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Worst case scenario...bad drought appraising

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Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
It was officially stated last week that Colorado is suffering from the worst drought conditions on record...and they started tracking it in the 1870's.

Over the past few weeks I've been doing an unofficial survey of homeowners in the mountain areas west of Denver and asking how their wells are holding up. So far I haven't had to appraise any homes where the well has gone dry, but just about everyone knows a neighbor who has recently encountered well problems that they've never experienced in the past. Back up holding tanks are becoming more common as well production decreases and homeowners struggle to maintain, but of course these are useless if the well goes completely dry.

The locals are whispering amongst themselves. They're worried about how bad this could get, if they will be next, and what will happen to the already strained mountain housing market if the mainstream media gets wind of what is starting to happen. The press coverage of recent wildfires in the area has already done considerable damage to the housing market here, but the added stigma of being an area prone to wells going dry could be devastating.

With drought conditions continuing, I'm forced to consider the possibility that this may become a major issue in the areas that I normally do appraisals, and I'm pondering how (or IF!) I can appraise a home with no water. There have to be at least 50,000 homes along the front range that rely on private or community wells as their only resource. There is no such thing as a public water supply here.

The obvious problem is that it is highly unlikely that any lender will be willing to finance a home with no water supply, and since there is no guarantee that drilling a new well would produce water, providing a cost to cure would be merely speculation with no guarantees that the problem could be solved.

Granted...we could get 10ft. of snow tomorrow and I'll be laughing because I was so worried, but in the meanwhile I think it wise to start now at fine-tuning how I word my appraisals so that my arse is covered in the event of a well failure in the future, and have a solid plan in mind should I start encountering homes with floundering water systems.

Any and all suggestions would be appreciated.
 

Karl

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Arizona
This appraiser is not an engineer in any aspect. The subject is on a private well, any question that any party involved in this tranasaction may have to the availability & or quality of water It is this appraisers opinion that a engineer qualified in this field be contacted.
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Hi Karl,
I already have a similar statement like that which I've always used with properties that have wells (but thanks anyway :) ).
What's eating on me is if I need to disclose if nearby properties are having water problems that I am aware of and are verifiable, and/or if the home has had to recently add holding tanks because their well is not as adequate as it once was.
I'm undecided as to how much should be disclosed when it's a coin toss as to whether or not things could get better or worse.
Or perhaps I'm thinking too much? :roll:
 

Frank Bertrand

Junior Member
Joined
Aug 21, 2002
Professional Status
Certified General Appraiser
State
Pennsylvania
why worry about something that may or may not occur?

its always rained!! At least it has east of the Mississippi
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Not in AZ which is having the worse drought in over 100 years. Wasn't the total 2.5 inches for the year in the Phoenix area Karl? And there are a lot of homes adjacent to the Phoenix area that haul water because the water table is over 600' below the surface, making it too expensive to drill a well. Western states are going to hurting in the future.
 
B

Bemis Pownall

Guest
dee dee
wells have been drying up in Coal Creek Canyon. They have been using cisterns for sometime now during winter months.

http://www.texasmetalcisterns.com/

that is all

:icecream:

remember free bread sticks with every order!
 

jtrotta

Senior Member
Joined
Jan 16, 2002
Dee Dee;

perspective is the way; if a house has no heat will the Lending community Fund The Deal :?: I think not :!:

water - I believe this will lead you to the question of personal hygene and state health codes; they may have to supply water for drinking purposes, but they (the state) does not have to supply enough fer u to be bathing in;

thusly, it would appear that you are on yer way to the Great Colorado Stank Foot explosion and/or happier Funky Feet live here 8O :lol: :lol:

Chow fer now

8)
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
There is always another way to skin the cat, i.e., cisterns, etc. which may increase costs. However, the value is as of the time of the appraisal. Unless you KNOW that there is a water problem, all you can do on a proposed is make an assumption that all appropriate utilities will be available and if for unforseen reason they are not, the value MAY be affected.

I see wells costing upwards of $20,000 around here as community water is not availble and they are willing to pay the freight for country living. I don't know what your well costs are there, but at least you have an idea of what the costs are.

Roger
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Bemis may hold the answer
have been using cisterns for sometime now

In Montezuma Co. many people have to haul water. I would estimate a cost to cure, i.e.- supplemental cistern or plastic tank + hauling water would be appropriate in the event of encountering a property with a dry well. Low flow systems tend to work in my area when you get a 1 gpm well, but generally that condition reflects poor water conductivity. I suspect, putting on my geology hat, that your problem is water table. Lack of snow moisture allowed the WT to drop. This was the case on Weston Pass when I stopped at the Ruby mine this summer. The mine is dry as far in it as I want to go (I don't consider it safe since mineral collectors have hacked at the supports) but some years I have seen water coming from the mouth of the portal.

Think snow.

Jtrotta said
on yer way to the Great Colorado Stank Foot explosion
But it will be a dry stank.....unlike here in Arkansas where we don't bathe because we don't want to. I just wait 'til it rains.
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Bemis,

My observation of failing wells so far has predominantly been homes that were built pre-1980's that are 300 ft. deep or less. Lots of those in Coal Creek Canyon, so it fits the pattern.

Are they have water trucked in, or do they pull water from their own wells via pressure pump and holding tanks?

When or if you run into situations like this, would you just use a disclaimer (ie: plead ignorance) to such matters?

Would you choose comps with similar water supply inadequacies (what a pain THAT would be!)? That's where I run into a problem.......is it ethical when you know that the subject has a failing water supply to compare it to properties that don't?

Don't mean to bomb you with questions, just pondering the possibilities and mulling over a game plan should this problem escalate in the future.
 
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