• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Need Exact Quote

Status
Not open for further replies.

Rice Brewer

Thread Starter
Member
Joined
Dec 14, 2004
Professional Status
Certified Residential Appraiser
State
Arkansas
Our old friend, the "5 acre rule" is back.

I need the exact quote from the selling guide regarding this issue. Somebody posted it here a while ago but I can't find it to save my life.

Thank you.
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
Here's Freddie Mac's verbiage from their selling guide. 44.15: Property description and analysis (06/22/07) paragraph (d) 4th bulleted item.

Excess acreage

The appraiser must appraise the entire site for residential use, regardless of the amount of acreage. The site description must accurately describe the entire site and any improvements to include any outbuildings. The comparable sales should have similar acreage. When differences in acreage exist between the subject property and the comparable sales, any adjustments or lack of adjustments made to the comparable sales for significant differences must be explained in the comments area or on an attached addendum, and the appraiser must explain the effect these differences have on the subject property's value or marketability.
 

Rice Brewer

Thread Starter
Member
Joined
Dec 14, 2004
Professional Status
Certified Residential Appraiser
State
Arkansas
Thank you, Greg!
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
If the assignment requires compliance with supplemental standards published by Fannie
Mae, the appraiser must be aware of the current policy. As stated on page 35 of the​
Fannie Mae Handbook for Appraisers:

Some appraisers report that they have been asked to appraise only a portion of a larger
site: for example, the borrower owns a 30-acre site and you are asked to appraise only
five acres and the property improvements. Fannie Mae considers this an unacceptable
appraisal practice
Failure to recognize this supplemental standard would be a violation of the​
ETHICS
RULE
or COMPETENCY RULE.

From: “USPAP – Frequently Asked Questions 2005”​
By: The Appraisal Foundation, Washington, D.C.
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
Now that the topic quesstion has been answered let's discuss.

Why do you think Fannie and Freddie made this a matter of policy?
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
I imagine some sharp attorney gave them the keys to 5 acres of the biggest POS portion of a larger site (several times), while Joe Homeowner(s) kept his house and the rest of the acreage.
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
Or perhaps 5 acre properties were common and sold in a manner of days while 20 or 30 acre properties were dogs on the market.
 
H

Hall McClenahan

Guest
I would think it has to do with having deep pockets and the increased risk of law suits due to contaminations, or debris common with large un-zoned or monitored areas.
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
I suspect that most courts would find that encumbering 30 acres while acknowledging value for only 5 would amount to usury or something along those lines.
 
Last edited:

Rice Brewer

Thread Starter
Member
Joined
Dec 14, 2004
Professional Status
Certified Residential Appraiser
State
Arkansas
Those are the exact quotes I was looking for. Don't know why I couldn't find it. It has been a LONG week...

Thank you both.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks