DELTA COUNTY COLORADO LAND VALUE - A BANK IS ABOUT TO GET A SURPRIZE! I began working on a "Broker Price Opinion" today for a property here in Delta County, Colorado. This is a very unique property since there is more than one home on it and it is on several acres. In fact, it is really going to be a tough one because there aren't any real sold comparables or any currently listed comparables, not in the last 3 month, or the last 6 months, or even the last YEAR!
So after talking to a friend that I call the "BPO Queen", she suggested trying a couple of adjoining counties and see if I could find comparables. No luck there either. Oh, one other thing - this property is irrigated farm land. Another kink in the comparable search. I'm starting to think I might have to write a long letter to go with this BPO report. We are in a rural area and the economy, well, you all know what the economy has been like in the last year or so...
After studying the legal description, reading over the Deed of Trust from the county public records site, something just isn't looking right. Then it dawns on me...the bank doesn't have a lien on the water rights...an irrigated farm, which would account for a substantial portion of the original purchase price.
Okay, here comes my disclosure - I AM NOT A ATTORNEY NOR DO I PLAY ONE ON TELEVISION! But my ability to read a deed would cause me to be persuaded that this bank does not have the water rights included in their collateral. The water rights were transfered from the previous seller to the current owner by a Quit Claim Deed. This is not the first time I've seen this happen to a bank. In this part of Colorado, irrigation water rights can make a drastic difference in the value of land. This bank had no idea when they made this loan that they should have included the water rights as part of the collateral. They will know soon...
Water rights are another reason Buyer's need to be represented by a Realtor - but that is another blog for another day.
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