Second Lot on VA Purchase

[Zoe]

H&B use is on the appraiser on a MV opinion. Period. No exceptions.

 

[J Grant]

However, market value dictates H&B use and is tied to MV and is required. You see the issue, right? It can be disclosed that if the vacant lot H&B use is worth $1,million with DOM etc and house and separate lot is worth $200K. That's fine.

Right, but... market value HBU is for the SUBJECT PROPERTY, which in this case is a package or universe of two - a house along with adjacent excess lot. So the HBU is for THAT ( the package )

Sine the lot alone is not the subject to be appraised we do not need to provide an appraisal for it at its solo lot HBU. We should disclose and comment that the excess lot can have a different price/value if sold alone and can have a different HBU if sold alone, but the assignment condition is its value as a package sold with the subject house on the primary lot.

Fannie actually did come out with a guideline how to handle the contributory value of an access lot, that is to appraise it as a value in use - idk if I agree but it it is a workable solution. Value in use or interim value until such time (if ever )it is released from the package and sold on its own ( there was a contentious, prior marathon biblical length thread on topic a few months ago )

 

[Zoe]

Right, but... market value HBU is for the SUBJECT PROPERTY, which in this case is a package or universe of two - a house along with adjacent excess lot. So the HBU is for THAT ( the package )

Sine the lot alone is not the subject to be appraised we do not need to provide an appraisal for it at its solo lot HBU. We should disclose and comment that the excess lot can have a different price/value if sold alone and can have a different HBU if sold alone, but the assignment condition is its value as a package sold with the subject house on the primary lot.

Fannie actually did come out with a guideline how to handle the contributory value of an access lot, that is to appraise it as a value in use - idk if I agree but it it is a workable solution. Value in use or interim value until such time (if ever )it is released from the package and sold on its own ( there was a contentious, prior marathon biblical length thread on topic a few months ago )

I already told you if vacant lot was worth 1 million and house and lot was worth 200K,? MV opinion is unique. The OP will be fine if they are specific in H&B use analysis.

 

[J Grant]

They could have separate H&B uses. I don't think VA would care. I would call VA. MV opinion will care based on H&B use.

Yes, separate they can have sparte H & B uses

But the appraisal assignment is to appraise then TOGETHER, as one econoimic unit . So the HBU is for that , residential etc unless zoning is commercial/other, or if the subject dwelling is found to contribute so little to the two lots that HBU of the package is demolish the subject and sell both as vacant. But if subject dwelling contibrubes more than tearing it down, then HBU is "as exists" a dwelling of X on lot Y , sold along with adjacent lot Z for a package of one home on a primary lot and a second , adjacent lot that contributes value and has a HBU as a value in use as long as encumbered under the one mortgage.

 

[J Grant]

I already told you if vacant lot was worth 1 million and house and lot was worth 200K,? MV opinion is unique. The OP will be fine if they are specific in H&B use analysis.

Right, if the vacant lot ( and the underlying lot of subject ) are of such high value that the subject dwelling contributes so little, then the HBU of both lots would be vacant

 

[Lee Lansford]

it seems to me we just discussed this recently but i can't find the thread. working on a VA purchase in a Rural area on 1 acre lots. But the current owner had also bought the adjoining lot a few years before he bought the lot with the house. So now he is selling the house and it's lot and the completely unrelated vacant lot next door. The contract says it includes both parcel numbers.

i'm thinking the sale will require two appraisals - one for each separate parcel. but i don't know how VA will feel about that. Any thoughts from the experts out there??

I'm coming to the party late and have not read through all of the posts having stopped after the initial three or four, so I don't know what has been covered, BUT, for you to include the vacant parcel along with the the improved parcel (which, I understand doesn't need the vacant parcel) to form a single whole for one opinion of MV, you would have had to come to the conclusion that the H&BU of the vacant was for assemblage with the improved parcel as additional green space.

 

[Zoe]

Right, if the vacant lot ( and the underlying lot of subject ) are of such high value that the subject dwelling contributes so little, then the HBU of both lots would be vacant

H&B use analysis would determine which lot is worth more. See, one could be commercial H&B use and one residential. There could be countless differences between the lots that could make a difference in H&B use analysis.

 

[Zoe]

I'm coming to the party late and have not read through all of the posts having stopped after the initial three or four, so I don't know what has been covered, BUT, for you to include the vacant parcel along with the the improved parcel (which, I understand doesn't need the vacant parcel) to form a single whole for one opinion of MV, you would have had to come to the conclusion that the H&BU of the vacant was for assemblage with the improved parcel as additional green space.

Yes, and say that is H&B use specifically if that is the case.

 

[Zoe]

I would definitely talk to buyer and seller or their agent. They can help you on buyer/seller motivations. VA will tell you how they want it. Try to get a strong opinion on H&B use before you call VA.

 

[J Grant]

H&B use analysis would determine which lot is worth more. See, one could be commercial H&B use and one residential. There are countless differences between the lots that could make a difference in H&B use analysis.

I would assume zoning would be the same for the two lots if they are adjacent - the HBU as vacant would be same for either lot, but if the lot subject is on is grandfatherd in res zoning in a commercial area and the dwelling contributes more to the two lots than tear down then HBU for the assignment purpose is interim or existing - but commercial zoning would be pretty rare and if present perhaps a res license appraiser would decline the assignment.

Plain vanilla res zoning more likely the case, then it is are appraisers going to make this far more complex than needs to be - buyers are allowed to purchase a home along with a vacant lot and if lenders want to finance them, which apparently they do, appraisers, if comptent, can appraise them.

The confusion ( see marathon former thread lol ), confusion seems to be appraisers believe their assignment means appraise the vacant lot AND appraise the house and its site, and if the vacant lot can have an alternate HBU or be worth more sols separate OMG- down the rabbit hole they go. While one can, and might be due diligence to, develop an opinion of value for the escess lot, that is NOT the assignment. The assignment is develop an opinion of value for the two properties sold /conveyed as one package/assemblage ( and financed under one mortgage. ) Thus, the question becomes for HBU, as improved, does the dwelling contribute enough to the sites to be retained, aka an as is rather than demolish the dwelling and both sites /lots worth more as vacant.

In theory, if the same size, the lot of subject dwelling should be worth the same $ as vacant as the excess lot. But as a package, the contributory value of the excess lot might be less than if vacant. Which can be explained in the report as part of the analysis. That does not change the HBU of the whole property, which is the existing dwelling contributes to the sites, the second parcel does not become surplus land, it remains an excess lot parcel but serves a value in use while encumbered under one mortgage . ( value in use can be as , extra land for privacy or build amenities on or hold for investment purpose )