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  #1  
Old 06-09-2007, 11:28 AM
lmichels lmichels is offline
 
Join Date: Feb 2007
State: Washington
Professional Status: Certified Residential Appraiser
Posts: 165
Default Non-buildable Land

Here's a new one for me. A non-profit asked me to appraisal a parcel in an abandonned subdivision, to determine what they should sell it for. The subdivision was platted in the early 90's (I think - county records are unclear). The 1st phase was developed. The 2nd phase was not - all the lots are vacant, no streets, no water, no sewer, no utilities of any kind. This is outside city limits, so the county has since rezoned it to 5 acre min. If you have 2.3 acres of existing parcels, you can build 1 SFR with well and septic. Over the last 15 years, a few people have started accumlating multiple lots to try and meet the 2.3 acre min. (each platted lot is 5,000-10,000sf). This appears to be the only market for the subject - neighbors trying to collect enough lots to build a home. Recreational use of the land is pretty sketchy - nice views, but no vehicular access at this time. I suppose you could camp on it, plant a garden (but with no water), thats about it.

I've got a fair amount of market data, and a reasonable understanding of the neighborhood. But I would love to hear advice from someone who has appraised non-buildable lots.

By the way, previous sales of other non-buildable lots in the development range from $441 at county tax auction to $10,800 for 9 lots from 1 neighbor to another. If possible, I don't want to charge the non-profit an appraisal fee that is more than the property is worth.
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  #2  
Old 06-09-2007, 12:40 PM
Jerry Bone Jr's Avatar
Jerry Bone Jr Jerry Bone Jr is offline
 
Join Date: Feb 2004
Location: Salem, Oregon
State: Oregon
Professional Status: Licensed Appraiser
Posts: 1,601
Default

If it were here in Oregon, we could put another kink in your appraisal, due to Measure 37.
  #3  
Old 06-09-2007, 01:04 PM
lmichels lmichels is offline
 
Join Date: Feb 2007
State: Washington
Professional Status: Certified Residential Appraiser
Posts: 165
Default

I'm dual licensed WA and OR. I hate Measure 37 (not because I necessary disagree with it, but because it makes my job so much nastier). But I was under the impression that Measure 37 didn't apply to health related regulations. The reason you need 2.3 acres, according the county planner, is because of safe separation between well and septic on the site, to comply with EPA clean water standards.
  #4  
Old 06-11-2007, 07:24 AM
Appraisal Coach's Avatar
Appraisal Coach Appraisal Coach is offline
 
Join Date: May 2007
Location: Boston & Martha's Vineyard
State: Massachusetts
Professional Status: Certified General Appraiser
Posts: 75
Default

Great problem!

You know this gets back to basics. Implicit in the definition of "market value" is there needs to be a market...an ample pool of buyers and sellers from which you can observe and measure. The reality is is that many things simply have no market...they sell, but not in a way that appraisers can measure in a handy refined way. The only buyers (at least for now) for such parcels are abutters...or as part of an assemblage.

This is part of the whole price vs value deal.

That being said, it sounds like these things are selling for $400-$1000 each ....end of story. You might not be able to tighten it up any better.

Sounds like under the auspices of a consulting assignment you could report all the transactions for such parcels, provide a range. Its not market value, it could be characterized as value to an abutter or more accurately "price being paid".

This is providing good service to the client.


There is a way to arrive at the market value by determining the pro rata share of that parcel to a buildable whole taking into account all the steps needed to get a permit, entrepreneurial profit, etc, etc.....

The trouble is, as you have already determined, is that it would cost a fortune for you to figure it out.....BUT even worse, its purely theoretical and may have nothing to do with what folks are paying.
Waste of time, waste of money, unhappy client (but it would be USPAP compliant, which is the noose hanging around sooooo many appraisers today..all this fear, I don't get it)

You can always work the problem backwards as a consulting assignment. If they get an offer for it, you can evaluate the offer for them to help determine if its reasonable, using your knowledge and skills.

An appraiser can do more than opine on value....theres a whole world of services you can provide. You are an expert in Real Property matters, spread your wings, you have the right intuition.

Good Luck...let me know how it turns out!

Ed
Appraisal Coach


Do right by your non profit client, they will appreciate it.
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