.

You know very well owner will get a copy of appraisal.

 

[J Grant]

Remember I appraise real property rights. This deed restriction or whatever is an impact on real property rights.

What if owner says I want to sell it tomorrow? Better yet, if owner says I want to sell as of the effective date.

You know very well owner will get a copy of appraisal.

This is not a permanent deed restriction. There is no sale for the first year. A permanent deed restriction will affect the use/ property rights forever and thus would impact value. A one-year temporary sale restriction not much, if at all.

 

[CGinMN]

Implied in the definition of market value is the consummation of a sale. No
HC is required.

I too wonder how the county actually enforces this. Is it a legal encumbrance on the title? If it’s on the title, I would say it’s not your problem, similar to a lien or other financial encumbrance.

If it is not on the title, not all ordinances are enforceable. If the intent is to avoid unlicensed builders from building multiple homes, could they provide a variance so as not to impose a financial burden?

If this loan is for the secondary market, your client isn’t going to want the appraisal based on this hypothetical condition, so I would alert them if that is your intent. If that’s the case I’m sure they’ll want a second opinion

 

[Zoe]

Implied in the definition of market value is the consummation of a sale. No
HC is required.

I too wonder how the county actually enforces this. Is it a legal encumbrance on the title? If it’s on the title, I would say it’s not your problem, similar to a lien or other financial encumbrance.

If it is not on the title, not all ordinances are enforceable. If the intent is to avoid unlicensed builders from building multiple homes, could they provide a variance so as not to impose a financial burden?

If this loan is for the secondary market, your client isn’t going to want the appraisal based on this hypothetical condition, so I would alert them if that is your intent. If that’s the case I’m sure they’ll want a second opinion

It sounds something that needs to be addressed.

I would probably want my E&O lawyer's opinion first.


Nobody is in disagreement it needs to be disclosed. Client lawyer may be best lawyer on how they want it disclosed.

Client lawyer is probably clueless on the situation. E&O lawyer and local lawyers with jurisdiction are probably best sources in order to serve the client.

 

[Atlanta CG]

Buyer ends up in the home for 1 month then gets transferred, cannot sell his home for 11 more months. This might affect the numbers of buyers for the home.

 

[Zoe]

What if property values crash tomorrow for my client?

Keep property rights in back of mind.

 

[J Grant]

Buyer ends up in the home for 1 month then gets transferred, cannot sell his home for 11 more months. This might affect the numbers of buyers for the home.

It seems that the deed restriction applies to the original builder owner only, as some kind of county attempt to control new home contractor unlicenesd /permits or...some related new const reason.

 

[J Grant]

What if property values crash tomorrow for my client?

Then you can make 200 one-sentence long posts about it.

 

[Zoe]

We have come to consensus. Disclose it as HC or EA or both. Talk to some people.