Two appraisals, One report

[Steve Owen]

Okay. I’m going to try this again. For some reason, it didn’t get on the last time I tried to post it.

I have a client who wants me to combine two separate appraisals into one self-contained appraisal report. I cautioned him that the two separate values are not necessarily the same as the value of the whole, but the appraisal is for tax purposes and the attorney wants it that way.

I cannot find anything in USPAP that specifically prohibits this. However, it seems to me that it would be very difficult to do it this way without being misleading, which of course would be a big USPAP No No.

The properties are not contiguous, but are across the street from each other. One is an old building and the other is a vacant lot. I think it would be possible to do one appraisal with a single value for both properties, but the client wants two separate values.

Does anyone have any experience doing this? What kinds of things do I need to look out for? I am really inclined to tell him to go jump in the lake; that two appraisals means two reports, period. Am I being unreasonable? How would you handle this request?

 

[Larry Lyke]

Be a little more direct with the attorney: Tell him he's being cheap and you know it and you know he knows it.

Your post started out giving the impression the client was looking for two different values in a single appraisal for a certain property. That could be done.

But the 2 separate parcels you describe do not lend themselves to "combo" treatment.

He's knows what he's doing. They are 2 different parcels.

 

[Mountain Man]

I agree with Larry,
Cheapo Client! No Sir, not on me. The cheapest you could possibly get are 2 reports in restricted format. This is not an assemblage, 2 parcels = 2 reports.

 

[airphoto]

So Steve,

Charge him for two reports (maybe oughta collect 'up front!')

Create two reports. Staple 'em together ..

 

[Pamela Crowley (Florida)]

Sure, you can do two appraisals of two different properties in one self-contained report. You have the basics, then one of the individual properties, then the second individual property, then closing basics.

2 Appraisals within 1 report. Full fee for 2 reports. No problem that I'm aware of. Whatever you would normally charge for each, add that together and bill it for the full amount.

I just did one for a lender on two contiguous lots in a newer rural development (5 Ac & 6 Ac). Buyer is paying full price for each lot - added together. This became a Highest & Best Use issue. H&BU is each lot it's own separate SFR. Typical acreage size for SFR in this area is 3 - 5. Combined, it now depends on where the new SFR is going to be placed on the property. If it's placed on or too near the center line of the 2 lots, the individual lots can no longer be sold separately and the H&BU of these 2 individual lots is lost. Anyway, 2 lots, 3 values to opine about, 1 report will all included, fee for 3 appraisals. Seller didn't like it, buyer had his eyes opened, Underwriter loved it once (s)he got over having to read a narrative istead of a land form. I get paid for 3 - all is as it should be.

 

[Steve Owen]

Pamela:

This situation really isn't a highest and best use issue. These two properties have nothing in common except that they are across the street from each other and are under the same ownership. So, this situation is not much like yours; there is also no plottage issue here. Also, the fee is not expected to be an issue.

What is bothering me is that I can't see any practical reason for putting the separate appraisals into one report. The attorney wants it that way, but will probably say "ok" if I tell him it has to be two separate reports.

What you are saying makes sense, though. It sounds kind of like what I had already thought about. Everywhere in the preface, or opening basics, you would have to be clear that the report contained two separate appraisals, then you would do the work and analysis on each, then in the closing basics you would have to go back to changing all the boilerplate language normally used from "appraisal of" to "two separate appraisals of" and so on. It is all that complication that has me thinking I will tell him "no."

It just seems to me like there is no good reason to combine this into one report. My main concern is doing it in a way that will not be confusing or misleading. Fee is not an issue, but maybe the attorney is thinking that filing of the deal will be easier if its in one report.

Oh well, this is why I usually don't like to work for attorneys. Thank you to everyone who responded.

 

[Ross (CO)]

Steve, Seems like you are clear on how to reply to this unique request. You may consider paper-clipping the two individual reports together, in more than one location, and then putting the two joined reports into one legal size envelope and submitting "the two together as one". Let the attorney add A + B and have it equal C..... if he or she wants a total of value with which to proceed.

 

[Pamela Crowley (Florida)]

What is bothering me is that I can't see any practical reason for putting the separate appraisals into one report. The attorney wants it that way, but will probably say "ok" if I tell him it has to be two separate reports.

Under this circumstance and considering all the changes that would be necessary to combine the 2 appraisals into 1 report, I would tell him that it really does need to be 2 separate reports. Yes, your situation is very different than mine was. You have 2 completely different properties and I would consider yours best completed as 2 different and separate reports. It can be done in one large report but.... why? So, you are the appraiser, do what you want/feel you need to do.

 

[Paul Ness MAI]

This kind of thing is done all the time, sometimes with more than two properties. There is nothing in USPAP that prohibits putting two appraisals in one report, as long as all the usual USPAP requirements are met.

Usually it is to save money, but it really only saves time when the properties are the same type and you would present the same raw market data. It really doesn't save much time when they are two different types of property even though across the street from each other.

Ask if money is the reason, and if they say yes then tell them it really isn't going to save any time, as a matter of fact it could take more time since they are two different property types and two different sets of info would have to be combined into one report from templates of two previous appraisals.

 

[Farm Gal]

GASP
Paul! You suggest actually TELLing a client what they already suspect but aren't entirely sure of:
8O appraisers use templates????!~!~!~!

You blowing our cover, man! :lol: :lol: