Multiple properties purchase on single contract

[Fargo1]

I just received an appraisal request for a single family home. However, when reviewing the contract, it appears the buyer (an LLC) is purchasing 3 properties with a single contract. The price paid for each property is not listed. It appears to be a bulk sale for one lump sum. How do you handle this? Will this create a misleading report since the indicated purchase price is $804,000 but the property I am appraising will likely be approximately 1/3 of that price. Will FNMA even accept an appraisal of 3 properties with one contract?

 

[TerryRohrer]

Shouldn't be a problem. Just relay the facts you have above and move one. There is really no way you can parse anything meaningful from the contract, so just give em the facts and be done.

 

[RCA]

You have to appraise each property separately. The some of the values should ideally be equal to the contract price.

What is the tax assessor going to do? I understand the property tax rate in Montana is 0.83%.

 

[J Grant]

I just received an appraisal request for a single family home. However, when reviewing the contract, it appears the buyer (an LLC) is purchasing 3 properties with a single contract. The price paid for each property is not listed. It appears to be a bulk sale for one lump sum. How do you handle this? Will this create a misleading report since the indicated purchase price is $804,000 but the property I am appraising will likely be approximately 1/3 of that price. Will FNMA even accept an appraisal of 3 properties with one contract?

What is your assignment for - to appraise one of these homes as a single house on its own lot, or appraise all three houses as a bulk purchase?

I doubt fannie loans on 3 houses as a bulk sale , but that is something you can clarify with the client. The important thing for you is to figure out with the client exactly what you are appraising and then any relationship it has with the contract can be analyzed.

 

[Fargo1]

What is your assignment for - to appraise one of these homes as a single house on its own lot, or appraise all three houses as a bulk purchase?

I doubt fannie loans on 3 houses as a bulk sale , but that is something you can clarify with the client. The important thing for you is to figure out with the client exactly what you are appraising and then any relationship it has with the contract can be analyzed.

Thanks, those are excelent questions. That is a tremendous help. The assignment request only indicated it was for one of the 3 properties. But you're right that I need to recieve more clarity from the lender to ensure that they indeed only want me to appraise the one property.

Your comment about Fannie returns to the question if Fannie would even purchase the loan if all 3 sales are listed on the same contract. It wouldn't really matter if I was appraising all 3 or just one. EItherway it would be 3 separate appraisals, but its still one contract. Is that one loan or 3 loans? Does Fannie base its purchase decision based on the properties listed in the sales contract, in the appraisal or how the loan is written. I assume its based on the loan. But could a lender make individual loans on 3 different properties with 3 different appraisals if they are all on one PA? I think I need to contact my lender and get more info. Thank you.

 

[andrew81]

Forget about the contract. Just review it, report your findings, and move on.

 

[Terrel L. Shields]

You simply state that the property is part of a three property purchase and the purchase price is an unknown portion of the sale price. State if there are any contingencies related to the value of the subject and go on.

 

[J Grant]

Thanks, those are excelent questions. That is a tremendous help. The assignment request only indicated it was for one of the 3 properties. But you're right that I need to recieve more clarity from the lender to ensure that they indeed only want me to appraise the one property.

Your comment about Fannie returns to the question if Fannie would even purchase the loan if all 3 sales are listed on the same contract. It wouldn't really matter if I was appraising all 3 or just one. EItherway it would be 3 separate appraisals, but its still one contract. Is that one loan or 3 loans? Does Fannie base its purchase decision based on the properties listed in the sales contract, in the appraisal or how the loan is written. I assume its based on the loan. But could a lender make individual loans on 3 different properties with 3 different appraisals if they are all on one PA? I think I need to contact my lender and get more info. Thank you.

I am not on the lender side so can not answer any of the above, it would pay to clarify the assignment with your client, wrt it is only for the single property , even though there is a sale contract indicating it will be sold as a package with 2 other properties.

 

[sputnam]

You are the appraiser. You analyze and summarize what you find in the sales contract. You don't care whether Fannie or Freddie or HUD or the Lender makes the loan or not. In this case, you will include in your comments that the sales contract provided was for three properties including the subject.

 

[Vermonter]

EItherway it would be 3 separate appraisals, but its still one contract.

I've seen this before with estate purchases. Sometimes they will ask to appraise only one property, sometimes multiples, but they are all separate reports. Note the contract is for more than one property and move on. Altho I would get clarification from the client if you're not sure.