Appraisers' Free Forum

Jim Plante wrote:Judging only from what has been posted, including the pics:

1) I want it! Man, that's a pretty Victorian.

2) HBU is an interim use as SFR. The HBU summary in the report should address the reasonable probability of a zoning change to some commercial type that would accommodate a C-store.

A LOT would hinge on how probable that zoning change might be. If it's pretty much a slam dunk, then you have to do the math: Move the existing house, build the c-store, and figure out how much money you'd make doing that, versus what you could sell it for as an SFR.

Moving a house that big would cost about $50K (WAG) depending on the distance. (If you even THINK about demolishing that lovely Victorian, you are evil, and must be destroyed!)

Good comments all. I insist on one extra step address if we have to go with Lubyannemiekegp method of lending support to the dark side. Addfress the probability that the zoning folk will come to their senses and make sprawl and development that threatens these Vics illegal.

The Dark Side? Does that mean I am a Sith Lord now? My comment was based on eliminating personal opinion about the property. I have no concern about how nice the house looks.
My job is simply to evaluate the property, and, if a foreclosure, inform the lender that there are other potential usages that could be more profitable than a house.
Single wide or victorian, if it should be commercial, and my professional opinion is requested, then I'll tell them that either way.
It may be a gorgeous house, but it is potentially, since, unless I misread Greg's original post, a foreclosure, then the other potential uses must be addressed.

Goodpasture wrote:

Edd Gillespie wrote: For a 1004 you stop with the research and report of what is happening and do not predict what will happen.

so you don't comment on what could have an effect on a property should it go into foreclosure? Not saying it has a significant effect of value and may not affect the investment quality of the loan, but shouldn't a [s]possible[/s] probable alternate usage be reported and leave the decision concerning it's affect on the loan to the underwriters?

That is what I was trying to say .......

Doesn't look like a mad rush to convert to commercial use with all the vacant land nearby, SFR and even the school. The locals might raise holy hell if someone tried to bring commerical into an area of SFR and neighborhood school. Will it effect the property should it go into foreclosure? Find some comps of houses accross from schools on a busy corner that went into foeclosure. Otherwise its all a game of what if. What was the intended use of the appraisal?

Annemieke Roell wrote:

Goodpasture wrote:

Edd Gillespie wrote: For a 1004 you stop with the research and report of what is happening and do not predict what will happen.

so you don't comment on what could have an effect on a property should it go into foreclosure? Not saying it has a significant effect of value and may not affect the investment quality of the loan, but shouldn't a [s]possible[/s] probable alternate usage be reported and leave the decision concerning it's affect on the loan to the underwriters?

That is what I was trying to say .......

I guess we are trying to decide what has been, what is, what may be and what will be. Of those I feel relatively comfortable commenting on what has been and to solme extent what is. The rest of it has to be hedged, a lot. If you have a situation in which transition is occuring that is part of what is. If it is clear what it is transioning to, then that also is a part of what is, but I doubt very seriously if an appraiser can accurately predict how long the transition will take and what the results of it will be any better than an appraiser can predict an absorption rate. Appraiser use hindsight and are pretty well trained to tell their clients what has happened. We've got all kinds of rules and methods of practice to ensure we do that with credibility. But the minute predcition enters the picture the rules are non-existant. That is why we are we required to CLEARLY draw attenion to our hypotheticals, and warn the cleints that our results are imaginary and not credible when a hypothetical is used.

I can see that there is an entrenched opinion that prediction is a necessary part of appraisal and so far what I have said has had little or no impact on it. If you feel prediction is required then go to it. I think it is risky business and a basically unsupportable thing to do. Unless the client is sophisticated and expecting prediction, I prefer to leave it out. Commenting on trends is not prediction. Commenting on surrounding uses is not prediction. Commenting on either possible or probable changes is prediction. Fix and flip investors and land developers bet on the come and the good ones are successful at it, but I doubt they rely on appraisers to tell then what is going to happen next.