Two parcels on one deed

[Chuck Parent]

I stand corrected. Surplus land, as the land has no buildable value until it is transferred. The assessor used the term "excess", apparently in error.

Despite talking to people that I think are knowledegable, and the assessor...., I'm still not 100% sure how to handle this request. If the subdivided lot gets its own deed, it's transferrable. As it is now, it's just a second parcel. But for the cost of a new deed, he has a 100% transferrable and buildable lot. It's not buildable now.

The consensus was that I just add the land back and comment. But this lot ultimately has additional value once it gets a new deed, even if still in the same bwr's name. I'm smelling a HBU issue?

 

[Mike Garrett RAA]

Just did one like that. Two lots with a single legal description. Second lot could be legally sold IF none of the improvements including the septic and well are not on that parcel. Since the sales contract defines the property to be sold as Lots A and B, I appraised it as one site and gave value to the parcel size. In this case the site was approximately 6 acres.

Typical land sales in this subdivision are 2.5 to 3.0 acres. I found one land sale in the past two years in the subdivision. Property sold for $60,000.

Here is the question. How much value would you give for the additional lot? After a few replies will tell you what I did and why.

 

[CANative]

You're still not getting it. Excess land can be present in a single lot. Say you have a residential lot in a tract of homes that is 100 x 100 or 10,000 sf. Most homes are on 50 x 100 sf or 5,000 sf. If 1500 sf homes on an unsplittable 10,000 sf lots have sold for 165,000 while the same home on a 5,000 sf lot sold for $150,000 then you might conclude that the contributory value of the surplus land was $15,000.

But you find 5,000 sf buildable lots that are selling for $50,000. You could conclude that the HBU of a 1500 sf home on a splittable 10,000 sf lot is to divide off the excess 5,000 feet and sell it or develop a new home.

The fact that these two properties are on the same deed is irrelevant to the valuation.

 

[Michigan CG]

..........The fact that these two properties are on the same deed is irrelevant to the valuation.

Correct answer.

 

[CANative]

The problem is that the OPs lender client wants it done a certain way to make the property fit their loan scenario. It may be that without the excess land there is not enough value to make the loan and with the excess land (valued separately) they can't get it underwritten the way they need to.

I also get the feeling that the OP is being pressured by the client and doing the appraisal by combining the lots into a single value is the easiest way to get the job done (and it IS the easiest way even it if is not the most correct way.)

 

[NC Appraising]

Just read this on a AMC's website:



Did You Know?


If the Subject property has two (or more) parcels on one deed, all of the following criteria must be met to proceed: 1) Each parcel must be conveyed in its entirety; 2) parcels must be adjoined; 3) each parcel must be zoned residential only; 4) adjoining parcel (s) may only have limited improvements (e.g. detached garages, etc.); 5) at least two sales of similar utility (multiple parcels) must be provided to demonstrate the market support.
Why is this Important?


If you are unable to meet any of the conditions, you must stop and notify zzz via the communication log, so that we may inform the Client.

 

[Chuck Parent]

I also get the feeling that the OP is being pressured by the client and doing the appraisal by combining the lots into a single value is the easiest way to get the job done (and it IS the easiest way even it if is not the most correct way.)

Correct. I have been asked by the client to use a hypothetical assumption that the lots are combined ( ie the second lot is not buildable yet ), but comment on the subdivision. The lot will effectively be valued as surplus, and not excess.

According to the compliance officer, as long as I explain that the hypothetical was at the request of the client and explain the full scenario, I'm covered under USPAP.

I've never encountered two parcels on one deed, just want to make sure I'm covering my bases. I appreciate all feedback here.

 

[Ken B]

Is this thread serious?

Dude, how many $10,000 fines are you prepared to pay and how many USPAP classes will it take for you to get a clue?

 

[Lee Lansford]

Correct. I have been asked by the client to use a hypothetical assumption that the lots are combined ( ie the second lot is not buildable yet ), but comment on the subdivision. The lot will effectively be valued as surplus, and not excess.

According to the compliance officer, as long as I explain that the hypothetical was at the request of the client and explain the full scenario, I'm covered under USPAP.

I've never encountered two parcels on one deed, just want to make sure I'm covering my bases. I appreciate all feedback here.

Bull.

If the appraisal is being communicated on the current Fannie form and for a loan that may be headed to the secondary market, the instructions given to you are totally unacceptable.

 

[Lee Lansford]

Just read this on a AMC's website:



Did You Know?


If the Subject property has two (or more) parcels on one deed, all of the following criteria must be met to proceed: 1) Each parcel must be conveyed in its entirety; 2) parcels must be adjoined; 3) each parcel must be zoned residential only; 4) adjoining parcel (s) may only have limited improvements (e.g. detached garages, etc.); 5) at least two sales of similar utility (multiple parcels) must be provided to demonstrate the market support.
Why is this Important?


If you are unable to meet any of the conditions, you must stop and notify zzz via the communication log, so that we may inform the Client.

And, of course, they missed that little nicety )) about the importance of analyzing how many of those parcels are necessary to support the improvements.

Oh, well.