Lender Requesting Commentary to be removed

[Surf Cat]

Also, it may have a different highest and best use than the rest of the site.

If this were the case, the adjacent lot would have to be valued separately as value in use or interim use have to be the same H&B use (to value together).

Because of its ability to be sold, developed, or used independently, excess land is considered to have its own value and should be appraised separately.

We don't know because the OP never clarified or made it clear.

From what I gathered, the adjacent lot was to be included in the sale of the lot with the improvements on it. You can't dictate to someone how they should sell their properties....yet, this is what the OP "seemed" to do.

I believe I've only done two appraisals with this situation. How I handled it was as I posted in post #48. I used the technique Mike Ault describes in post #59.

 

[Surf Cat]

What would you call the value of those lots in that scenario? Would you refuse to incorporate them into your appraisal of the SFR next door due to HBU concerns?

This is what the op "seemed" to do. It appeared he just refused to incorporate the adjacent lot in the valuation when it was in the purchase contract.

 

[jay trotta]

If this were the case, the adjacent lot would have to be valued separately as value in use or interim use have to be the same H&B use (to value together).


We don't know because the OP never clarified or made it clear.

From what I gathered, the adjacent lot was to be included in the sale of the lot with the improvements on it. You can't dictate to someone how they should sell their properties....yet, this is what the OP "seemed" to do.

I believe I've only done two appraisals with this situation. How I handled it was as I posted in post #48. I used the technique Mike Ault describes in post #59.

Agree, but this is why the "complexity" needs to be discovered and priced accordingly. Not an afterthought.

 

[Carnivore]

He erased his comments. I had a question . As I recall he was asked to remove a comment in the 2nd report that he carried over from the first report.

Does anyone know what that comment was?

 

[Mike Ault]

He erased his comments. I had a question . As I recall he was asked to remove a comment in the 2nd report that he carried over from the first report.

Does anyone know what that comment was?

I'm pretty sure that the comment was regarding his rationale for excluding the separate buildable lot as excess land.

 

[Surf Cat]

Agree, but this is why the "complexity" needs to be discovered and priced accordingly. Not an afterthought.

Not if it's from an AMC..... where you have to bid low to get to go. Then you open up the Cracker Jack box and find out what your prize is.

 

[Carnivore]

A lot^ of lenders don't like to put a 1st mortgage on a house & lot that has a 2nd buildable . From what I understand is that it would in case of foreclosure take a long time to sell and for them to split the two would take way to long to sell the vacant lot , makes sense to me

 

[Mike Ault]

A lot^ of lenders don't like to put a 1st mortgage on a house & lot that has a 2nd buildable . From what I understand is that it would in case of foreclosure take a long time to sell and for them to split the two would take way to long to sell the vacant lot , makes sense to me

It screws things up on many levels. I once did a HUD REO appraisal on a property where the driveway to the side entry garage was on the adjoining parcel which they forgot to repossess. I thought that was kind of humorous at the time.

 

[George Hatch]

A lot of lenders won't lend on land at all, and if they do then the prevailing LTVs are a lot lower than apply to conventional SFR loans.

All RE is local, but in general
Nobody wants to do a 90% LTV loan on land. And there is usually zero overlap between the typical buyers for an existing SFR vs the typical buyers for land.

 

[Surf Cat]

A lot of lenders won't lend on land at all, and if they do then the prevailing LTVs are a lot lower than apply to conventional SFR loans.

All RE is local, but in general
Nobody wants to do a 90% LTV loan on land. And there is usually zero overlap between the typical buyers for an existing SFR vs the typical buyers for land.

Hmmmm....possibly the reason for the request for removal of commentary regarding the excess land and rectified purchase contract without the adjoining lot...