Second Lot on VA Purchase

[Zoe]

Will a gse purchase a loan where H&B use box checked no?

 

[Zoe]

If your assignment was to appraise the vacant lot as a stand alone lot, fine... It's HBU is sold separate.

But the vacant lot alone was NOT the subject of the assignment, was it? What was the property that was the subject of the assignment ?

Still not getting it. MVO would require separate analysis on exposure time, etc if sold together vs separate. And maximally productive opinion.

 

[Zoe]

"as if vacant" or "improved" on MVO

 

[J Grant]

Here is how I might, (writing for bb purposes ) summarize the HBU analysis and assignment condition:

" The subject of assignment for an opinion of market value is 32 Cherry Street, a 2000 sf dwelling on a 10,000 sf lot, together with adjacent lot address of 34 Cherry ST which is a lot of 10,000 sf. The total lot size of the two lots will be 20,000 sf. The vacant lot at 34 Cherry Street is excess land and can be sold sparely. It might have a different value if sold separately with a HBU as a buildable lot. However, the lot has been vacant for many years and the demand for vacant lots for builder apparently not strong enough to have produced a buyer for this lot. The HBU of the excess lot when encumbered under one mortgage with the subject dwelling Cherry Street is for assignment condition purpose is analyzed as a contributory value in use. Its value in use is to provide additional privacy and green area, with potential for expanding house or building amenities on it such as a pool or shed, or alternatively can be retained as a future investment. "

"The estimate of value for the lot of 32 Cherry Street is a range of $75,000 -$80,00 as a vacant site The value of 32 Cherry Street in the appraisal is estimated for its contributory value to the whole at $60,000 as long as it is conveyed together with subject dwelling. "

 

[J Grant]

Still not getting it. MVO would require separate analysis on exposure time, etc if sold together vs separate. And maximally productive opinion.

Where does USPAP require that for assemblage of properties sold as one single entity? Imo could be good diligent appraisal practice to provide it, but where is it a USPAP requirement?

I just took a USPAP update course and in fact one of the FAQ was assemblage of properties not be treated as the separate values added together for a whole. Thus, if the vacant excess land alone has a 80k VO and exposure time of 1 year, that is not true of its contributory value when sold along with the dwelling. The exposure time should be for the dwelling sold with the vacant lot (which might be longer than typical, because how many buyers want to purchase a house AND a vacant lot at same time ? Might depend on price of course, or desirability etc . And how common is it for area, and are large sites utilized etc.

 

[J Grant]

Will a gse purchase a loan where H&B use box checked no?

They probably would not, but why would you check H BU for a dwelling sold with a vacant lot as NO? What is the HBU then, tear down the house?

Once again, (for the zillionth time ), the HBU question on page one is existing use yes or no as improved, for the property being appraised, and the property being appraised is one house along with adjacent lot. An analysis of HBU as vacant of both lots is part of the steps to arrive at the HBU conclusion as improved .

 

[Zoe]

If your assignment was to appraise the vacant lot as a stand alone lot, fine... It's HBU is sold separate.

But the vacant lot alone was NOT the subject of the assignment, was it? What was the property that was the subject of the assignment ?

No. Not MVO. maximally productive is H&B use. If the property is worth less together than separate, can't do MVO without hypothetical condition.

 

[Zoe]

With hypothetical condition, the answer to H&B use would be no. Property could be worth more combined than separate.

I don't think GSE's will buy it with answer of "no" on question on page 1. I could be wrong.

 

[Zoe]

Think about legal descriptions too. Would need hypothetical condition. That's fine.

 

[Zoe]

If property worth more combined that separate, still would not be improved to it's H&B use.


Lee nailed it. He really did. He drove the nail so hard it ain't funny.