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  #1  
Old 11-13-2009, 07:28 AM
KJR2008 KJR2008 is offline
 
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Default When do you make adjustment for lot size

Just curious on how the more experienced here determine when an adjustment for lot size is made. When in the absence of lot sales, paired sales of improved properties dont offer much in the way of a value trend. Subject is 8,000 SF and the comparables are 6,500 SF, 7,100 SF and 9,700 SF all within the same subdivision, all similar in all aspects other than size, do you make adjustments for the difference?
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Old 11-13-2009, 07:41 AM
leelansford leelansford is offline
 
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When and where the data indicates that the market is paying more or less for variations in size of site, then adjust for what the market is telling you.

There's no "one size fits all" response to your question.
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  #3  
Old 11-13-2009, 07:57 AM
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Mike Kennedy Mike Kennedy is offline
 
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"Subject is 8,000 SF and the comparables are 6,500 SF, 7,100 SF and 9,700 SF all within the same subdivision, all similar in all aspects other than size, do you make adjustments for the difference?"

Alternative look: 0.18 Acre versus 0.15 Acre, 0.16 Acre, 0.22 Acre - same subdivision.

variances 0.03 Acre, 0.02 Acre, 0.04 Acre

questions: do typical buyers in that subdivision really pay a premium for such minimal variances?

current data not fruitful (per OP)

could expand the retrospective time line of closed sales and vacant lots IN that subdivision - adjust for market conditions variance (time).

could identify similar Current & Retro lots and improved sales in competing subdivisions

could also identify current Actives (both lots & improved props) in addition to closed sales

could review prior appraisals done in that neighborhood, and subdivision, as well.

could survey local RE agents to determine market reaction to minimal variance.

could conclude based on the above - the variances are so minimal they have no impact on MV - perhaps street location and view play a role in appeal versus less than 1/10th acre variance.
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Old 11-13-2009, 08:06 AM
leelansford leelansford is offline
 
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Quote:
Originally Posted by KJR2008 View Post
Just curious on how the more experienced here determine when an adjustment for lot size is made. When in the absence of lot sales, paired sales of improved properties dont offer much in the way of a value trend. Subject is 8,000 SF and the comparables are 6,500 SF, 7,100 SF and 9,700 SF all within the same subdivision, all similar in all aspects other than size, do you make adjustments for the difference?

"And another thing..."

As you reflect, do consider that the gross size is not the be-all, end-all.

In some neighborhoods that I frequent, a site of 75' x 150' (11,250 sf) would have a significantly higher value than a site of 50' x 225' (11,250 sf).
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  #5  
Old 11-13-2009, 08:07 AM
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When indicated by the facts, and the market. Example....I did an appraisal of a property on the Ocean Front. The subject was on a lot that was 75x150'. 3 comparable lot sales(yes, I was lucky enough to have lot sales) all sold between $1.3 and $1.5 million. The 3 comparable property sales were as near matched pairs as was possible with the main issue being the lots. Each had lots similar to the subject. The reconcilliation of the lot sales, with current sales of similar sites was that a value of $1million was indicated as some of the sales were well over a year. Then I had a 4th comp property sale that had a double lot (150x150 and sold for almost exactly $1million more than the other propertis. I made a -$1million adjustment. The lender almost crapped their pants, but when I pointed out exactly why, they really could not argue.
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  #6  
Old 11-13-2009, 08:55 AM
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I just pull out my adjustments book that was upated in early 2009. Don't you have one?
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Old 11-13-2009, 09:43 AM
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Jerry Bone Jr Jerry Bone Jr is offline
 
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"When do you make adjustment for lot size?" When the difference is measurable and significant.
  #8  
Old 11-13-2009, 10:19 AM
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When adjust? When I think the market would recognize the difference as
significant to marketability. Haven't been to a BBQ lately where HO's were
bragging about their lot size. But they sure talk about their remodeled
kitchen with marble countertops and their "top chief" appliances.
  #9  
Old 11-13-2009, 10:28 AM
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DMZwerg DMZwerg is offline
 
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Quote:
Originally Posted by Mike Kennedy View Post
could conclude based on the above - the variances are so minimal they have no impact on MV - perhaps street location and view play a role in appeal versus less than 1/10th acre variance.
Yep.
When talking a small percentage or dollar value difference a lot of other factors could be more important: corner lot, cul du sac, "court", backing the wood, backing the retention pond, across from the green space (park, open area, whatnot).

Reexamine and determine if an adjustment is mandated and which factors seem most important.
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  #10  
Old 11-13-2009, 10:39 AM
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Quote:
Originally Posted by KJR2008 View Post
Just curious on how the more experienced here determine when an adjustment for lot size is made.
Did you not get your 2009 BOOK OF REAL ESTATE ADJUSTMENTS? It is updated on a yearly basis and pretty accurate and helps you in making adjustments.



Seriously, you make the adjustments when the market tells you that an adjustments is needed. That is what APPRAISING is all about. There is no way that anyone can answer your question here, as each situation is different.
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