Rural/semi rural?

[David Beasley]

I read a definition of "rural" a few years ago, I want to say it was in some AI literature. It said that anything that was "more than an hour away from a significant metro" was rural. Anything within that same hour was suburban...and of course urban speaks for itself.

Makes perfect sense around here. You can be in the middle of a 100 acre farm here, and still be less than 45 minutes from downtown Raleigh (and also probably less than 45 minutes to Fayetteville too).

I guess ultimately, it depends on the amount of "urban sprawl" you have around the area in question. It's terrible around here. IMHO, it is urban sprawl that creates a lot of the rural/suburban confusion.

 

[Mztk1]

I think what creates the rural/suburban confusion is that a lot of secondary lenders will not loan on rural, or will charge higher interest rates, so definitions by secondary standards, etc., are vague leaving it up to the appraiser. Those who never check 'Rural' or who develop a definition so limiting that it cannot be applied to any property (such as that one hour distance thing - 3 hours if you are in the west because, heck, 3 hours out west means "just down the road a piece") - have the advantage of pleasing the secondary market and getting positive feed back.

Rural to me is rural. They work the land for cash, there are tractors, you need a car to get ANYWHERE (and sometimes use it to drive across the yard), you operate off well & septic, and much of the land around you is dedicated to farming...that's rural.

But all these definitions are shady. Even "Urban", which Dave says "speaks for inself" is going to be subjective because there are no objective definitions available. Ex) Urban: "Relates to a city". Well, Plant City near me, the strawberry capital of the world, is an incorporated "city" built mostly on agriculture. The strawberry festival with all the country music stars is there in about a week or two. I'd never call any one single place within its boundaries "urban". That would be just plain ridiculous to think of urban living as the ole fat guy wearing overalls, no shirt, and a straw hat buying an ice cream soda on a lazy afternoon at the Whistle Stop Cafe, as being an "Urban-Dweller".

 

[Webbed Feet]

I have a property that sits on 8 acres-- the home is 20 years old a custom building colonial 5 bedroom 4 bath--6 car garage -- The market area is open and filled with estate homes, regular older homes, a few horse farms, a few argi farms and is less than 10 miles from the county seat (a large employment, entertainment, shopping area) Average sites are between 1-4 acres....

How would one define this area--choices on the 1004 suburban, rural ,urban--I choose suburban...Due to the unqiue features of the homes size and sites I expanded proximity outside one mile to locate comparbables with some features that bracket this property---Lender has requested additional comps within one mile and same style home--this is not possible--What you you do--

oh one more thing--I used on 4 acres to support the value and considered the 6 car garage as an over improvement used three and gave contributary value for the others and tried to bracket with age, size, neighborhood appeal...Not cookie cutter... lots of variables with comps selected...but they are what they are the best available--thoughts...

Ms. Ridgley?

Here is where I get myself in trouble for not just answering the question asked. But I don't see at all where the question is the issue! You're not saying the UWer stipped anything at all to do with the classification of the neighborhood area. So why the suburban versus rural debate?

What I do see is if this was for a secondary market mortgage reported on a 03/2005 form... you have a really big fat issue of a problem if that second sentence I bolded means what I think it means. Not to mention a needed analysis of part of one single parcel being leased out to a third party.

And honestly, I'd love to see how you artificially split a building in half for comparison purposes to garage improvements that you considered not over-improvements. Unfortunately, this just sounds like a silly gross and net percentage adjustment manuver versus a clearly proven adjustment for a 6 car capacity outbuilding. Either the outbuilding is, in it's entirety, an over-improvement or it is not. You can't have just part of it an over-improvement that way. As a reviewer I'd much rather you compare a comps three garages to none for the subject, and then provide your proven market adustment for the 6 car outbuilding on a separate row of the grid. Versus a confusing, and probably unproven, reduced separate adjustment for the three bays that are really part of the building. If you provided a cost approach, there is no way you can justify the inconsistancies between the two approaches by dividing the value like that in the Sales Comparison, and then costing it out all as one building in the Cost Approach. Maybe I don't understand. Perhaps it is a 6 car attached garage, designed for the house, versus a 6 car outbuilding that was designed in part for a storage building on a acreage site. If I jumped to a conclusion, scratch the above!

