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allocation method question

Discussion in 'Newbies/Appraiser WannaBe' started by Carmella, Aug 28, 2007.

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  1. Carmella

    Carmella Junior Member

    0
    Aug 28, 2006
    Professional Status:
    Licensed Appraiser
    State:
    Virginia
    question......??


    why is the allocation method rarely used in determining land value?

    is the answer because there are no improvements on the subject property?

    thanxx.
    joey:new_newbie: :new_newbie: :new_newbie: :new_newbie:
     
  2. Joyce Potts

    Joyce Potts Elite Member

    5
    Feb 6, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    Florida
    Good morning, early bird!

    Typically the terms allocation or extraction when used in an appraising context is generally associated with extracting or allocating the land value from an improved sale.

    That said, you can certainly 'extract' adjustments when doing vacant land when pairing sales for size, topo, lakefrontage, slope, view and things of that nature, IMO.
     
  3. Joker

    Joker Elite Member

    0
    May 28, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Ohio
    Why?
    Because many appraisers don't understand it and there are often easier (and more supportable) ways to arrive at land value.
     
  4. SANDY

    SANDY Senior Member

    0
    May 17, 2007
    Professional Status:
    Appraiser Trainee
    State:
    Florida
    Oh oh get ready for a head bangin!!!
     
  5. Head Surfer

    Head Surfer Administrator Staff Member Founder Moderator

    11
    Jan 4, 2002
    Professional Status:
    Retired Appraiser
    State:
    Florida
    Not!

    The Newbie Forum is for newbies and trainees to ask their questions.

    Keep in mind that some of these people have NO appraisal experience and are just starting to study for the test. Many don't have a mentor yet.

    So...appraisers can either answer the questions or pass on this forum. But if they decide to answer the questions, I expect them to be answered in a friendly manner.

    Remember, everyone was new once, and there are no dumb questions. The only dumb question is those that are never asked.
     
  6. incognito

    incognito Senior Member

    0
    Jul 14, 2005
    Professional Status:
    Certified General Appraiser
    State:
    Florida
    The allocation and extraction methods (similar but different methods) are actually used quite frequently in residential appraising. Many market areas are 100% developed, with no vacant land, and therefore no vacant land sales. St. Petersburg, FL is 100% improved, I'm told, and land sales do not exist. In my area, all canal front sites are developed. Usually, the next best method of estimating land value, lacking comparable sales, (albeit usually less reliable) are the abstraction and/or allocation methods.

    It is easy to do. Read up on it in a good appraisal text...
     
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