Leased Fee

[Andrei Fin]

Renting out your property is still using it as you please. If that use is restricted somewhat by tenant laws, that's just a police power similar to zoning and assessment, and police power is fully compatible with the concept of fee simple.

 

[andrew81]

the definition of market value tells us the answer

MARKET VALUE: a type of value, stated as an opinion, that presumes the transfer of a property (i.e., a right of ownership or a bundle of such rights), as of a certain date, under specific conditions set forth in the definition of the term identified by the appraiser as applicable in an appraisal.

yes, it is a hypothetical sale, one that is presumed to have taken place on the effective date. the check boxes on the 1004 indicate what ownership rights are being appraised, not what rights are held by the current owner.

lets say we know the property is in an estate and the heirs are from out of town and just want a quick sale to dump the property. we go back to the definition of value to find

(1) buyer and seller are typically motivated;
(2) both parties are well informed or well advised, and each acting in what he or she considers his or her own best interest;
(3) a reasonable time is allowed for exposure in the open market;

even though we know these 3 things to be false, given the definition of value the appraisal presumes the three things are true even for an as-is reconciliation.

 

[Michigan CG]

at least she is asking good (noob) questions.

But she didn't ask any questions, just acted like she is smarter than the rest of the class (like she always does).

 

[Addie]

Read through the comments.


To clarify. No hypothetical value. Just a hypothetical condition is what I meant.

I agree intended use/user and appraise the fee simple rights. It MUST be under a hypothetical condition though. This is not an opinion.

Not like I care, was curious why FNMA appraisers do it incorrectly. Knowing or unknowingly.

If you check the box fee simple rights appraised. YOU MUST, unless you want to lie, do a hypothetical condition.

Why? Not a human on this earth holds those rights. They exist yes, but they live in the ether, they were severed in the real world.

 

[Addie]

.

 

[Addie]

the definition of market value tells us the answer



yes, it is a hypothetical sale, one that is presumed to have taken place on the effective date. the check boxes on the 1004 indicate what ownership rights are being appraised, not what rights are held by the current owner.

lets say we know the property is in an estate and the heirs are from out of town and just want a quick sale to dump the property. we go back to the definition of value to find



even though we know these 3 things to be false, given the definition of value the appraisal presumes the three things are true even for an as-is reconciliation.

 

[Dublin ohio]

Anybody want to dispute:

But she didn't ask any questions, just acted like she is smarter than the rest of the class (like she always does).

 

[Addie]

Got new phone. Apologize for the post back to back. Reply wasn’t working or my fault.

 

[Basically Rectangular]

Technically, the real property interest is the fee simple interest, the leased fee interest may be considered personal property rights. If the leased fee interest may be considered personal property, this interest may not necessarily transfer with or contribute value to the real property being valued, and any contributory value should be removed.

 

[Addie]

Anybody want to dispute:

Post #22

You want to agree with it?

You appraised the fee simple rights as of an effective date and not what the owner held? Yet you did it as-is?

So a property with a 4 yr lease. I appraise the fee simple rights via a check box, explain that its leased for next 4 years blah blah.

But wait? What’s the value???? OH no. You valued the fee simple rights as is. It’s under leased fee for next 6months-4yrs. These are the same values?


Please reconcile.

You value rights that no one holds....yet do it as-is