Two parcels on one deed

[Chuck Parent]

That's why I'm here asking, Ken. While this profession is generally cut throat, there are a generally helpful people here with practical advice.

The report was previously delivered with the single parcel appraised. The client wants the additional parcel added back in. The client and AMC compliance officer said to use the hypothetical assumption that it's all one site, and to comment on a potential HBU. I'm trying to ascertain the correct way to do it, despite varying advice.

 

[Ken B]

Head...must...not...explode.

 

[Ken B]

Let's start with the basics.

There is no such thing as a hypothetical assumption.

 

[Chuck Parent]

...hypothetical condition that the subdivided parcel is still one parcel, at the clients request.

Clearly, the subdivided lot has value as a buildable lot and I need to mention that. The bank has requested the additional parcel added back in, with the hypothetical condition comment. The AMC compliance officer agreed. As Can mentioned, I really think that each parcel should be value independently. However, I never have experienced two parcels on one deed and I'm not sure how to handle it.

I'd be greatly appreciative if you could provide the way that you think I should handle this, Ken.

 

[CANative]

You have two separate properties each with their own and separate highest and best use. You might as well have a house and a lot on one side of town and a separate lot on the other side of town.

There is no need for an HC and in this case it would be likely that the HC would be misleading and would result in an opinion of value that was not properly supported nor credible.

Offer to provide two opinions of value, each with it's own HBU analysis and support for the opinions. You can report these appraisals in the same form if they want or two different reports.

You have no other options unless you think you can support a combined value using sales of similar two lot sales where one is improved and one is not.

 

[leasedfee]

CAN is giving you good advice. . . . It is important, irrespective of the profession, to get the vernacular correct -- that's the only way we can communicate correct information and knowledge, as opposed to incorrect information and knowledge.

 

[Ken B]

Chuck,

seeking the counsel of others is a good thing. So, kudos for that.

But if you follow the advice of the AMC "Compliance Officer", you are setting yourself up for failure. Listen to CAN and Lee.

 

[Lee Lansford]

...hypothetical condition that the subdivided parcel is still one parcel, at the clients request.

...

It's not so much that there are 2 parcels, its whether or not each has its own H&B Use (the one separate from the other)...and I believe that you are saying that this is the case--right?

If it be the latter, the HC that client is asking you to utilize will result in an opinion of "value" that is not Market Value.

 

[Chuck Parent]

You have two separate properties each with their own and separate highest and best use. You might as well have a house and a lot on one side of town and a separate lot on the other side of town.

There is no need for an HC and in this case it would be likely that the HC would be misleading and would result in an opinion of value that was not properly supported nor credible.

Offer to provide two opinions of value, each with it's own HBU analysis and support for the opinions. You can report these appraisals in the same form if they want or two different reports.

You have no other options unless you think you can support a combined value using sales of similar two lot sales where one is improved and one is not.

Thanks, Can. At least someone agrees with my initial answer. I originally said that they needed a separate land appraisal. That's when they came back with the HC, and the compliance officer said "if that's what they want....", just comment.

My original value was just for the verified parcel with the home. I mentioned in the report that the subject parcel that was recently subdivided but didn't address it or give it any value. The bwr indicated that he recently subdivided his land, and the tax records/SR1A reflected the change to the smaller lot. He didn't mention that he still owned it, or that it was still on the same deed. I erroneously assumed it was sold as well, based on the conversation with the bwr

I've never received a deed, only an street address and owners name. Research and calls to the assessors office confirmed data for ONE of the parcels but never any information on the adjoining subdivided parcel on the deed. The subdivided lot has it's own address, block and lot and tax id#. The SOW indicates one address, and one parcel, and not the subdivided lot, so I don't think it's misleading. But if I just add the acreage with a HC, I agree that it would be misleading. Was the original report submitted a violation of USPAP?

I really appreciate your feedback, Can. I want to be USPAP compliant and accurate. I'm not liking their HC scenario.

So to summarize my best course of action.... Tell them that the report submitted indicates value for only the X parcel, and offer to complete another separate opinion of value (for an additional fee) which can be included ( and explained ) in the original report, or in a separate order for a land appraisal?

 

[CANative]

Was the original report submitted a violation of USPAP?

Why would it be? To sell either parcel independently only requires a new deed. What's that cost? $30 maybe.

** unless I missed something in your last post. It was kind of hard to understand (for some who carelessly speed reads :icon_mrgreen: )

So to summarize my best course of action.... Tell them that the report submitted indicates value for only the X parcel, and offer to complete another separate opinion of value (for an additional fee) which can be included ( and explained ) in the original report, or in a separate order for a land appraisal?

Yes.

Make sure you have the reason WHY it has to be this way. Then they won't think you're just being stubborn.