Second Lot on VA Purchase

[Zoe]

NO HC, you are making things up now -

fwiw I doubt 20 lots would ever be the subject of a residential loan or show the HBU either - stop changing the discussion it is for either one, or a very limited number of excess lots.

Yes, but H&B use dictates on MV opinion. Don 't make it complicated. Read the definitions. You are certifying to them

 

[Zoe]

Let me throw a curve. Assume I have a lot worth twice as much as my improved site with a house and they are adjoining? What is H&B use for MV opinion?

 

[Zoe]

hypothetical condition is only way to appraise them as a whole with MV opinion. That's it.. No other way to appraise them as a whole.

 

[Zoe]

East Memphis tears houses down that I like (nice houses). Highest and best use is new construction single family mostly. If I was writing report, I would go deeper. You get my drift?

 

[Basically Rectangular]

If you check the NO box for HBU, then you CAN NOT include the value of the two additional parcels - checking the NO box HBU means in your opinion , the subject conveys without those two parcels

I'm thinking the HBU box should be "Yes", as the primary parcel, which is the address of the subject which is identified in the engagement letter and purchase contract, has a HBU which is its current use.
However, there are a total of five parcels, each with separate tax ID numbers. All of these parcels are to convey in the purchase. Two of these parcels are vacant and are not needed to support the HBU of the subject; they are vacant and cleared, with readily available utilities, and zoning permits SFR. Clearly this is an example of excess land.

I am thinking that I should not include the excess land in my opinion of value, and I am trying to confirm if this is indeed correct.

 

[Lee Lansford]

I'm thinking the HBU box should be "Yes", as the primary parcel, which is the address of the subject which is identified in the engagement letter and purchase contract, has a HBU which is its current use.
However, there are a total of five parcels, each with separate tax ID numbers. All of these parcels are to convey in the purchase. Two of these parcels are vacant and are not needed to support the HBU of the subject; they are vacant and cleared, with readily available utilities, and zoning permits SFR. Clearly this is an example of excess land.

I am thinking that I should not include the excess land in my opinion of value, and I am trying to confirm if this is indeed correct.

If the 2 vacant parcels are already separate (except for a current mortgage) and they have their own H&BU apart from the improved parcel (and, certainly the 2 vacant parcels are not necessary to support the improved parcel, the 2 are neither surplus or excess to the improved parcel. They are 'merely' different properties from the improved property. Just sayin'.

 

[J Grant]

I'm thinking the HBU box should be "Yes", as the primary parcel, which is the address of the subject which is identified in the engagement letter and purchase contract, has a HBU which is its current use.
However, there are a total of five parcels, each with separate tax ID numbers. All of these parcels are to convey in the purchase. Two of these parcels are vacant and are not needed to support the HBU of the subject; they are vacant and cleared, with readily available utilities, and zoning permits SFR. Clearly this is an example of excess land.

I am thinking that I should not include the excess land in my opinion of value, and I am trying to confirm if this is indeed correct.

This is where the confusion about these types of assignments start. Let's break it down:

Your subject sale contract and thus the property client engaged you to appraise is the subject house AND the 2 vacant parcels as an assemblage.

We agree the two vacant parcels can have their own separate HBU - which may or may not be the same $ amount if they are sold together with the subject dwelling. While we need to do an analysis of the HBU of the excess lots, the assignment is NOT to appraise the excess lots as stand alone lots . The assignment is appraise them TOGHETHER with the subject (on its primary site ) The assignment is not to appraise the subject just on its primary site, since the SC is sell it with the excess lots.

As part of analysis we might develop aa value estimate of the lots if sold alone and their contributory value if sold assembled with the subject dwelling . If they are worth more alone, the assemblage diminishes the value of the lots, but the WHOLE assemblage can still have a HBU as improved ( the way I see it )- with an interim use for the vacant lots to hold as an investment or keep for large site use .

However, IF the house contributes so little to the assemblage that your opinion is tear down the house, then the HBU as improved is NO .

 

[J Grant]

I'm thinking the HBU box should be "Yes", as the primary parcel, which is the address of the subject which is identified in the engagement letter and purchase contract, has a HBU which is its current use.
However, there are a total of five parcels, each with separate tax ID numbers. All of these parcels are to convey in the purchase. Two of these parcels are vacant and are not needed to support the HBU of the subject; they are vacant and cleared, with readily available utilities, and zoning permits SFR. Clearly this is an example of excess land.

