Neil Melby
Junior Member
- Joined
- Mar 17, 2002
- Professional Status
- Licensed Appraiser
- State
- South Dakota
I completed a 1004 appraisal on a 2 story home, approx 3500 sf above grade, very updated, very nice, very hard to find a home of this size in this university town. The problem is that the basement is a full basement with two apartments of fair quality finishing, rented for $350 each, with each apartment having an outside entrance.
In my highest and best use analysis, I analyzed and opined that the property would most likely be purchased as a single family home, I am of the opinion that numerous buyers would be drawn to the large size and updating and may even give up the rental registration on the lower level units as they park in the rear of the home and many would not like having permanent guests. I also explained in the report that the 30 day oral leases on the basement apartments may not significantly affect the fee simple status of the property.
The underwriter is insisting that the property be appraised on a 2-4 family form. I have informed the broker that my opinion is that the property may sell for substantially less as a 2-4 family property, and the income approach as well as multi family sales will be significantly lower than single family property sales, though I do know that for sure until I complete the analysis.
I have also told the broker that I need to state in the report that the highest and best use is as a single family home, not as a 2-4 family home. Should I complete a 2-4 even if the property would very likely not be sold as a 2-4 to realize the highest sale price?
In my highest and best use analysis, I analyzed and opined that the property would most likely be purchased as a single family home, I am of the opinion that numerous buyers would be drawn to the large size and updating and may even give up the rental registration on the lower level units as they park in the rear of the home and many would not like having permanent guests. I also explained in the report that the 30 day oral leases on the basement apartments may not significantly affect the fee simple status of the property.
The underwriter is insisting that the property be appraised on a 2-4 family form. I have informed the broker that my opinion is that the property may sell for substantially less as a 2-4 family property, and the income approach as well as multi family sales will be significantly lower than single family property sales, though I do know that for sure until I complete the analysis.
I have also told the broker that I need to state in the report that the highest and best use is as a single family home, not as a 2-4 family home. Should I complete a 2-4 even if the property would very likely not be sold as a 2-4 to realize the highest sale price?