Zoning, Use and Competence

[George Hatch]

One problem a residential appraiser might run into with HBU analysis is if they don't have access to non-residential databases.

 

[Terrel L. Shields]

one to four unit residential properties without regard to value or complexity; and,

doesn't even mention HBU, does it? Don't make this too hard..it isn't.

10 ac. ag zoned has as much to do with agriculture as rodeo bullfighting. An A-1 in our area is usually a SFR on acreage...nothing more.

Again, what is 'complex'? USPAP does not define it in precise terms and buried in the Fed FInancial policies are statements like this

"A regulated institution may presume that appraisals for 1-to-4 family residential properties are not complex unless the institution has readily available information that a given appraisal will be complex. The regulated institution will be responsible for making the final determination of whether the appraisal is complex...."

Subpart G, Appraisals under 225.63 adopted by the board of Governors of the Federal Reserve system June 27, 1990...

The state board is not the authority nor is USPAP to determine whether a property is "complex" or not....the appraiser is responsible for knowing when he is in over his head. That's called competency.

 

[Mr Rex]

I don't play the SS parsing game. We can play word games all day, I guarantee some losses, but I will win some too. I can read, and so can you and most of the others. You are wasting you talents in the parsing pool.

 

[Mr Rex]

One problem a residential appraiser might run into with HBU analysis is if they don't have access to non-residential databases.

GH, I have access to all the databases. The courthouse is open every day. Around here that's as good as it gets, and I have CG's calling me for "undiscovered gems" regularly, because they know how much time I spend there, as I look for answers to fill out my form's, of course. I am an idol worshipper, I will be a CG one day.

 

[xmrdfghap]

Who can/should appraise these types of properties?

a)A rural property used residential on 10+ acres zoned Agricultural (no Ag use present)

b) An urban property used residential zoned commercial.

I don't see any problem for a Residential Appraiser doing either one of them. On a) ten acres is a residential tract and is not feasible as an ag economic unit. It's an estate sized tract, not a farm. A lot of people in situations like this fight conversion to Residential Zoning because their taxes skyrocket. If they can keep a horse or a cow or a rooster on it, they can claim "ag" status and defeat any attempt to change the zoning to residential.

On b), if there is a potential change in use then it MAY escalate to a commercial appraisal, but so long as it is being marketed as a residential property and is being used as a residential property then it IS a residential property. You can "what if" any property to death, but you are dealing with what is, not what it might be at some point in the future. It is entirely possible for the house to be appraised this week as a house, then in 3 months appraised as a an outlying plot at the newest super wal-mart. Although the outlyer lot should be done by a CG, the house as a house is residential as of the effective date of the appraisal.

To reviewers out there, CG or not, what do you do when something like this comes across your desk as a residential appraisal?

Review it.

Am I gonna fault you for not anticipating that the house was going to be moved off the tract and a new Applebee's was going in? Not likely. What is your scope of work? Are the results you developed within that scope of work credible? Did you minimize your assumptions? Did you explain where and how you made assumptions? Are they reasonable (and thus credible)?

If you try to persuade me that the Ag land is a farm, you better have evidence beyond what the zoning says. I know a place where you can get 160 acres for under $15,000 ($1,500 down, owner carry the balance). Does that make it a farm? nope. Not only that, you can't even build a house on it unless you put in a cistern for your water. There isn't enough dirt OR water to grow a peanut, let alone farm. FWIW, it too, is zoned ag and it take around 200 acres per AU.

 

[Zero]

I don't see any problem for a Residential Appraiser doing either one of them. On a) ten acres is a residential tract and is not feasible as an ag economic unit. It's an estate sized tract, not a farm. A lot of people in situations like this fight conversion to Residential Zoning because their taxes skyrocket. If they can keep a horse or a cow or a rooster on it, they can claim "ag" status and defeat any attempt to change the zoning to residential.

On b), if there is a potential change in use then it MAY escalate to a commercial appraisal, but so long as it is being marketed as a residential property and is being used as a residential property then it IS a residential property. You can "what if" any property to death, but you are dealing with what is, not what it might be at some point in the future. It is entirely possible for the house to be appraised this week as a house, then in 3 months appraised as a an outlying plot at the newest super wal-mart. Although the outlyer lot should be done by a CG, the house as a house is residential as of the effective date of the appraisal.



Review it.