I am thinking that I should not include the excess land in my opinion of value, and I am trying to confirm if this is indeed correct.

I'm thinking the HBU box should be "Yes", as the primary parcel
The problem with that is....if you believe the HBU is for the subject on its primary parcel and exclude the excess parcels, the you would need to answer NO to the HBU question on page one, because the page one question is as improved yes or no, for for the property being conveyed in the sale ( property being conveyed is the total assemblage )

 

[Basically Rectangular]

This is where the confusion about these types of assignments start. Let's break it down:

Your subject sale contract and thus the property client engaged you to appraise is the subject house AND the 2 vacant parcels as an assemblage.

We agree the two vacant parcels can have their own separate HBU - which may or may not be the same $ amount if they are sold together with the subject dwelling. While we need to do an analysis of the HBU of the excess lots, the assignment is NOT to appraise the excess lots as stand alone lots . The assignment is appraise them TOGHETHER with the subject (on its primary site ) The assignment is not to appraise the subject just on its primary site, since the SC is sell it with the excess lots.

As part of analysis we might develop aa value estimate of the lots if sold alone and their contributory value if sold assembled with the subject dwelling . If they are worth more alone, the assemblage diminishes the value of the lots, but the WHOLE assemblage can still have a HBU as improved ( the way I see it )- with an interim use for the vacant lots to hold as an investment or keep for large site use .

However, IF the house contributes so little to the assemblage that your opinion is tear down the house, then the HBU as improved is NO .

Definition of the problem.

Subject sale contract and engagement only specified one parcel, lets call this parcel "A". The county GIS site shows the dwelling's improvements straddle parcel A and parcel B, (which has a separate tax ID number). Not a big deal at this point, typical for this part of town since these parcels are small and most homes straddle two parcels.
At the inspection the seller tells me about three other parcels which are going to convey as well, parcels C, D & E.
I go back into tax records and identify each parcel by owner name and tax ID. I can see that A, B & C contribute to the improvements. D & E are literally a vacant lot adjacent to A & B screaming "Build a house here"... (don't worry about C, it is not located along the street and is to the rear of A & B).

So the question is excess or surplus, or neither as leelansford pointed out. I have ruled out surplus. Parcels D & E don't actually need to be split off, they can be sold as is. To build would require vacating the lot line between parcels D & E, $50 application fee and a survey.

Now, they might be separate parcels and therefore not excess, however that is going to look strange as even parcels A, B & C are separate parcels. What do you want, this is old town USA? I spoke with a kind woman at a local title company to make heads & tails of the situation and she told me that her property (same county) is a quarter of an acre and is seven parcels (with seven tax ID numbers).

So I'm leaning towards excess, HBU analysis, and lots of explaining. The client suggests I include the value for lots D & E as a line item and go across the board with it in the grid, but I'm not sure about that.

 

[J Grant]

Definition of the problem.

Subject sale contract and engagement only specified one parcel, lets call this parcel "A". The county GIS site shows the dwelling's improvements straddle parcel A and parcel B, (which has a separate tax ID number). Not a big deal at this point, typical for this part of town since these parcels are small and most homes straddle two parcels.
At the inspection the seller tells me about three other parcels which are going to convey as well, parcels C, D & E.

Your particular case gets more and more confusing. Your subject contract MUST include all the lots on it , if you are supposed to appraise those lots with house as one legal conveyed package.

With so many stray parcels added, the HBU may or may not be as improved. It sounds like the site to the rear may not have road access or be buildable ? So that can make it surplus land. If each of the parcels are buildable, so many parcels included might tip it to value of the lots far outweighs what subject dwelling contributes or makes sense as assemblage - or it that may be okay if the lots are low value or low demand to build and the house is big /high value so that a large site may suit it as an assemblage.

Most of these assignments are for one adjacent lot - yours is adding 3 or more? Perhaps give assignment back because multiple lots makes it more complex . If your competence for it is such as you have to keep asking here - -I've given assignments back when I feel the competence level for it is beyond where I feel comfortable.