Discussion in 'Urgent - Help Needed' started by curiousgeorge, Jun 15, 2011.
Ok .. now that I have calmed down .. exactly how did YOU make the site adjustments? We need an answer to that question before we can move forward at all.
Many appraisers adjust $5 to $10 per sq. ft. I made $5 per sq. ft. for average homes, and this is the 1st time I got the question.
Could anyone tell me how to explain the site adjustment? If I calculate from (site value)/(lot size), the number will be very big.
Sorry for my stupid question.
WHEW ... this is gonna be a bad thread .... I think I will back out of it George .. cause I have nothing good to say. Do you have a mentor? What does your mentor say? If no mentor .. how were you taught?
I havent seen the book that says $5 - $10 per square foot is what most appraisers do .... sorry just never saw that book.
So how did you calculate? Would you mind telling me?
It is impossible to answer your question .. the question is how are YOU going to answer the stipulation you have? Tell the truth and tell them you made it up and thats how you adjusted for the site value?
I mean you have to explain what you DID ... its too late to learn how to do it properly .. thats another class and another lesson.
OK. I will.
And I have to add it in every report from now on. So please tell me. Thanks!
First of all, any responder to this question must realize that we all live in different parts of the country and the numbers can be surprising based on our local markets.
It is typical in appraisal practice for a basic site to have a value of $X. For a lot that is larger than typical the value of surplus land (there is a difference in surplus rather than excess) to have a value per unit (acre or SF) that is less than the value of the typical site in terms $/unit (SF or acre).
In my area it is typical for a subdivision lot to sell for $20,000 and the typical lot in a subdivision is about 12,000 SF or $1.66/SF. A larger lot may sell for more, but not at the rate of the typical lot. The larger lot may be 18,000 SF but only sell for $25,000 which is $1.39/SF.
Now if you take the utility provided by the 12,000 SF lot at $1.66/SF and then look at the additional area you have a contributory value of $5,000 and $0.83/SF for the additional land area.
The premise is the market accepts that a 12,000 SF lot provides the utility for a single-family home and most buyers are satisfied with the 12,000 SF lot but would pay more for the additional site area but not at the rate that exceeds the needed utility.
A pound of elephant sells for less than a pound of mice.
Uh, George, thats a market derived adjustment, not plucked off a cheat sheet your mentor gave you. If you can't explain it, you're already in big trouble.
The question is where does your adjustment come from and how did you derive it?