Am I gonna fault you for not anticipating that the house was going to be moved off the tract and a new Applebee's was going in? Not likely. What is your scope of work? Are the results you developed within that scope of work credible? Did you minimize your assumptions? Did you explain where and how you made assumptions? Are they reasonable (and thus credible)?

If you try to persuade me that the Ag land is a farm, you better have evidence beyond what the zoning says. I know a place where you can get 160 acres for under $15,000 ($1,500 down, owner carry the balance). Does that make it a farm? nope. Not only that, you can't even build a house on it unless you put in a cistern for your water. There isn't enough dirt OR water to grow a peanut, let alone farm. FWIW, it too, is zoned ag and it take around 200 acres per AU.

There comes a time when it's this divided that I just need to make the decision to side with an argument, and I am tending to agree with views like yours on this, Greg. When training, my mentors/employers did really train me as they either immediately turned them down becasue they didn't want to deal with the headaches involved or they 'acted as if' the property was residential, period. I don't want to do either.

Can either/both of these be done on Fannie 1004's. If so, I guess I'm asking how.

Would my previous post/explanation of HBU, etc suffice? How much detail/what to include in scope, HBU, etc?

 

[Mr Rex]

Are these legally allowed uses(grandfathered)? Is the H&BU residential? If so, then they can be done on the Fannie Form. If they are legal non- conforming, the lender will likely want to know if it can be rebuilt, you may be able to find out from the local zoning office, or you may have to tell the lender that they will have to find out on their own, if they want a rebuild letter etc.

If you have a problem getting your head around the H&BU analysis, why not team up with a CG on these and get the necessary assistance and training. Then you will know which way to go on the next one. I have an old CG that I call on occasion for help on small commercial jobs that are within my license level, when I can't get past some point that I have never come across before. He loves to help me and I appreciate the help. It pays to network.

In the counties that I cover that have zoning, all areas outside the City and City's ETJ are zoned AR (agricultural-residential) or RA (residential-agricultural). Undoubtedly if I don't comment, the UW will ask for a comment that the subject is not being used for agricultural purposes even when its a house on 3/4 acre.:Eyecrazy:

 

[Zero]

The subject is zoned commercial but HBU is considered as improved, as used, as comparable sales zoned commercial sold and used as residential are available and competitive in the residential market, but not in the commercial market, as recent sales this neighborhood of commercially zoned rowhouses improved and used as residences are listed as both commercial and residential for the market, but are predominantly bought/sold as residences." (Sorry about the run on sentence...of the cuff)

Now I'm quoting myself...jeez.

Rex, I said this earlier and it is true. Use is legal, non-conforming (as prop class and use is listed on city records as residential). Is the above enough to justify my analysis of HBU is telling me that it is as improved. I am still waiting to hear back from my client about what they will require and included in the scope of work. Still trying to get answers from the right person at the zoning office. B'more city is FUN to deal with.

 

[Fred]

one to four unit residential properties

doesn't even mention HBU

Of course it did. SFR and MFR are HBU designations. One-to-four unit specifies an intensity of development and residential is a category of design – and those are the two dimensions (highest and best) of use. A fifth unit would exceed the intensity limit and a different permissible use would exceed the category limit.

one to four unit residential properties

doesn't even mention HBU

Of course it did. SFR and MFR are HBU designations. One-to-four unit specifies an intensity of development and residential is a category of design – and those are the two dimensions (highest and best) of use. A fifth unit would exceed the intensity limit and a different permissible use would exceed the category limit.

Don't make this too hard..it isn't.

I agree. It’s very simple. Commercial property isn’t residential and inept word games won’t change that.

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I don't play the SS parsing game. We can play word games all day

If you can’t make a sound appraisal argument, then stop breaking the rules with personal insults.

 

[Mr Rex]

Steven, my apologies if I crossed the line (in your view) with the "personal crap". I guess I took umbrage to the commercial appraising comment. I guess it is commercial appraising when you have to do a H&BU on a property in an area of transition from Residential. However, I don't think Andy ever mentioned transaction values, so assuming that the value of the property (@ its H&BU of course) is under the license limitation in his state, he is allowed to do this with his residential license. I do recommend that he team up with a CG for this one if its over his head, but I don't think its necessarily a "commercial" assignment.

I would send you a PM now, but you might not appreciate my grasp of the finer points of the English language, so I will wait until the little fellow with the pitchfork gets off my shoulder. If I offended you, I do sincerely apologize.