• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

It's Not Assemblage, It Is 'as-is'

Status
Not open for further replies.

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Folks help me out here I am in the final steps of completing an assignment and need help with the wording...

Appriased a property where the legal description is of two parcels, transferred on a single deed, as is permissible in my state.

Without going into great deal of detail, please make the following assumptions - and trust that I REALLY have considered all H&BU issues and ferreted out all the legal complexities of the situation.

The 'front lot' has an easement permitting access to the rear 'flag' lot.

The value of the two sold separately (both being build-able lots) exceeds the value if combined, it is NOT a good idea to remove the grandfathered ability to do so. In other words, combine 'em and you permanently lose this advantage.

Therefore the value of the two lots sold together DUE to and DESPITE this quirk is significantly higher than would result from making an EO that they are combined. The property has transferred several times in this manner.

The value of the two sold separately SHOULD NOT be used in a single appraisal but was (of course) part of the H&BU analysis.

Am I departing (SR 1-3)? anywhere if I value the two together 'as-is per legal' since it is legally permissible to sell the two together "but not combined".

or

being misleading if I tell the lender my opinion of value of the two lots as sold separately IN the report, with a strong emphasis that I AM NOT valuing the property 'as such'...

and what USPAP gobblede-gook would YOU use to 'tell the story' and stay in USPAP compliance?!?!? :(

...so I can go help my parents. asap. I'd like to leave this afternoon. I am tired, stressed and need to finalize this and GO.
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
Lee Ann,

I think you've already answered your own question. The property in question includes two separate and developable parcels. In your opinion, the typical buyer would look at it this way and take that development potential into consideration when deciding the value of the property as a whole.

The fact that the typical buyer, if they are adequately informed and are working in their own best interests, would value the property this way is significant to your valuation. I would even go so far as to offer separate values for each of the two parcels as if sold solo, in addition to the value of the two together. The latter estimate is made under the assumption that the parcels would be sold together on the same deed as has happened in the past; The former estimates under the assumption that one or both of the pracels are sold off separately; you may have to estimate costs and affect on value for rewriting the deed(s) or do some other type of legal separation. The value with both parcels together will be the main value of the appraisal report, per the conditions of your assignment; and the separate values can be included as an aside, in the comments section. Make sure these different values are reported in conjunction with the assumptions or conditions that they are made with, so that your reader understands what you're doing.

Doing it this way will also allow the lender to set their loan up so that one of the parcels can be released from the loan at some point without having to get a completely new loan for the remainder. It also corroborates any valuation issues, such as why the subject is valued higher than comparable data that lacks this extra potential. If the lender's loan program has restrictions on the contributory value of the separable parcel, they can underwrite the deal properly with this information. Obviously, how they use the information is not your problem, assuming you have your facts in order.

In other words, report it both ways and let your readers decide how they want to deal with the situation. You can't get burned this way, assuming all your facts are correctly reported.

By the way, good luck on the family thing. You gotta TCOB.


George Hatch.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
George:
I put plenty of skull sweat into this one: I am rock sure (could crack) about the value end of it ... but is there anything other than plain words I need to throw at it in terms of USPAP to make sure no one throws rock pieces at me later?

blah bla SR 1-3 subpart fifty bazillian?
 

Fred

Elite Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Virgin Islands
Lee Ann,
USPAP compliance is appropriately measured by a credible solution to the appraisal problem, not by smearing pages with USPAP gobbledy-gook.

If the purpose of your appraisal is to find value for the combined lots, then USPAP compliance means doing exactly that. Sure, you should mention, in your opinion, that subdividing into two properties would generate more money. (More delay too, right?) You want to put that analysis in to support your statement? Go ahead. Hopefully you are charging appropriately, so they should get what they paid for.

If your specific request is to value the lots combined, then part of 1-3 are perhaps outside “the scope of work necessary.” You seem to have complied with it anyway. 1-3 says “analyze” the effect of regs, you have done that in your posts. And develop an “opinion” of the HBU or the real estate. You have sort-of indicated an opinion of the improved property, do you have an opinion for the vacant? Leave vacant or improve are your only two choices.

Lee Ann, you are a very conscientious appraiser. If you think something is OK, then it is almost surely at least 90% in compliance with USPAP – and that is an “A” in anybody’s book.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Not to sound like a broken record, but I agree....ditto.

You have the market data, know which would bring the most $$$, just tell the story. Maybe cut and past George's post as "your scope". ;) :p

With good clear cut data, I'd put both values in the same report too. And reiterate what you did, and why you did it, in the Reconciliation. That would be so the reader can read THAT line when they flip to the last page............like they always do.

If the client only wanted "the parcel as a whole" value, I'd note it at the begining and end of the report that the use does not meet the highest and best use, and that the parcles are worth more as single lots........ see appraiser's work file for support data.

Now go help your folks and try to get a bit of rest in between travels. Travel safely.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
If the client only wanted "the parcel as a whole" value, I'd paste it all over the report that the use does not meet the highest and best use, and that the parcles are worth more as single lots

Yep, last one I did like that I decided a narrative was the better choice and gave them all 3 values. Each lot separately then as combined with improvements placed so that the individual lots could no longer be sold separately.

Threw them all. The buyer and lender wanted the appraisal as combined which was not the H&BU. The sale prices was as individual lots totaled. BIG difference in values!!!!
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Thanks folks, just wanted to see if I was missing anything... had already decided to do the three value thing since I think their highest and best NEED err. exceeds the 'as is' estimate... and is reasonable but HOW the lender deals with that part is as they say NOT my problem. so it goes...

I now know how to estimate the value/cost of putting utilites down a long narrow easement with specific site issues, and many many other interesting factoids B)

no I didn't charge enough.

HO is a new to the area appraiser.
He didn't initially understand the problem. :eek:

I edumecated him. B)

His boss is on the board. :blink:

did I mention personal concern :( for report compliance and accuracy!?!?!

no stressssss... ;)


ta!
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Hmm...

Let me throw a wrench in here....Two parcels on one deed, that's OK. so we move on to how many assessor's parcel numbers exist next. Are the lots/sites assigned their own lot numbers by the tax assessor indicating that they are legal lots and taxed as such, one of which has a permanent access easement? If so, on to the building department...are they buildable lots/sites? You said they are.

So if they are already subdivided by the municipality, the taxing authority has assigned separate lot numbers and they are buildable sites, it doesn't matter that they are on one deed. The land value is the same as if they were separate. As George stated, all that would be required would be for a new deed to be drawn reflecting each already subdivided lot.

One report for the house and the lot. One report for the vacant lot.

Now if the deed is one of those old tract things drawn up when the area's was first subdivided and the rear tract is not an existing lot recognized by the municipality and your H&BU indicates possible subdivision,it's best to get a landplanner in there to show/tell you what the hell to appraise.

All I can say from past experience is that once you get above a house on a site, it's time for another professional to enter the scene because you have no way of knowing what the subdivided section is capable of being utilized for. I don't guess. I want to know so I let the land planner at it.

Any attorney can draw a deed combining the two lots into one legal description but that doesnt effect what is on the municipal records. IE, the attorney can't subdivide the site with a legal description nor can he/she destroy a legal existing lot by combining it with another. I believe only the municipal planning board can do that..but you're in Toto land so who knows out there. :D :D

Ben
 

Larry Lyke

Senior Member
Joined
Feb 2, 2002
Lee Ann ~

Your explanation of H&B might not meet the test in a review, based on the fact that you've got plottage but are attempting to deny it exists in order to make your situation work; while you're not saying that that's because the rear lot is a flag lot.

You probably can't put too fine a point on the issue. Maybe you can still work it intothe wording.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks