Newz: HUD Layoffs – Including FHA, GSE Selling Guide Updates
February 21, 2025
What’s in This Newsletter (In Order, Scroll Down)
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LIA Ad: Should I Complete this Assignment?
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Highest and Best Use: A Superpower You Already Possess By Byron Miller, SRA
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High Octane’ Desert Ranch That Boasts Airplane Hangars, Racetracks, and Custom Dune Buggies Hits the Market in California for $15 Million
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Fannie Mae and Freddie Mac’s New Selling Guide Updates: What Appraisers Need to Know. What Data Sources Appraisers Are Using.
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Massive FHA cuts would create dysfunction for mortgage industry, homeowners: ex-official
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Builder Confidence Falls to the Lowest Levels Since May 2024
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Mortgage applications decreased 6.6 percent from one week earlier
Zoning in the Appraisal Process
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Highest and Best Use: A Superpower You Already Possess
By Byron Miller, SRA
Excerpts: Like the Incredible Hulk, my superpower didn’t show itself until stressed. That stress came in January 2020, when Minneapolis became the first major U.S. city to eliminate single-family residential (SFR) zoning, allowing one-to-three units to be built on what were previously (SFR) parcels. Suddenly, there was a lot of confusion in the appraisal community about when and how to perform the highest & best use (H&BU) analysis for the new zoning classification.
As chapter president of the North Star Chapter of the Appraisal Institute, I fielded a flood of questions from residential appraisers to state regulators. One thing I quickly realized was that many of the residential appraisers I spoke with didn’t know the four tests of H&BU analysis.
Let’s revisit the basics: In an H&BU analysis, real estate appraisers determine the most probable use of a property by applying four tests: whether the use is legally permissible, physically possible, financially feasible, and maximally productive. Order doesn’t matter for the first two tests, but it’s essential for the last two. Moreover, appraisers must conduct each of the four tests on the real property as if vacant, and as improved.
Applying each of these tests properly is essential to the valuation process. In many litigation situations where appraiser’s values are far apart, it’s due to H&BU analysis differences.
To read more, Click Here
My comments: Worth reading. The author is a residential appraiser. H&BU is one of my favorite topics! I have done many commercial properties for lenders and non-lenders where H&BU was not the current use. I appraised them at their H&BU.
If you only do residential properties H&BU issues is much less an issue, so you don’t do the H&BU analysis very often. Unfortunately, many of the res appraisers who call me did not think about the relevant H&BU. This article is an excellent reminder. You can get into Big Trouble with H&BU if you don’t know when it is important.
The article has a section titled: Practical H&BU Analysis of the 4 factors with an excellent case study. Interesting appraiser comment worth reading.
Waterfront Home in Boca Raton, FL $25,000,000
