Land Appraisal

[The Warrior Monk]

In many parts of the country its not much more difficult than writing on a napkin. 1.) Order a survey, 2.) prepare a deed yourself if you're the owner (in this state owners can prepare their own deeds) of have an attorney do it, 3.) record it.

I can see where people in heavily regulated states and locales have trouble with this concept but in much of the 'flyover' part of the country splitting land is really not a big deal. What you can do with it after the split is another issue and goes to the HBU analysis.

The date of value is an element of the scope of work. An unsubdivided property that needs to have a survey performed and paid for resulting in a split at a future date is not the same as a two building parcels existing as the date of value. Even if a deed can be written on a napkin. For a lending assignment this fact is critical.

 

[Mark K]

Or just call up a surveyor and ask them to write out a legal description for a couple hundred bucks.

I sold to the adjacent neighbor a 50' strip off of the long side of a 50 ac tract that I owned. I took the deed for the 50 ac. tract to a local surveyor, he wrote up the legal from that and I picked it up the next day and then had a deed prepared. In many areas, its really not as complicated as some would lead you to believe.

 

[Mr Rex]

The date of value is an element of the scope of work. An unsubdivided property that needs to have a survey performed and paid for resulting in a split at a future date is not the same as a two building parcels existing as the date of value. Even if a deed can be written on a napkin. For a lending assignment this fact is critical.

To the typical buyer, would the cost of a formal survey change the overall value beyond the cost of the survey if at all? In most cases it would involve rounding to the thousands (at least in my area).

 

[Amy Perkins]

In the past, I have had a loan officer request to appraise just a small area around the house in an effort to conform with a non-rural loan of under a certain amount of acres. In this case the lend writes their rules so that they can identify the risk they are taking. In this case it would be considered misleading.

In the past I have had a portion of land being dedicated to a community well, in which this was for a parcel release. This required a before and after appraisal.

Other things to consider are zones of value, where property located closer to the ocean or waterway had a higher value.

There was also a situation of which I did not perform the appraisal but I was working to acquire a piece of land, it was just a small piece of a very large parcel, but it was also the only area that had good percolation. They ended up getting way more in court than what the original appraiser valued it at... three fold and he was an appraiser with an MAI. The opposing appraiser was not even licensed, but it was for the government.

In my experience, it is important to know the "purpose" of the appraisal so that you can produce a meaningful, credible report. Whether or not it matters to you is your choice and of course your opinion. When you get into the actual nuts and bolts of it, it may end up being simple or more complex. All I am saying is you better find out and make sure that you can increase the fee in the midst of the report if it gets complicated. Usually if you give them a heads up before hand, this will be acceptable to an AMC.