• 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.

Part of land sold before finishing appraisal.

Status
Not open for further replies.

Robert Muir

Sophomore Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Utah
When I conducted the inspection of 260 acres of vacant land, parts of it were listed for sale. Since the time of the inspection the owner has sold the back 40 acres, but the appraisal has not been completed yet. The question is: do I go back and change the acreage to match the current acreage or do I continue with what was the acreage at the date of the inspection and comment that part of it was listed for sale. The 40 acres that sold would make a tempting comparable, but it was not sold as of the date of the inspection. I would think that if I did the 260 acres, it would be misleading the readers of the report that there still is that much acreage, but the order was for the full 260 acres at the time of the request and of the inspection. The sale of the 40 acres does provide me with a good indicator of value for land in this area, at least for hindsight or would that be foresight on this part. This also might go to court because there are lawyers involved!!!

The extended timeframe is from the owners’ part of delaying payment. This is a business partnership that is breaking up and I require all divorce appraisals to be paid up front, whether it be from business partners, corporations, or married couples. The check was supposed to be there the day of the inspection; it took 2.5 months to get it, now they want the appraisal yesterday.

Robert
 

xmrdfghap

Senior Member
Joined
Jan 15, 2002
Professional Status
General Public
State
Florida
<span style='color:brown'>It may just be me, but I ALWAYS appraise as of the date of inspection, OR, with written instructions, as of some date in the past. I would complete the assignment as ordered and paid for. Then, should they want a NEW appraisal on a separate property (the legal description is different now, isn't it?) I wold be happy to provide them with one......assuming you get paid first.

If they want to cancel the first one, I would refund a portion of the money paid....not all, as you have expenses and time invested in that report......it just has not been written yet. But it appears they want the report as originally ordered and inspected......at least what I assume you mean when you say "now they want the appraisal yesterday" is that they want the one they ordered.</span>
 

David S. Roberson

Senior Member
Gold Supporting Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
Go with what you've got as of the date of inspection. That's what was there at that time.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Disclosure, disclosure, disclosure. You know it was listed, cite the listing prices and site sizes. You know one parcel sold after inspection, cite it in the report. As part of the site analysis, be sure to cite that the property was listed and cite the site size as of the date of inspection and then state that the 40 acres has been sold, reducing the actual site to X acres. Put a disclosure in your report that the site size requested is no longer the actual site size. Also, you might as well report the land sale in the report as the actual time of sale is probably the closest to the date of inspection. The market hasn't changed in the few days since inspection. After all, if it supports where you are at on value, so be it. The client wants information as to the subject's value. To not disclose ALL known information just because something occurred after the date of inspection may create a situation where a value estimate is not a true representation of the subject.

Prime example: You appraise a house on Tuesday, it burns on Thursday. While I would appraise it as it was on Tuesday, I would disclose in the additional comments section that the subject has burned.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
As part of the site analysis, be sure to cite that the property was listed and cite the site size as of the date of inspection and then state that the 40 acres has been sold, reducing the actual site to X acres. Put a disclosure in your report that the site size requested is no longer the actual site size.
I would also add that the sum of the parts is not necessarily the value of the whole...

in other words warn the reader not to subtract the sale price from your appraised value to get the value of the remainder....

Not that they try to DO that or anything :roll: :wink:
 
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