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VA Appraisal

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Music Lover

Freshman Member
Joined
Nov 20, 2013
Professional Status
Certified Residential Appraiser
State
Wisconsin
The city has the home for this VA appraisal classified as a single family home. Not sure if it was a mistake or exactly what the city was thinking as it has 2 fully functional separate living areas with private entrances.

The subject is an early 1900's 2 family home. The main unit is owner occupied and the upper unit tenants are the owners sons who do not pay rent but do pay for a portion of the utilities.

At anytime the upper unit could be rented out to anyone, not just family, as it has its own exterior private entrance and a fully functional kitchen. Utilities are shared because there is only one set of utilities for the home. This is not uncommon for our area and in these instances the utilities are split between tenants or the landlord includes utilities in the rent.

The lender wants it appraised as a single family home.....I have explained this situation to the lender and to VA several times and that the appraisal would be misleading (USPAP violation) to complete it on a 1004 as a single family home.

VA is saying to complete the appraisal on the 1004 as the lender has requested. Fully disclose that this is how the lender wants the subject appraised. Per VA as long as it is fully disclosed the appraisal would not be misleading.

VA also stated - how would you appraise a mother-in-law suite above a garage, as a 2 family or a single family home? In our area mother in-law suites are few and far between. If there are any you would not find it in a home of this age range and any way what does a mother-in-law suite have to do with my current appraisal.
(anger/frustration escaping)

My comp sales will be 2 family home sales as there are no single family home sales similar in characteristic to the subject (2 living units).

Is there something that I am not comprehending here? Can I complete with full disclosure on a 1004 and not be misleading or a violation of USPAP? If so, please explain.

I am by no means a newbie appraiser ( I have been in the profession for 17yrs) but, believe it or not, this is the first time I have been put into a situation like this.

Thank you!
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Is it income producing? If not, I would go ahead and appraise it as a single family with an accessory unit but not as a duplex.
 

Music Lover

Freshman Member
Joined
Nov 20, 2013
Professional Status
Certified Residential Appraiser
State
Wisconsin
Is it income producing? If not, I would go ahead and appraise it as a single family with an accessory unit but not as a duplex.
I have considered that but there are no comparable sales of homes with an accessory unit.
Accessory units are not common here. I searched back 2 years and we had 2 sales with accessory units but one home is 2 yrs old and the other is 5 yrs old. The subject is 75yrs old.
 

Don Clark

Elite Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
I just completed a very similar home built in the same era. I did it exactly as VA has told you to do it. It would not be misleading as long as you completely disclose what it is, the fact that it has 2 units, 2 entrances, etc and that the use is as a single family with a family member occupying one unit for no additional income. In my case I was fortunate and found at least 1 similar uniot sold in a similar manner. I would also suggest that if possible you include at least 1 single family property of similar square footage and similar age to show any market differences. As far as USPAP issues, the key here is to not attempt to or be misleading. You might also add a comment about highest and best use. If the use as a single family residential property is not it's highest and best use then define highest and best use for the subject. "That" is a USPAP issue.
 
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