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Land value and value opinion are the same - UW questioning

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Just adding that explanation to the report will contribute to the user's decision making. If/when there's any ambiguity or uncertainty in the data, "more disclosure" will always be better than "less disclosure".

I dunno how appraisers get by in non-disclosure states when they can't nail down the price/terms of the transactions.
 
Just adding that explanation to the report will contribute to the user's decision making. If/when there's any ambiguity or uncertainty in the data, "more disclosure" will always be better than "less disclosure".

I dunno how appraisers get by in non-disclosure states when they can't nail down the price/terms of the transactions.
I agree more explanation is better. Yes, it does make it difficult. There's no visibility into off market sales and for MLS sales all we can go by is what the realtor reports.
 
There's alot to your comment. Addressing just the part about how these houses are being marketed...If a wholesaler can get to the owner first, then the property will probably go off-market to a flipper or scrape-and-replace developer. If a Realtor gets there first then it hits the MLS and will sell to an occupant owner because it will be too expensive for either the flipper or developer. Texas is a non-reporting state so it's nearly impossible to get solid numbers on what the flipper/developers are paying. In some areas of the city (very expensive areas) SFRs are being sold on MLS and subsequently redeveloped, but that's a relatively small part of the market.
The fact is in transitional or mixed areas, where some houses are torn down for development and others remain owner-occupied, the developers and the owner-occupant buyers compete against each other, so both would pay a similar price to buy the property - they just have different plans for it after they buy.
 
IMO, you need to find ( and should have included it before, ) if it exists, a similar condition house on a large lot 18,000 sf 10 24,000 sf lot size -if none exists, then it does not, but at least look for it - picking comps is the most important part of the appraisal and a much larger than typical lot is a dominant feature of the subject, so that is a feature of high value and appeal I would want to bracket as a sale comps or 2 or more of them if they exist - back a year plus, or a bit further out in a similar area -
 
I agree more explanation is better. Yes, it does make it difficult. There's no visibility into off market sales and for MLS sales all we can go by is what the realtor reports.
That's one situation that would justify keeping a running tally on known sale/list ratios, for use in considering the active listings in the analysis.

If the prevailing sale/list ratios for the closed sales are at or near 100% then you can use that with the current actives. Similar regardless of what the actual ratio is. If most are closing at 95% or 110% that's good to know. Even if a lender doesn't want to see actives being given any weight.
 
I have five solid comps (within a mile, sold in last 5 months) for sales comparison in approximately the same condition that run from $212k to $245k, with one at $155k unadjusted. After adjustment the sales comps are $210k to $241K with gross adjustment % of 17 to 35%. I have five land comps from 18 to 21,000 sf (subject is 20,000 sf) that sold for $200 to $275,000 within the last 18 months.
It is possible the subject is undervalued in your appraisal - if only one of our comps had a large lot of 14,000 sf and no bigger lots to bracket the subject lot , and one comp does not belong there ? that unadjusted sold for 155k-, and land sales of up to 200k- 275,000 for a large lot 18-20,000 sf - the subject might be worth 300k with a 260k value lot (for example ).

This is where the problems originate for most appraisals - poor comp choices . Why is a com that sold for 155k there, and where are the comp sales of houses on large lots ....find a few and put them on - if they exist-
 
yea grant, with too wide of a price choice. the question that i ask is. is the high one too high, or the low one too low to prove your reasonable value, and not add confusion. maybe outlier sale. same with you 2 approaches, is one to high or to low.
you have the rehabd sale of $327,000. what was the purchase price of property with land and a house on it. in rehabing you can go backwards taking out the rehab cost, costs to purchase, sell and holding time costs, and don't forget your 20-30% profit, if you guessed right. and so you have what should be your office price to get to the $327,000 sale. but if there is a house on the ground then figure that out. doesn't leave a lot for the ground. but a provable method for your work file.
i still would like to know what they are building on those $200,000 lots and what are those prices. i bet they ain't $327,000, but a lot higher.
 
yea grant, with too wide of a price choice. the question that i ask is. is the high one too high, or the low one too low to prove your reasonable value, and not add confusion. maybe outlier sale. same with you 2 approaches, is one to high or to low.
you have the rehabd sale of $327,000. what was the purchase price of property with land and a house on it. in rehabing you can go backwards taking out the rehab cost, costs to purchase, sell and holding time costs, and don't forget your 20-30% profit, if you guessed right. and so you have what should be your office price to get to the $327,000 sale. but if there is a house on the ground then figure that out. doesn't leave a lot for the ground. but a provable method for your work file.
i still would like to know what they are building on those $200,000 lots and what are those prices. i bet they ain't $327,000, but a lot higher.
We are not in the area of course, but the OP went dark on why they did not include comps of houses on large lots in the 18,000- 24,000 range. Did none exist, or did they just not bother finding them? Sometimes finding a good comp means further back in time or further away but in a similar area.

a buyer for a house on a 7000 sf lot is typically not the same as a buyer for a house on a 20,000 sf lot. The large for area lot is clearly a big deal both in price and utilit/appeal. It also makes that lot far more valuable either for its subdivision potential or potential to build/expand to a large house, add a workshop etc

The 155k comp, in my opinion, does not belong there. Appraisers should not throw in a sale just because it is in the area or to vertically bracket a low end or high end - that one sale which does not belong there can greatly skew a value - noting much else matters in an appraisal if the comp choices are bad -
 
IMO, you need to find ( and should have included it before, ) if it exists, a similar condition house on a large lot 18,000 sf 10 24,000 sf lot size -if none exists, then it does not, but at least look for it - picking comps is the most important part of the appraisal and a much larger than typical lot is a dominant feature of the subject, so that is a feature of high value and appeal I would want to bracket as a sale comps or 2 or more of them if they exist - back a year plus, or a bit further out in a similar area -
I agree. i looked. There were no comps on equal or larger lots. 14,000 sf lot was the largest i could find.
 
FHA reverse mortgage. 1955 house on 20,000 sf lot. House has some unfinished work, missing door casings, etc. but pipes and wiring were replaced. Definitely livable. Sales price of comps is $215K, 214K, 212K, 155K, and 245K. Adjusted values are $232K, $237K, 241K, 210k, and 228k. My value opinion was $230k. Cost method comes in at $320k, mostly because site value is $225k. Five solid comps for land value between $190,000-235,000. UW is questioning land value. Have already set the effective age to 30 years so I cant get any more depreciation for cost approach without deep-sixing the loan. Any suggestions on how to reconcile the two approaches or explain to
How did you end up handling it? I have found UWM very detailed in their reviews.
 
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