Webbed.

 

[Ted Martin]

If they leased out one of the bedrooms would it have been a 4 bedroom home. Basically the same thing as appraising 4 of the 8 acres because they lease the back 4 acres.

 

[cridgely01]

At some point excess land is excess land as it relates to the improved site, the excess land in this case is not needed to serve or support the existing improvement ; which is what I considered the side 4 acres. It not used by the homeowners for any specific purpose of than the owner found someone who wanted to grow hay in spring and summer. There are no working farms in the immedate vacinity of the subject. One neighboring house has 2 horses ; but thats it. Majority of all properties in the area are on well/spetic including newer construction suburban style macmasion developments with 2-4 area sites..

And as for the garage, the additional 3 car garage is attached to the original three car garage and although it is attached to the other garage its clear to see when it begin in ends . Most homes inn the area have two and three car garages and this is over the top. It is considered and overimprovement and I was treating it as such... there is also an 25x38 steel building across from the attached garages which serves as a LARGE shed.. this house it just gets better and better with each of its unique features...If I had more lines on the report I would be able to detail all the differences but that not possible...

I suppose the whole original concern was rural or suburban?:laugh: and not urban .. thanks for you comments, they are appreciated..

 

[Mr Rex]

Cridgely, can you regurgiate where you got the idea that valuing 4 and giving contributory value for the rest is acceptable appraisal practice and methodology? Please state the sources with footnotes if necessary. BTW, was this done on a "form" report?

 

[Mztk1]

Cridgely, can you regurgiate where you got the idea that valuing 4 and giving contributory value for the rest is acceptable appraisal practice and methodology? Please state the sources with footnotes if necessary. BTW, was this done on a "form" report?

http://www.nhnaifa.com/resources/5acre.pdf

 

[Mztk1]

At some point excess land is excess land as it relates to the improved site, the excess land in this case is not needed to serve or support the existing improvement ; which is what I considered the side 4 acres. It not used by the homeowners for any specific purpose of than the owner found someone who wanted to grow hay in spring and summer. There are no working farms in the immedate vacinity of the subject. One neighboring house has 2 horses ; but thats it. Majority of all properties in the area are on well/spetic including newer construction suburban style macmasion developments with 2-4 area sites..

And as for the garage, the additional 3 car garage is attached to the original three car garage and although it is attached to the other garage its clear to see when it begin in ends . Most homes inn the area have two and three car garages and this is over the top. It is considered and overimprovement and I was treating it as such... there is also an 25x38 steel building across from the attached garages which serves as a LARGE shed.. this house it just gets better and better with each of its unique features...If I had more lines on the report I would be able to detail all the differences but that not possible...

I suppose the whole original concern was rural or suburban?:laugh: and not urban .. thanks for you comments, they are appreciated..

There is no doubt that you know your market better than the rest of us. If you feel it is suburban, than it must be. Generally most underwriters will have a rule of thumb that suburban properties should have comps within 1 mile, but sometimes 2 miles; a semi-rural can be up to 5 miles, even 10 in a stretch; and the rurals go 10 miles and farther. So, I suppose the concern is that if this is suburban than your comps should be closer. Just provide a good explanation as to why there are none, and you should be fine.

 

[Marcia Langley]

If I had more lines on the report I would be able to detail all the differences but that not possible...

You are never restricted by the number of lines in the report. There is unlimited addenda space for all of your detailed analysis.

 

[Mr Rex]

Question #2:
A local lender has asked me to appraise only a 5-acre portion of a 62-acre parcel, stating that Fannie Mae will lend on no more than 5 acres. Am I permitted to comply with this request?
Response:
Standards Rule 1-2(e)(v) states that the subject of an assignment may be a physical segment of a property. However, appraisers must also comply with any supplemental standards that might apply (see SUPPLEMENTAL STANDARDS RULE).
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.