Second Lot on VA Purchase

[Zoe]

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 .

Okay, then you need hypothetical condition and disclosure of assignment conditions in order to appraise as a whole. If your client don't like that? I don't care. That's only way I am doing it.

You J are responsible for H&B use and value definition and SOW. If you explain to client they will understand. Do you have a problem communicating with your client(s}?

 

[J Grant]

Okay, then you need hypothetical condition and disclosure of assignment conditions in order to appraise as a whole. If your client don't like that? I don't care. That's only way I am doing it.

You J are responsible for H&B use and value definition and SOW.

Fine, give any advice you want but for res mortgage lending they will not accept a HC so it makes the assignment moot for those purpose. We all are aware of responsible for HB value definition and SOW,

 

[Zoe]

Fine, give any advice you want but for res mortgage lending they will not accept a HC so it makes the assignment moot for those purpose. We all are aware of responsible for HB value definition and SOW,

Okay, who is they? I know lenders that accept them frequently. J, the key there is letting your client know the situation and they will let you know how to proceed. They will pay you for your time if they cancel in my experience.

 

[J Grant]

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'.

This post makes no sense - what legal category of land/lots does "merely different" exist in ?

Whether they are combined in an assemblage with a dwelling or not, if the lots are legally able to be separated /sold they remain as excess land/ excess lots. They do not become surplus land unless improvements are built that straddle the lots , improvement such that no longer financially feasible to sever the lots .

 

[J Grant]

Okay, who is they? I know lenders that accept them frequently.

Fine, good for you, but for URAR forms, which is the big bulk of lending work we can not add a HC out of nowhere, the HC used are only those on the checkbox of form .

And even if a lender/client accepts an HC, it has to make sense and not be misleading -

 

[Zoe]

Okay, who is they? I know lenders that accept them frequently. J, the key there is letting your client know the situation and they will let you know how to proceed. They will pay you for your time if they cancel in my experience. H&B use and market value definition is where you have to explain to clients. Assignment conditions too. I can appraise a property with a hypothetical condition there are no improvements for client if they want that. That is an assignment condition.

 

[Lee Lansford]

Assembling a group of properties, each having a H&BU separate each from the others, and offering a single opinion of 'value' for all lumped together can certainly be done: We call such an opinion Bulk Value.

 

[J Grant]

Assembling a group of properties, each having a H&BU separate each from the others, and offering a single opinion of 'value' for all lumped together can certainly be done: We call such an opinion Bulk Value.

Indeed, assembling and appraising as one can be done - , I said that from my first post in that prior old thread when some kept insisting it "had" to be separate appraisals

But we are appraising for market value, we can't just insert another value name, such as "bulk value" (unless "bulk value " is the definition of value used in appraisal )

Properties conveyed as one "bulk" package - the package may have a MV opinion less than, greater than or lower than the value of any of the properties old separately but it is still MV for the whole -if MV is purpose of assignment ).

 

[Lee Lansford]

This post makes no sense - what legal category of land/lots does "merely different" exist in ?

Whether they are combined in an assemblage with a dwelling or not, if the lots are legally able to be separated /sold they remain as excess land/ excess lots. They do not become surplus land unless improvements are built that straddle the lots , improvement such that no longer financially feasible to sever the lots .

Give it some thought.

[edit to add...} The OP has told us that there are 2 vacant parcels each having their own H&BU. These are neither surplus nor excess to the improved parcel; these are "merely" separate properties.

 

[J Grant]

Give it some thought.

[edit to add...} The OP has told us that there are 2 vacant parcels each having their own H&BU. These are neither surplus nor excess to the improved parcel; these are "merely" separate properties.

I think that is terrible advice. Peer practice and appraisal definitions and legal categories reference a lot be classified as surplus or excess. How that is valued separate or combined is an assignment problem but does not change what physically and legally exists.

IDK what competent reviewer would accept "merely separate " parcels....without stating /analyzing them to be either excess or surplus.