Lender Requesting Commentary to be removed

[George Hatch]

On the SFR side of the business I've seen a number of the 2-parcel combos sell in the past and its as common as not for them to convey in separate transactions with either an all-cash for the lot or a separate loan - sometimes with a different lender.

That's why I always do a separate land valuation for the additional lot whether the lender requests it or not. They may not have use for it later on, but if they do then they already have what they need in hand. They might want to subordinate or release the additional lot later on so having an idea of the value at the time of the original sale might become a bit of useful info.

 

[Mark K]

That's why I always do a separate land valuation for the additional lot whether the lender requests it or not.

Same here. Trying to sneak in an additional, buildable, platted lot into an SFR appraisal by calling it excess land is misleading.

IMO, excess land is the unnecessary part of the original parcel that can reasonably be split and sold off from the dwelling parcel. My brother just did it. House with 2.5 ac. and a lot of road frontage. Home located at one end of the lot. The balance was excess until he split the lot, had it platted, and sold the second lot separately. After he split it into a second parcel, it was no longer excess, it was its own entity.

 

[Surf Cat]

Trying to sneak in an additional, buildable, platted lot into an SFR appraisal by calling it excess land is misleading.

IMO, excess land is the unnecessary part of the original parcel that can reasonably be split and sold off from the dwelling parcel.

But the original purchase agreement had the excess lot included along with the lot with the improvements in the purchase contract.

How would you conduct the assignment?

Just ignore the excess lot like the op did and not include it in your valuation even though it's included the purchase contract? ( this is an assumption BTW, the OP didn't elaborate. The OP's original post is in Dublin's post #3).

Not being snarky, just curious as to what my peers would do.

 

[Mark K]

But the original purchase agreement had the excess lot included along with the lot with the improvements in the purchase contract.

How would you conduct the assignment?

Just ignore the excess lot like the op did and not include it in your valuation even though it's included the purchase contract? ( this is an assumption BTW, the OP didn't elaborate. The OP's original post is in Dublin's post #3).

Not being snarky, just curious as to what my peers would do.

I would contact the client and ask them how they want to proceed if I was aware upfront that it was going to be an issue. Most real estate brokers don't know the limitations re; F/F lending, hence the troublesome contracts, and more than likely, neither do the AMC overlords. If this is for a local, non-GSE lender, that's a different story. They are free to do a lot of things that F/F can't.

 

[J Grant]

But the original purchase agreement had the excess lot included along with the lot with the improvements in the purchase contract.

How would you conduct the assignment?

Just ignore the excess lot like the op did and not include it in your valuation even though it's included the purchase contract? ( this is an assumption BTW, the OP didn't elaborate. The OP's original post is in Dublin's post #3).

Not being snarky, just curious as to what my peers would do.

I have done several of these- if the assignment is to appraise a house on its primary lot along with the adjacent vacant lot ( excess land as a combo), then that is what the appraiser agrees to do- I appraised a package sale of a house and additional lot. The HBU, contributory value etc has been covered in other threads on the topic

The exception is an FHA assignment (or other client instruction) when the appraiser does not value the additional lot even though it will be conveyed with the subject in a purchase.