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Site Adjustments

Discussion in 'General Appraisal Discussion' started by GARY TRENT, Mar 11, 2010.

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  1. GARY TRENT

    GARY TRENT Sophomore Member

    0
    Dec 22, 2006
    Professional Status:
    Licensed Appraiser
    State:
    Indiana
    I was talking to a fellow appraiser today, and we got on the subject of site adjustments. He said that all things being equal, he adjusts 50% of the average price per acre in the sales grid. So if the average is 10k and say the subject is a 2 acre site and the comp is 1 acre site he is adjusting 5k. I feel that the adjustment should be 10k. Which is right? Thanks
     
  2. CANative

    CANative Elite Member

    205
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    I think it should be $25,000. Or maybe nothing. Not sure.
     
  3. Elliott

    Elliott Elite Member

    38
    Apr 23, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Oregon
    It sounds like 'fellow appraiser' has more experience making the
    adjustment than you. Now why would I say that?
     
  4. Tim Hicks (Texas)

    Tim Hicks (Texas) Elite Member
    Gold Supporting Member

    54
    Jan 15, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Texas
    Gee, what do the two lots sell for versus the one acres lots. That search function on the MLS can really be tiresome. It really is just easier to guess.
     
  5. Couch Potato

    Couch Potato Elite Member

    0
    Mar 15, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    I had a supervisor once that insisted on using 10% of the price per acre for site adjustments. Personally, I prefer to analyze a variety of paired sales which differ only in site size to develop an appropriate adjustment for site size. More often than not I find no adjustment is warranted unless the size difference is quite large.

    With a difference of one acre, the adjustment could be 100% of the value of an acre. Then again, for some clients excess land would be excluded from the valuation using a hypothetical condition so no adjustment would be used. The bottom line is only a fool adjusts sites the same way all the time.
     
  6. Terrel L. Shields

    Terrel L. Shields Elite Member
    Gold Supporting Member

    331
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    Land is valued as if vacant and available for its highest and best use. Each site should be valued separately and the adjustment is therefore, dollar for dollar. The collary that larger sites bring less does not justify an arbitrary 10% or 50% adjustment. The size chart is very likely is logrithmic and will be in the shape of a hyperbolic decline curve...If you are talking about valuing a 5 ac. parcel compared to a 6 acre one, i doubt the unit value is going to vary much.
     
  7. Michigan CG

    Michigan CG Moderator Staff Member Moderator

    229
    Nov 1, 2006
    Professional Status:
    Certified General Appraiser
    State:
    Michigan
    All things are not created equal. Does, in this economy, a 0.5-acre lot draw more value in the market then a 0.4-acre lot? Not in my area.

    Does a 6-acre lot draw more value than a 3-acre lot. Yes, in my area.

    Applying a set percentage value to the site size in not good appraisal practice. I suggest taking all the land sales and putting them in a spreadsheet, create some graphs and see what the market is willing to pay for additional land.

    I have found that with reduced fees and stupid turn time requirements that appraisers no longer have the time to justify what they are doing.

    10% or 50% or what ever is "list adjusting".
     
  8. GARY TRENT

    GARY TRENT Sophomore Member

    0
    Dec 22, 2006
    Professional Status:
    Licensed Appraiser
    State:
    Indiana
    I guess I didn't explain it well enough. If your subject was a 2 acre site and and research of sales in the area showed that the average sale price for a 1 acre lot was 10k and comp 1 was a 1 acre site, you would make a 10k (dollar for dollar)adjustment to it. He said he would only make a 5k adjustment to the comp because he only adjusts 50% of the average value per acre.
     
  9. GARY TRENT

    GARY TRENT Sophomore Member

    0
    Dec 22, 2006
    Professional Status:
    Licensed Appraiser
    State:
    Indiana
    Michigan, what I meant by all things being equal was zoning, etc. Thanks to you, Couch Potato, and Terrel for you replies. What we were disagreeing about was making dollar for dollar adjustment or a percentage of the adjustment.
     
  10. Mike Kennedy

    Mike Kennedy Elite Member

    111
    Sep 28, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    New York
    Does his list also include $2500 for a fireplace:unsure:
     
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