Lender Requesting Commentary to be removed

[Paradiddle]

Answered.

 

[George Hatch]

So, for you this is a new assignment?

People get wierded out about the term but it doesn't mean anything other than the appraiser put a little additional thought into what they were doing. There's no call to be doing another inspection or writing a fresh report from scratch. All we're doing is trying to match the service with the intended use/user in light of this additional or updated info.

If you changed the effective date by a day that would technically trigger the "new assignment" but it wouldn't require any additional work other than considering the question of whether anything about the subject or its value had changed during the interim.

It's the difference between looking at these issues in terms of the underlying concepts and principles instead of the mechanical rote of this 1004 looking almost exactly like that 1004.

Like I said before, if this was a test there would be a correct answer and an incorrect answer.

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If you intend to do what you wanted to do anyway then there's not much point in asking the question.

 

[Elliott]

Whenever I run into the extra parcel problem, I usually caution anyone that including it in the mortgage and then wanting to sell it someday that the lender will call me and want three appraisals before they will release it.....so it might be a good idea to not include it with this mortgage. They usually agree. Its just easier than including the extra parcel.

 

[Surf Cat]

As far as why or why not you did or did not include the excess land.

This is what I can't wrap my head around. If the excess lot next door was included in the purchase contract, why wasn't it included in the valuation?

Was the client informed that's how the subject was going to be valued?

Were the comparable sales on single lots or double lots?

Something's missing. If I was the buyer, and I was going to pay the same price for the subject property sans the lot next door.....I'd be pissed and pull out of the deal. Unless a new contract was drawn up.

 

[ddnma]

The excess land is included as "value in use". Argue with Fannie

FNMA will not come to your defense if you go before your state board. They have no regard for USPAP, they think they are above it. That is a fact

 

[Surf Cat]

Now they have an updated purchase agreement w/o the other lot and want me to remove the commentary I previously made. Thoughts?

Different purchase price now?

 

[Dublin ohio]

This is what I can't wrap my head around. If the excess lot next door was included in the purchase contract, why wasn't it included in the valuation?

Was the client informed that's how the subject was going to be valued?

Were the comparable sales on single lots or double lots?

Something's missing. If I was the buyer, and I was going to pay the same price for the subject property sans the lot next door.....I'd be pissed and pull out of the deal. Unless a new contract was drawn up.

It is confusing as can be. Buyer agrees to pay $x for house and 2 lots. Appraiser only values house and 1 lot. Logic would dictate that either the value supported the sale price, or it didn't. We don't know. Now the contract has changed and only includes the house and 1 lot. Obviously the value opinion didn't change. But did the contract price change? If the additional lot was not included but the value opinion supported the sale price, it would appear that the second lot had little or no value. Like you said, "something is missing".

 

[Surf Cat]

It is confusing as can be. Buyer agrees to pay $x for house and 2 lots. Appraiser only values house and 1 lot. Logic would dictate that either the value supported the sale price, or it didn't. We don't know. Now the contract has changed and only includes the house and 1 lot. Obviously the value opinion didn't change. But did the contract price change? If the additional lot was not included but the value opinion supported the sale price, it would appear that the second lot had little or no value. Like you said, "something is missing".

If the lot is excess land with a separate APN, it can be included in the appraisal as part of the total value.

The value of the lot should be included under "value in use" as part of the overall property.

The appraiser does not need to conduct two separate appraisals—but must ensure the HBU is consistent and the analysis supports a single economic unit.

Fannie Mae permits this, but USPAP requires a single HBU; thus, the appraiser must avoid implying multiple HBU conclusions.

If the lender requires a separate valuation, the appraiser should include a hypothetical condition or addendum explaining the inclusion of excess land and its contributory value.

 

[Dublin ohio]

If the lot is excess land with a separate APN, it can be included in the appraisal as part of the total value.

The value of the lot should be included under "value in use" as part of the overall property.

The appraiser does not need to conduct two separate appraisals—but must ensure the HBU is consistent and the analysis supports a single economic unit.

Fannie Mae permits this, but USPAP requires a single HBU; thus, the appraiser must avoid implying multiple HBU conclusions.

If the lender requires a separate valuation, the appraiser should include a hypothetical condition or addendum explaining the inclusion of excess land and its contributory value.

I brought the above up earlier in the thread, but the OP disagreed and insisted they have always done it their way. Oh well, I'll just consider it a mystery

 

[J Grant]

Technically, it should be a new assignment. Which does not have to be a big deal-one can keep the original effective date of inspection if client agrees. Good to give it a new file number or put a letter like A or B on the existing client file number. Disclose that you performed a prior service on the property ( the first appraisal report )

Among the USPAP conditions of when it is a new assignment is when a different SOW or physical characteristics of the property changed. This is a new SOW ( appraise the house on one lot only, the first assignment was appraise the hous on its one lot together with the adjacent vacant lot which is the excess land .

Now, in this case, can the OP do it as the same assignment with a comment that there was a change to the contract? Sort of ...because to be frank, they screwed up the first time and appraised only the house on one lot (when the assignment was appraise the house with the adjacent lot) . Incredibly lucky that the client/buyer decided to change the contract and is now buying only one house on one lot.

We are not the purchase police. People can buy whatever they want. It is legal for people to buy a house on a lot together with additional lot or lotss ( excess land ). If it is cash, nobody cares.

But in a financed deal...typically the additional lot or lots are encumbered under a single mortgage. That is legal too. A post from Elliot he advises his lender to make separate mortgages. I am not a mortgage broker advisor, nor do I play one on TV. I stick to appraising. For FHA, they want only the primary lot valued. For other financing, Fannie and Freddie allow the excess land to be valued and it is encumbered under one mortgage. If anyone feels not competent for this kind of assignment, then decline it. There have been many prior posts about how to value it.