i am needing some advise here...

the house is in a new subdivision...1 acre lot. looks to be completed and lived in. the house is about half burned down. so it has some walls up and the whole 2nd floor is gone..the septic and water are to the house and it is near the entrance to the subdivision..

how would you go about this one? lot value only? partial home since it has water and septic on it?

thanks!

This BPO is stranger than any I have done. I will be very interested in knowing the answer to this. During hurricane Rita here in Houston area, I watched a newly renovated shopping center directly across the street burn while fire department fought it during the high winds. Rain was so thick you could not see firemen, but chunks of burning debris were blowing everywhere.

I mention this because, now, 1/2 the shopping center is in neat piles of rubble safely fenced off waiting to go into containers, while 1/2 remains in what looks like perfect condition, including store displays. However, stores in good section are not open, since the electrical is probably non-existent plus obvious safety hazard.

Moving on to your situation--I guess the answer lies in whether or not the remaining property can be saved, or whether it will be a total tear-down. If you cannot find the answer, then maybe you can fall back on something like "I based my value on the asumption that....." or "unable to determine....". I know you hate doing that, but sometimes we don't have enough info on the property. Would that be an option if you cleared it through your client first--they could agree or pull the order? It would not be your first choice, but it would be something to put in front of your client which they could use to determine their next step. Let's face it - only an inspection of the property by the correct professionals can determine how much damage has been done & what it will take to put property back together. You can't really be expected to tell them what it is worth now since you do not have access to those inspections. I have had to do this once, on a totally ragged out property. This is more complicated for sure. Hope someone with better knowledge in this area posts feedback.

Darlene

i sent a message to the bank and asked them what they wanted me to do. i have had to do a bpo on a burned out doublewide before...i just did lot value only on it. this one is different...i am not a builder so i don't think that any of the house can be saved...there is nothing in the house...walls are gone inside, etc. just was wondering what everyone thought. there are a lot of new homes surrounding it. if the foundation is still good i would think that it would be worth a little more than a vacant lot since all of the utilities are there and the septic has been put in...thoughts?

I've done BPO's a few burned Houses. I would value the lot and then the cost of pouring a slab. If the building is still structurally sound I would take that into account as well. If not, then I would take into account the cost of removing the building.

Ah, removing the debris--did not think about that.

Someone told me the heat from fire would have an impact on the slab being reusable. Griz, is that what you meant by cost of pouring a slab? In Dawn's case, top part of house took the heat, so there is a chance slab and some of the plumbing pipes are not damaged. Dawn thinks maybe another house could be built on top of slab using the same plumbing hookups. A potential buyer would have to have kitchen & bathrooms in same place, but interior walls could be adjusted somewhat. Might not be a problem if slab is reusable. If that is case, would you reach a repaired value by deducting slab and plumbing from cost of rebuilding entire home. Let's face it...we do these types BPO's for the challenge, not for the $40. We're BPO nerds. Ha,ha.

we are not on slabs here...crawl spaces

The heat normally will not affect the integrity of the slab unless the fire was extremely hot and of long duration. I have completed a number of BPOs on burned and partially burned homes and what I do is a land bpo and then adjust the value upwards. If the house has any age to it, the value of the remaining portion will basically be the structural members. The interior sheet rock, flooring, is distroyed from water and the affects of the heat and odor. When considering this and the removal cost of the distroyed portion will offset much of the residue value. One estimate recently on a 2200 SF house that completely burned down had a cleanup cost of $15,000. A new home was built on the same slab w/o issues.

we don't have slabs here...most homes are on crawl spaces...very few homes here are on slabs...this one is on a crawl and to my understanding if it is on a crawl then you are not stuck with plumbing in one certain place...since it is not "cemented" in then you could essentially move it around. i think that you might be close on the cleanup costs...the house was close to 2200 sq. ft.

So you do have something there that can be worked with. Sorry I was so slow on the draw. Now I see that it is better than an undeveloped lot. Still have lines running to house and driveway. Plumbing could be modified if buyer wanted different floor plan. I am shocked at cleanup cost--but that stuff has to be hauled somewhere and that is probably a lot of the cost. Thanks to Griz & Gig em cause I was no help at all.

if the lots are going for $30K would you say $60K or so for the lot value only?

Dawn, do you mean $30 for undeveloped lot, $60K for lot, plumbing lines, driveway, and whatever fencing and landscaping remains...

YUP

Okay, that's what you mean. Let's look at it broken down. These are just my figures.

$30,000 Lot
$ 2,000 Driveway - double wide & holds 2 cars in each lane.
$ 2,500 Water lines & sewer line to house.
$ 2,500 Fence
$ 3,000 Trees and shrubs that survived and won't have to be dug up during construction of new house.
$ 500 Sidewalk from street to front door.

Assuming all that is still intact & I did not overlook anything, I would say $40-$45 for the lot value if it was in Houston, adjusted up or down depending on quality of work/qualifications of contractor. I'm taking prices I have seen and kind of adjusting them if it's been a while. Very unofficial, believe me. Don't know how Houston stacks up to Richmond in pricing for the items listed.

Another point, if property is landscaped around fence line and other areas, and all that survived, then lot would be more desirable because people building on it would not have to wait on trees, etc. to grow. At least I would appreciate that.

Anyway, maybe this is a place to start... somewhere between my $40K & your $60K unless others have better feedback.

One thing we have not thought about...would a residential lot with driveway & plumbing turn off some buyers who wanted to build their dream home and would not trust someone else's plumbing? I personally would consider it a jump start.

good thought...i would not buy it...i would tear it all out and start over...then i would not even pay $30K for it...when i can get one for $30 and have to do half the work...had not thought of it that way...

Wow, we should all collaberate on a book called "BPO's from Below" (get it?) and sell it to new agents. That would scare them off and we wouldn't have any competition.