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Old 08-28-2007, 05:42 AM
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Carmella Carmella is offline
 
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Question allocation method question

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
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Old 08-28-2007, 10:06 AM
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Joyce Potts Joyce Potts is offline
 
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Originally Posted by joeyellington View Post
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
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.
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Old 08-28-2007, 10:06 AM
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Why?
Because many appraisers don't understand it and there are often easier (and more supportable) ways to arrive at land value.
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Old 08-28-2007, 10:11 AM
SANDY SANDY is offline
 
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Oh oh get ready for a head bangin!!!
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Old 08-28-2007, 10:41 AM
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Originally Posted by SANDY View Post
Oh oh get ready for a head bangin!!!
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.
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Old 08-28-2007, 11:14 AM
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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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