Re: VA loan, 60 acres with 5 acre appraisal

Since I'm no a PM I can't post in that thread but I did want to add something to the discussion. I'm not on the VA panel (fees too low, too much hassle, etc.) but the appraisal issue doesn't really have anything to do with VA. For some reason the appraiser did this hoakey "house and 5" appraisal on a property with 60 acres in an area zoned for 80 acre minimum lot sizes. The OP states that the lot is grandfathered (this means that the lot was legally created prior to the 80 acre zoning ordinance.) It is a substandard lot which has been grandfathered. You couldn't create a lot like this now because the zoning authorities require 80 acres for any new lot. If you had a lot that was 158 acres you couldn't subdivide it even though an 80 acre lot is legal. This is because the remaining lot would onlh be 78 acres - non-conforming.the appraiser complies with the disclosure requirements set forth in USPAP for hothetical.

By the same token, you couldn't carve a 5 acre lot out the subject's 60 acres because then you'd have TWO subsandard lots (5 acre and 45 acre). The appraiser cannot simply use a hypothetical condition that the lot has been sudivided because it would not be credible given the lot size minimums required by the current zoning.

Here is the definition of a Hypothetical Condition: That which is contrary to what exists but is supposed for the purpose of analysis. Hypothetical conditions assume conditions to know facts about physical, legal or economic characteristics of the subject property; or about conditions external to the property, such as market conditions external to the property, such as market conditions or trends; for about the integrity of data used in an analysis

Here is what USPAP requires (from Standard 1-2(h)) Identify any hypothetical conditions necessary in the assignment. Comment: A hypothetical condition may be used in an assignment only if:

use of the HC is clearly required for legal purposes; for purposes of reasonable analysis or for purposes of comparison;

use of the hypothetical condition results in a credible analysis; and thje appraiser complies with the disclosure requirement set forth in USPAP for hypothetical conditions.

Since the lot cannot be subdivided, preparing an appraisal as though it were subdivided is not credible and might even be considered misleading.