Shared Well

[Mike Boyd]

Typically, lenders will only loan on shared well properties IF the shared well is in control of the borrower.

There may be exceptions...but this is typical policy for many lenders.

How do you control a well? "Pump, dammit, pump."

That is why a well agreement and an easement is required. That would provide mutual control.

 

[Brad Ellis]

A shared well is a factor in marketability.

If there is a written agreement, it might be minor, but if not, it is a really big potential problem.

All one would have to do is to foreclose on the site without the well and see what the family member does- turn off the water.

Insist upon eveidence of a written shared well agreement or demand a pro cert that a well could be dug- for certain and would produce-and then you would at least know the cost to cure if the situation is curable.

I have seen this before and the site can lose more than half its value in some areas.

Brad

 

[Richard Carlsen]

Insist upon evidence of a written shared well agreement or demand a pro cert that a well could be dug- for certain and would produce-and then you would at least know the cost to cure if the situation is curable.

I have seen this before and the site can lose more than half its value in some areas.

Whoa there a minute. Your job is to appraise the property; not to get everybody's ducks in a row. About the time an appraiser doing an appraisal on my house came up insisting and demanding, that lender would be replaced by another.

We can request and we can make the report subject to but we can never, ever insist or demand anything. We have no authorization to do so and certainly no control over everybody (No controlling legal authority as the inventor of the Internet and discoverer of global warming puts it)

You request and wait and if you do not get what you need, you proceed with the report, stating that certain things were not forthcoming or you decline the order. But you certainly do not insist or demand. Only children and certain privileged groups get to do that.

 

[Otis Key]

I have to agree with Richard on this. It's not my job, spot or position, nor training, to ascertain if there is a legally enforceable well share/maintenance agreement. I just point out the facts and leave it up to the legal department of the lender to interpret the legalities of any and all legal documents.

Our state has now required a "liquid waste disposal system" (septic system) be licensed any time a property is sold or a new one is installed. I'm not the one to determine if there is or is not a license for that. I will make it "subject to" and let the lender do THIER job.

 

[Joanne Rauenzahn]

I just point out the facts and leave it up to the legal department of the lender to interpret the legalities of any and all legal documents.

Legal department?? Dang that's me too!!

I also happen to be a resident title agent - for commercial only so we can make more $ on those loans. Passed the test first time

 

[TEL2002]

Otis said......." let the lender do THIER job."

Personally, my preference is that they do their job.

I just love doing TC's work.

 

[Brad Ellis]

Richard, et al,

Sooo.......

PLEASE tell me how you are going to get around Fannie's requirement that you NOT add more extraordinary assumptions but then must- repeat must- "identify the characteristcis of the property that are relevant to the type and definitions of value and the intended use of the appraisal." (SR1-2c). The overwhelming majority of appraisals specify Fannie compliance even if they are not going to Fannie.

Or are you guys claiming that access to a sustainable water supply for a SFR is NOT a relevant characteristic?

But- you are right about one thing- it IS the lender's job to get you that info. That is why I say INSIST and/or DEMAND. If they will not comply, withdraw from the assignment. I did not say go get that stuff yourself...

Brad

 

[Richard Carlsen]

Or are you guys claiming that access to a sustainable water supply for a SFR is NOT a relevant characteristic?

A house with a shared well has access to water. The source is just not located on the subject property. If it is not illegal to have a shared well IAW local health department regs, why should FNMA or any other secondary market buyer have a problem with that? It is not ordinary and it is not customary but if it does not violate local health department laws and regulations, who am I to say "NO NO NO! You cannot do that".

 

[CANative]

Richard, you took Brad's quote out of context by state "access to water" instead of "access to a sustainable water supply."

If there is no evidence of a legal right to draw the water, then it's possible that on a whim the water source owner could turn off the tap.

In my case, we have 5 properties on a shared well. The well is across a large highway out in a vineyard. There is no water sharing agreement. But we hired an attorney to research water rightw law and since we've been sharing this well with the vineyard owner for 40 or 50 years, it's likely that we could enforce a prescriptive (?) easement to the well.

 

[Kevin Mc]

Deal with them all the time....

but they are very common in urban areas. Detached as opposed to semi-attached(shared wall) are definitely more desirable 90% of the time. Extracting a number(5%-10% etc....) would be farily difficult given it is very atypical for your area, but it typically is less desirable.