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Outlot Appraisal

Discussion in 'Commercial/Industrial Appraisals' started by justinschroeder, Sep 27, 2011.

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  1. justinschroeder

    justinschroeder Sophomore Member

    0
    Sep 13, 2007
    Professional Status:
    Certified General Appraiser
    State:
    Illinois
    I have been asked to appraise a 1 acre outlot in a residential area that has a sewer and drainage easement on the whole parcel which limits its use to only greenspace. The owner can garden it and/or landscape it with "small" shrubs and flowers. There are no sales of just outlots that I could find and when talking to developers they give them no value and simply deed them over to the buyer of the buildable lot connected to them. I did find sales of lots with outlots and compared them to the sales of just lots without outlots and found they sold for similar prices making the developers comment true. So I have support to say the outlot has no market value but it also made me think that its kind of like a conservation easement in that someone can use the land for recreation. I realized conservation easements are typically large tracts of land that can be hunted which mine cannot but the they have a value. I am looking for any thoughts or if any one has had a similar situation.
     
  2. JamesRockford

    JamesRockford Senior Member

    0
    Oct 22, 2010
    Professional Status:
    Certified General Appraiser
    State:
    California
    What is the purpose of the appraisal and if it's worth $0 why would anyone pay $500+ for an appraisal report? :huh:

    Waste of money...
     
  3. Michael S

    Michael S Senior Member

    7
    Mar 18, 2009
    Professional Status:
    Certified General Appraiser
    State:
    New Mexico
    Sounds like you've got it pretty much wrapped up. I'd think there might be some value to a certain buyer. But realistically unless you're looking to start a big garden I don't see much more value in that than if it was just green way or other open space in the neighborhood. The property taxes and maintenance probably balance out the minimal benefit of having some extra land.

    Interviewing buyers of some of those homes with outlots might provide some more insight. If this is a typical ponding type area that's below grade and has standing water at times, I could easily see there being no value.
     
  4. justinschroeder

    justinschroeder Sophomore Member

    0
    Sep 13, 2007
    Professional Status:
    Certified General Appraiser
    State:
    Illinois
    The city is the one who wants the appraisal so they can try to buy it from the owner for a road widening project.

    The road is at the opposite end of the house and is buffered by a row of trees along a creek, so the new road will not affect the houses value.
     
  5. Michigan CG

    Michigan CG Moderator Staff Member Moderator

    92
    Nov 1, 2006
    Professional Status:
    Certified General Appraiser
    State:
    Michigan
  6. JamesRockford

    JamesRockford Senior Member

    0
    Oct 22, 2010
    Professional Status:
    Certified General Appraiser
    State:
    California
    The city most likely has the power of eminent domain, so they can condemn it. They will have to pay "market value" for the taking though. Sounds like a $2,500 appraisal report for a $500 piece of land to me. :blush:
     
  7. CANative

    CANative Elite Member

    61
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    It may have some public interest value. The government agency may pay more than market value to avoid potential transaction and litigation cost that would be required in condemnation. Did you client include the type of value they required?
     
  8. justinschroeder

    justinschroeder Sophomore Member

    0
    Sep 13, 2007
    Professional Status:
    Certified General Appraiser
    State:
    Illinois
    They asked for market value. I assume they will show it to the owner and say this is the market value we will give you this much more but I know you should never assume...oh wait we kind of do that all of the time.
     
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