Prior Sales History/new Construction

[heidi m sowards]

I just got off the phone with a review appraiser. She said that 95% of the appraisers do this differently than I do. My sales history comments: Cowlitz County records indicate that there has been no sale or listing of the subject property over the prior three years. The subject site with the two outbuildings, private well, septic and power was purchased on 04/28/2015 for $122,500. She was adamant that the site sale was the same as a sale of the subject property. I tried to explain that I'm appraising the subject property which is defined as the site and its proposed site improvements, of which there has been no listing or sale and that I did disclose the site sale but it is not the same thing. I would not change it for her and have added the following statement: (The subject property appraised is defined as the site and its proposed site improvements. There has been no listing or sale of the subject property as defined over the prior three years.) It seems obvious to me that an appraisal on a property as proposed construction at almost $400K is not the same property as the site and utilities that sold for $122K a few months back. I can understand asking me to disclose the site sale if I had not done it, but it was in the report! Or am I in the 5% that is incorrect?

 

[Tim The Enchanter]

04/28/2015 for $122,500.

I would say subject previously sold as stated, as vacant land.
Now it's worth more because duh, there is a new house there.

I could argue it's the same property, but it's been improved.
Sounds like their line of thought.

 

[Terrel L. Shields]

I believe directives have been sent down, possibly in the USPAP Q & A's. Yes, the sale of the vacant lot is a "prior" sale. Therefore, there was a sale.

 

[Amy Perkins]

I disclose it is land in the comments, but it is still the same property; so you need to disclose it.

 

[Michigan CG]

The reviewer is correct.

 

[normando]

Before this 3 year prior history thing, if I find it relevant I would state it. It was common sense for me without these new regulations. Now it's crazy because they want every deed recording discussed which may or may not be relevant to value. Because of this 3 year thing, I only check and described within 3 years. Any thing older, I'm not obligated to type in report. Before I felt obligated to go back more than 3 years because reader may find it relevant. Now I just do what is needed. It's that simple. Same thing with comps. Just one year. Makes it easy for every appraiser to understand especially does who are starting out.

 

[Rich Heyn]

I just got off the phone with a review appraiser. She said that 95% of the appraisers do this differently than I do. My sales history comments: Cowlitz County records indicate that there has been no sale or listing of the subject property over the prior three years. The subject site with the two outbuildings, private well, septic and power was purchased on 04/28/2015 for $122,500. She was adamant that the site sale was the same as a sale of the subject property. I tried to explain that I'm appraising the subject property which is defined as the site and its proposed site improvements, of which there has been no listing or sale and that I did disclose the site sale but it is not the same thing. I would not change it for her and have added the following statement: (The subject property appraised is defined as the site and its proposed site improvements. There has been no listing or sale of the subject property as defined over the prior three years.) It seems obvious to me that an appraisal on a property as proposed construction at almost $400K is not the same property as the site and utilities that sold for $122K a few months back. I can understand asking me to disclose the site sale if I had not done it, but it was in the report! Or am I in the 5% that is incorrect?

I've had discussions with former ASB members and USPAP instructors regarding this issue. You can find support on either side, although your point of view is, I believe, in the minority. There is also the issue of FAQ 225. More importantly, the majority of state regulators, reviewers, etc. will likely line up with FAQ 225. Consider taking the path of least resistance by reporting and describing the prior sale.

 

[Tim Hicks (Texas)]

"Analysis of any prior sale or transfer history.." The lot purchase is a transfer history and a prior sale of the property. If you use your logic, if they bought the entire property and then a year later did a proposed construction of a barn, pool, etc. then you could claim there is no prior sale because of the new proposed property which is incorrect. Does that make sense?

 

[HF Mudd]

Was the legal description the same in the prior sale? If so, then I would say that the prior sale of the subject site is a prior sale of the subject of your assignment.

Improvements can come and go, and can have a positive or a negative contribution to the value of the real property depending upon market conditions which can change over time.

 

[Mr Rex]

We appraise Real Estate. There was a prior sale of the Real Estate. Report the prior sale of the Real Estate.