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Is This A Proper Line Of Questioning?

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Joined
Nov 2, 2006
Professional Status
Certified Residential Appraiser
State
Pennsylvania
I am doing an FHA purchase of a small home on a 3 acre wooded lot. Its a very odd situation as the broker listed the home for $200k and sold it after a week for $235. I asked the listing broker what was up and he said he purposely listed it low to garner interest and got 8 offers in two days, starting a bidding war. Bidding wars have been very unusual in the last 8 years or so here, and I had to wonder about the broker's claimed methods (what if someone showed up with a $200k cash offer the first day?), but hey, the market IS improving and maybe he was just giving me a line to hide that he originally underpriced the subject and got luck. The buyer's agent also told me the same thing so I guess I could be wrong.
In any case, when I went to inspect the property, I noticed what looked like a 200' utility ROW cleared across the woods as far as I could see that cut across his driveway. There were no orange standpipes apparent anywhere, however. In addition, the access was through a shared drive. That day, when I spoke to the listing broker he denied that there was an easement, claiming this area was cleaned out for hunting and kept assuming I was talking about the access row easements.
When I checked the deed and the plat, it shows that there is indeed a gas pipeline easement right where I saw it. So my question is this; should I check to see if the buyers were aware of the situation? I would like to know the particulars of the current sale and if the buyer was fully informed. But I also wonder if there is anything improper in my possibly throwing a wrench into the whole situation.
Such easements do not necessarily have a significant effect on value in any case and there is at least one comp that has a similar high tension wire going through their property, so the contract price may well be correct. But I would be very suspicious if the price was not based on full disclosure.
 

miktay

Senior Member
Joined
Jul 3, 2007
Professional Status
Certified Residential Appraiser
State
Texas
So my question is this; should I check to see if the buyers were aware of the situation? I would like to know the particulars of the current sale and if the buyer was fully informed.

Should you? No.
It's not your job or duty to inform the buyer. If you choose to, that's your own business but it's the buyer and his agents job to discover these things on their own.
It is your duty to make it very clear in your report.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
We as appraisers are not supposed to be contacting buyers about what we find on the property since they are not our client, nor interfering with deals , nor caring whether the purchase price is "correct"

Appraise the property with any impact you find on gas easement and the appraisal will inform the buyer of the situation.

Their contract purchase price may or may not be based on a well informed buyer, however your market value opinion will be based on the hypothetical well informed buyer. (which is why appraisals are ordered)

If appropriate per your judgement you can comment on your conversation with agent, their denial of easement and unknown to you if buyer is informed about easement.
 
Last edited:

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
Obtain a copy of the site Survey (tax plats are often incorrect) from:
1. the Lender/Client,
2. the local Municipality (B&Z office),
3. the County, and
4.lastly request one from the Listing and Selling Agents.

Then report your finding of market reaction IN the appraisal report.
p.s.
Active (or defunct) Gas Lines v Power Lines OFTEN present DIFFERING impact on marketability & market value.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
should I check to see if the buyers were aware of the situation?
NO
the plat, it shows that there is indeed a gas pipeline easement
Low pressure? High pressure? Coming from a Marcellus/Utica well to a transmission pipeline? Or is it a transmission pipeline. The ROW may be wider than the actual easement. You have an easement to explain and need to do some research and see if it is going to impact value.

https://www.npms.phmsa.dot.gov/PublicViewer/
 

boardman

Freshman Member
Joined
Feb 19, 2016
Professional Status
Certified Residential Appraiser
State
Michigan
We have oil/gas lines in michigan; if you have no experience with this - this is one of those "competency" issues and need to get another appraiser who has to help you or respectfully decline with SOW change and charge the proverbial "work thus far" fee. Just for your reference, there ARE extraordinary assumptions you can make but the FHA part of it, ie; (gas IS typically a "high pressure" line) will SOW you to death. I will try to post some more but on a deadline, just for thought provoking sake...
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
(gas IS typically a "high pressure" line)
No, most gas lines are low pressure. The gathering system is low pressure (relatively speaking), a compressor station increases pressures to 200-1500 psi for transmission long distance , and the distribution system distributes very low pressure to end users. In PA, it likely is part of a distribution system if a relatively new line. There is a sign on the line somewhere that has a pĥone number, so call it.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
And there can be issues as to proximity of the gas line to any improvements, even though outside the easement ROW. Also, age of the pipe line, etc. from the width of the ROW, I would bet a high-pressure line, not a service line, so do your research. Pennsylvania should have an entity that oversees gas pipelines. Give them a call.
 
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