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TimtheGuy, please don't take this question as condescending, as I don't mean it this way at all, but are you a realtor, appraiser or lender? I'm none of these but when I got the first appraisal, I called the bank to complain about the price and this is what they explained to me. Then I called the biggest land realtor in the area, talked to him and his appraiser, and they both confirmed the 30% rule. If that's not the case, that would be GREAT! Just want to know for sure before I get myself down this road again.
"we learned that banks can't appraise acreage for more than 30% of the total value of the property." Not true at all. For bank loans and secondary market conventional loans there is no such 30% requirement. Not sure about specific gov't loans (FHA/VA/USDA). You could run into appraisal problems if there aren't other sales in your area that are on similar acreage though. If there are 10+ acre sales of similarly sized homes as your it should not be a problem.
Do both the tracts have their own access? If so, you could sell either parcel in any order. If the 13 is land locked then you are probably not going to be able to sell it separately from the parcel with the home.
From various appraise threads this is an ongoing problem. And there are all sorts of lender directives.
"we learned that banks can't appraise acreage for more than 30% of the total value of the property." Not true at all. For bank loans and secondary market conventional loans there is no such 30% requirement. Not sure about specific gov't loans (FHA/VA/USDA). You could run into appraisal problems if there aren't other sales in your area that are on similar acreage though. If there are 10+ acre sales of similarly sized homes as your it should not be a problem.
Do both the tracts have their own access? If so, you could sell either parcel in any order. If the 13 is land locked then you are probably not going to be able to sell it separately from the parcel with the home.
Yes, both tracts have their own access. The reason the appraiser said to sell the land first was because he felt we might get stuck with the land and not be able to sell it and wouldn't have the house anymore to help sell it.
TimtheGuy, please don't take this question as condescending, as I don't mean it this way at all, but are you a realtor, appraiser or lender? I'm none of these but when I got the first appraisal, I called the bank to complain about the price and this is what they explained to me. Then I called the biggest land realtor in the area, talked to him and his appraiser, and they both confirmed the 30% rule. If that's not the case, that would be GREAT! Just want to know for sure before I get myself down this road again.
No problem, yes I am a mortgage lender. There is no 30% rule in general. Specific lenders can put their own 'overlays' on top of the actual rules and guidelines, but I have never run into such a rule and I have dealt with multiple lenders and overlays. Appraisers and real estate agents are not good sources for lending guidelines. Is any of the acreage tillable? Now that can be a problem. As mentioned there could be such a rule on loans directly backed by the gov't (FHA/VA/USDA). I haven't done those loan types for a few years, so I'm not fully up to speed on them. Even when I did them, I never heard of the 30% rule and I have and still do lots of rural lending.
Are there good high acreage comparable sales in your area?
Yes, both tracts have their own access. The reason the appraiser said to sell the land first was because he felt we might get stuck with the land and not be able to sell it and wouldn't have the house anymore to help sell it.
Are acreage lots marketable in your area? The bare parcel is build-able correct?? If so, I don't see any reason why it would matter which you list/sell first. I would list them both separately at the same time unless say the pole barn is on one parcel and the home on the other OR the well and septic is on one and the home on the other, etc.
If it is going to be sold as a separate lot, I don't see what ties it has to the parcel with the house at all.
No problem, yes I am a mortgage lender. There is no 30% rule in general. Specific lenders can put their own 'overlays' on top of the actual rules and guidelines, but I have never run into such a rule and I have dealt with multiple lenders and overlays. Appraisers and real estate agents are not good sources for lending guidelines. Is any of the acreage tillable? Now that can be a problem. As mentioned there could be such a rule on loans directly backed by the gov't (FHA/VA/USDA). I haven't done those loan types for a few years, so I'm not fully up to speed on them. Even when I did them, I never heard of the 30% rule and I have and still do lots of rural lending.
Are there good high acreage comparable sales in your area?
We are zoned Agricultural for the land. There's about 8 acres that are flat but I don't think any owner has ever farmed it. Most just had cattle or horses, primarily horses. The loan that our original buyers were getting was a VA loan. But I talked to 4 other appraisers in our area and explained the deal and they all thought she gave a fair appraisal and they all acted like they knew of this 30% rule. Now I'm really confused. Comps are pretty hard to come by for this property/area within the appropriate distance a comp should be.
We are zoned Agricultural for the land. There's about 8 acres that are flat but I don't think any owner has ever farmed it. Most just had cattle or horses, primarily horses. The loan that our original buyers were getting was a VA loan. But I talked to 4 other appraisers in our area and explained the deal and they all thought she gave a fair appraisal and they all acted like they knew of this 30% rule. Now I'm really confused. Comps are pretty hard to come by for this property/area within the appropriate distance a comp should be.
Find a 20% down conventional buyer.
I know...easier said than done.
There are conventional mortgages and there are bank loans. Your buyer may not be able to get a conventional mortgage, but someone with good credit can talk to their local banker to see if a different type loan is available. That is how I purchase my farm under similar circumstances (land worth much more than house). And I volunteered to put down 20%, which I think should be mandatory anyway.
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
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You might try talking to a regional or local bank that doesn't sell their mortgage portfolio and see if you can find one ahead of time that will make a loan.
We recently had a home in the area on 457 acres that was having a hard time finding a lender and the agent finally found a regional bank to make the loan.
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