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What would you do?

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Monica (N GA)

Thread Starter
Freshman Member
Joined
Feb 19, 2002
Professional Status
Certified Residential Appraiser
State
Georgia
I am working on a STRANGE order right now. I recieved an order from an AMC requesting a 1004 on a proposed mnf home. They sent me the deed of the property stating 2.5+/-acres and a survey. The survey showed a parcel resurveyed into 2 tracts. Tract 1 has a 30 yr old mobile home on it and tract 2 is vacant. The total of both tracts is 3.00+/- acres not 2.5.+/-

I understood that I was to appraise tract 2 subject to the repo mnf home the owners are buying to put on it. The property owner said they owe 23,000 on both tracts together including the old MH but this was to be paid off with the new loan. The subdividing of the parcel has been approved by the county, but has not been recorded because it is security for the original loan and can not be subdivided till paid off. The owner and the mf home dealer both say I am to appraise both tracts and both MHs for the new loan. AMC is clueless as is Conseco. It makes no since to me to subdivide this property if they are going to encumber both parcels for loan security. They plan to keep the old MH for rental property. It could possibly be a county requirement to subdivide if they plan to keep both MHs but I haven't gotten that far into it.

I gave the AMC and Conseco 2 choices: 1. they could order 2 appraisals, 1 for each tract with conditions stating it could not be legally subdivided until the original loan was paid off. 2. appraise the new MH and all acreage and make a large adjustment based on extra cost approach and depreciation for the older MH. What would you do? :?
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
First, look at the Highest & Best Use. If the split is Legal then the H&BU for the parent parcel is likely to be as split giving each parcel it's own separate value. This is 2 separate Appraisals and Reports that would likely be a higher combined total value than a single report of the whole mess.

Why don't they leave the old loan on the older MH on it's own parcel that is split off with a release from that mortgage. This would probably need an appraisal for that parcel.

The new proposed would go on a second appraisal on it's own with it's own loan.

Hopefully, the older MH on it's now smaller parcel is worth more than the first loan balance and can be rented for much more than that mortgage payment.

I don't think doing this as one parcel (that's about to be split) with a new proposed and an older existing that's going to be rented will get them where they need to be plus would likely go against the real H&BU of the property, as proposed.

Sounds like no one involved in this mess knows what they are doing and you will need to teach them.
 

wyecoyote

Senior Member
Joined
Jan 15, 2002
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Washington
I would suggest do two appraisal's. One on the older Manufactured house on it's own tract of land. Make it subject to the legal split by approving authority. The second I would make subject to placement of manufactured house, title elimnation, and legal split of property by approving authority. You also stated that this is a Repo manufactured house? Was this one placed somewhere else before and what is the current condition, quality and age, can you currently view the manufactured house? If the manufactured house was allready placed somewhere else you will have to state that it has been moved to the new location.

Then in both reports I would disclose what currently exists. But it does sound like they need two appraisals from what you described.

And as Pam said test the H&BU of the subject. Is the older manufactured house so old that it has no value?

Your second option that you state. I've done properties with two manufactured houses on the same land. You will have to check with your local governing body to find out if this is legal (having to manufactured houses on the same property). In my area it is not legal and I had to state that in the report as well as the affect on the value of the property.

Well that's my two cents.

Ryan
 

Monica (N GA)

Thread Starter
Freshman Member
Joined
Feb 19, 2002
Professional Status
Certified Residential Appraiser
State
Georgia
Pam: I suspect they wanted to pay off the first loan to lower payments on the total. Renter of the older MH will most likely be their son. H&BU would be to split property and value each MH separately.

Ryan: I can go inspect the repo, I have no idea of the condition. Of course the dealer who is reselling it for Conseco says it is in GREAT condition. It is still on it's original lot. I agree that I must state that the home is a repo and is being moved from it's original condition. The older home should still have enough value to be worth something in order to justify the rent.

I could probably say the older home is inhabited by aliens and the newer repo is being moved from the bottom of the ocean and the land it's sitting on is atop a nuclear waste dump and Conseco would still finance it for 50% more than it is worth and double the going interest rate. LOL

Oh wait, I can's state the composition of the inhabitants...almost forgot!
 

Randy Beigh

Senior Member
Joined
Jan 16, 2002
Monica

Ryan's answer makes sense, except that I assume no one is paying you to do 2 appraisals.

It is not your job to educate anyone. It is up to the customer to decide what they want, not yours to help them out. It is likely that there are other issues that you don't know and can't know about. For instance, you have no idea what the lender is going to encumber in their loan.

It is up to the customer and if they don't know what they want, then tell them you will do the assignment when they tell you what they want. I would put this on hold until they get their stuff together.

I would also ignore the dealer and the owner as they are not your customer.

It would behoove you to tread careful as you could be held liable for providing a mis-leading appraisal, if you leap without the customer's approval.

Hope this helps
 

Monica (N GA)

Thread Starter
Freshman Member
Joined
Feb 19, 2002
Professional Status
Certified Residential Appraiser
State
Georgia
Randy: Actually I do have an idea as to what the lender wants to encumber...they TOLD me. When I called to speak to the property owners about coming by and looking at the lot they were the ones that clued me in that something was amiss. They wanted to be there to let me in the old trailor. After speaking to the lender and the AMC it is on hold until they decide what they want to do. I don't know about you, but I talk to the property owners about what they are planning on doing. If this doesn't jive with my appraisal order I then get with who ever ordered it to see what's going on. Sometimes the lender didn't order what they needed and sometimes the property owner is confused about what they are getting in their loan deal. It is my job to define the intended purpose of this report. If the intended purpose is to finance the new repo, the total acreage and pay off the old trailor then I can't do that without appraising the entire property either in 1 or 2 reports, and identifying all other structures on the property and how they either contribute or detract from value.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Sounds like you've got a good handle on it, Monica. Keep us informed on what they end up wanting.
 

Judy Whitehead (Florida)

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Florida
I agree that it sounds as if you have a good grip of what they want. I have had this happen before and simply do/charge for 2 reports. I tell them that I will reduce the cost for having to make just one inspection trip and then simply reduce it by the amount I charge for making an additional inspection. Naturally the work on both reports will be the same less the extra inspection trip. However, if you have to make an inspection on the home to be placed on the second lot, I certainly would charge extra for that, unless it is relatively close by.
 

Randy Beigh

Senior Member
Joined
Jan 16, 2002
Monica

Sounds like you did what you needed to do and kept the ball in the customers court. Good job.
 
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