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Subject to?

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Matt Isakson

Thread Starter
Freshman Member
Joined
Dec 18, 2005
Professional Status
Certified Residential Appraiser
State
Texas
I was asked to appraise a residence that sits on one lot and five connected/adjacent vacant lots as one property (all currently owned by the same individual). Currently, the five adjoing lots are seperately platted and have individual tax id's, parcel numbers, etc. I advised that I would need to make the appraisal "subject to" a hypothetical conditon that the seperate lots are one site. I was told this should be an "as-is" apprasial since they are already owned by the same individual. This property is rural so there are no zoning restrictions, etc. Is this an "as-is" appraisal or a "subject to" appraisal? Any help would be greatly appreciated.
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
I was asked to appraise a residence that sits on one lot and five connected/adjacent vacant lots as one property (all currently owned by the same individual). Currently, the five adjoing lots are seperately platted and have individual tax id's, parcel numbers, etc. I advised that I would need to make the appraisal "subject to" a hypothetical conditon that the seperate lots are one site. I was told this should be an "as-is" apprasial since they are already owned by the same individual. This property is rural so there are no zoning restrictions, etc. Is this an "as-is" appraisal or a "subject to" appraisal? Any help would be greatly appreciated.

I can't wait to see where this string goes.
 
Joined
Jun 3, 2005
Professional Status
Certified Residential Appraiser
State
Colorado
I'g go with "As Is" -- even though there are multiple parcel numbers, it sounds like the subject is an SFR with an oversized lot.

There's no reason to require that they be combined; and unless there is a big demand for building sites, the present use is probably the HBU.
 

stefan olafson

Senior Member
Joined
Apr 2, 2003
Professional Status
Certified General Appraiser
State
North Dakota
When appraising agricultural property the same owner often has a bunch of property with different legals and parcel numbers and a house on one parcel. If the HBU is ag land then it's appraises 'as-is' as ag land. Same would apply to your property I would think.
 

Matt Isakson

Thread Starter
Freshman Member
Joined
Dec 18, 2005
Professional Status
Certified Residential Appraiser
State
Texas
The only reason I suggest a "subject to" condition is that I do not have survey of this site as they are needing it. As such, I do not know if there are any adverse easements, encroachments, etc. I do not want ot make those assumptions. I guess I could just make it subject to a favorable survey?
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
I was asked to appraise a residence that sits on one lot and five connected/adjacent vacant lots as one property (all currently owned by the same individual). Currently, the five adjoing lots are seperately platted and have individual tax id's, parcel numbers, etc. I advised that I would need to make the appraisal "subject to" a hypothetical conditon that the seperate lots are one site. I was told this should be an "as-is" apprasial since they are already owned by the same individual. This property is rural so there are no zoning restrictions, etc. Is this an "as-is" appraisal or a "subject to" appraisal? Any help would be greatly appreciated.
If the legal description for the subject property is one lot, not five lots, I would not appraise it as subject to. It seems like someone does not want to make loans on raw land but have it as security for the lot with improvements.
 

Dale Hill

Sophomore Member
Joined
Jan 12, 2006
Professional Status
Appraisal Management Company
State
Pennsylvania
What does the deed say? Are they all deeded together or seperately?
 

Fred

Elite Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Virgin Islands
What does the deed say? Are they all deeded together or seperately?
Are you suggesting there might be a deed restriction keeping the lots from being sold off one at a time?

1. This is first a HBU question
Legal: Is there an impediment to selling the parcels off one at time?
Economic: What is the prevailing lot size?

2. You need to get a better graps on assignment conditions.
"As is" and "subject to" are not mutually exclusive - even though the infamous "form" may cause you to think that way. Even "as is" appraisals are "subject to" assumptions.

There is nothing inherently wrong with stating there are no obvious adverse easements and encroachments, and assuming there are none - and calling the appraisal as-is. On the other hand, you may have to do some more diligient research on easements and encroachments. It's a scope issue.
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
Forget what the deed says or who owns what. Forget that they are separately identified as individual lots. You are not appraising them as individual sites regardless of what parcel ID numbers are.

The assignment sounds to me like the client is requesting an "as is" appraisal of a property with the site being constituted of 1 improved lot and 5 contiguous lots. What is so hard about that. If the lots are 1/2 acre lots then the site is 3 acres (1 improved lot @ 1/2 acre plus 5 lots @ 1/2 acre each). That's the site the client wants included in the value to make his lending decisions.

Now all you have to do is go out and find 3 sales with 1 to 5 acre sites to use as comps.

Of course the UW will come back and want to change the whole thing and drop the 5 additional lots or want a separate value for each but that is later. The assignment conditions that have been given to you is to appraise the house on a site that is made up of 6 lots. Just make sure that you list the lots, noting that they each have their own parcel ID number. You should also note in the report that the defined site as directed by the client in the assignment is based on the Hypothetical Condition that the lots do in fact, legally constitute the site for lending purposes.

You cannot make HC's in a report but I know of nothing that says that the client cannot impose an HC in the assignment conditions.
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
There seems to be a misconception about deeds. Five lots on one deed does not mean one property. It means five properties and one piece of paper.
Plats (surveys) are the key along with legal descriptions ... not how many are listed on a single piece of paper.

Also .. requiring someone to join five lots into one for mortgage purposes is not only absurd in most instances but could result in a loss in market value.

I would not require anyone to join already split lots in most situations. First its not my call and second its not typically in the best interest of the owner.
 
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