Real Estate Appraisal Forum

appraisersforum.com logo
The Premiere Online Community for Real Estate Appraisers!
 Fastest Way to Find a Real Estate Appraiser Enter Zip Code:
 
 
Go Back   Appraisers Forum > Real Estate Appraisal Forums > Urgent - Help Needed
Register Help Our Rules Calendar Archives Mark Forums Read


Closed Thread
 
Thread Tools
  #1  
Old 11-03-2011, 11:20 AM
Sean Sutton Sean Sutton is offline
 
Join Date: Jun 2006
Location: Springfield
State: Missouri
Professional Status: Certified Residential Appraiser
Posts: 611
Default Where do you adjust for the cost to raze.

a house. I am appraising a lot with an old house on it...that is in disrepair and not able to generate any income. The lot is zoned Heavy Manufacturing and is likely going to be purchased by a neighborhing industrial facility and used for additional parking. It is a long skinny lot on an inside street with a hodge podge mix of homes, commerial improvements, etc.

If I have determined the HBU is for commerical use, after getting the estimates to raze the house, where do I make the adjustment? (to my comps? If so, how do I break it down into an adjustment that can be applied the the comps? or do I just knock if off the end in my final reconciliation?).

My land sales are all vacant unimproved commercial lots with the same zoning as my property in the same area.

Also, in this scenario, do I actually state that the HBU is for parking for an adjascent property?

Thanks for your help.
Sponsored Links

  #2  
Old 11-03-2011, 11:44 AM
Mountain Man's Avatar
Mountain Man Mountain Man is offline
 
Join Date: Jan 2002
Location: North of the ATL.
State: Georgia
Professional Status: Certified General Appraiser
Posts: 15,008
Default

I'd write a section after the market approach using Marshall & Swift data on the estimated cost to raze the improvements.... the market approach indicates a value of $XXX minus demo cost as support above by Marshall & Swift equals a total of $XXX.

As for highest and best use, you have the 4 test: Legally Allowable, Physically Possible, Financially Feasible, and Maximally Productive. You'll analyze the subject "as if vacant" AND as improved. So it really depends on the zoning and if the subject is large enough to support a manufacturing use. This is something that is difficult to do on a form report, this ain't your subdivision residential lot, and would be best reported in a narrative format.
  #3  
Old 11-03-2011, 11:50 AM
David Mescon David Mescon is offline
 
Join Date: Nov 2009
State: California
Professional Status: Retired Appraiser
Posts: 2,534
Default

Sean, I mean no offense, but it sounds as if this assignment is a bit beyond your level of expertise. It is almost certainly beyond your level of licensure. Perhaps you may want to consider associating with an experienced local CG for this one. Good luck!
  #4  
Old 11-03-2011, 12:39 PM
Sean Sutton Sean Sutton is offline
 
Join Date: Jun 2006
Location: Springfield
State: Missouri
Professional Status: Certified Residential Appraiser
Posts: 611
Default

Quote:
Originally Posted by David Mescon View Post
Sean, I mean no offense, but it sounds as if this assignment is a bit beyond your level of expertise. It is almost certainly beyond your level of licensure. Perhaps you may want to consider associating with an experienced local CG for this one. Good luck!
Not sure why you even bothered to post...i have a sup....just not sure I agree with her approach on this issue....go back to being retired please...
  #5  
Old 11-03-2011, 12:42 PM
Sean Sutton Sean Sutton is offline
 
Join Date: Jun 2006
Location: Springfield
State: Missouri
Professional Status: Certified Residential Appraiser
Posts: 611
Default

Quote:
Originally Posted by Mountain Man View Post
I'd write a section after the market approach using Marshall & Swift data on the estimated cost to raze the improvements.... the market approach indicates a value of $XXX minus demo cost as support above by Marshall & Swift equals a total of $XXX.

As for highest and best use, you have the 4 test: Legally Allowable, Physically Possible, Financially Feasible, and Maximally Productive. You'll analyze the subject "as if vacant" AND as improved. So it really depends on the zoning and if the subject is large enough to support a manufacturing use. This is something that is difficult to do on a form report, this ain't your subdivision residential lot, and would be best reported in a narrative format.
HBU is done...this is one a narrative....are you saying to just deduct the cost to raze off of the market value being indicated from my non improved sales? In this case I do feel that the cost is very near the market reaction.
  #6  
Old 11-03-2011, 01:22 PM
Michael S Michael S is offline
 
Join Date: Mar 2009
Location: Albuquerque
State: New Mexico
Professional Status: Certified General Appraiser
Posts: 920
Default

I would treat it like defered maintenance and deduct it as a line item at the end. I imagine it's not too much, $10-20,000.

When I have comps that were purchased for the land value and the improvments were razed, I deduct the cost of the demolition before it even goes in the grid. The grid shows the purchase price and then the adjusted purchase price for onsite/offsite work. I.e. cost of demolition if there were improvements, or the specific cost to extend utilities if the subject and other comps have utilities.
  #7  
Old 11-03-2011, 02:32 PM
Sean Sutton Sean Sutton is offline
 
Join Date: Jun 2006
Location: Springfield
State: Missouri
Professional Status: Certified Residential Appraiser
Posts: 611
Default

Quote:
Originally Posted by Michael S View Post
I would treat it like defered maintenance and deduct it as a line item at the end. I imagine it's not too much, $10-20,000.

When I have comps that were purchased for the land value and the improvments were razed, I deduct the cost of the demolition before it even goes in the grid. The grid shows the purchase price and then the adjusted purchase price for onsite/offsite work. I.e. cost of demolition if there were improvements, or the specific cost to extend utilities if the subject and other comps have utilities.
My subject is inferior to all of my comps because it will have to endure the cost of razing the old house. I am "minusing out" the comps because they are superior....but how? I am adjsuting everything on a sales price per sf.
  #8  
Old 11-03-2011, 02:33 PM
David Mescon David Mescon is offline
 
Join Date: Nov 2009
State: California
Professional Status: Retired Appraiser
Posts: 2,534
Default

Quote:
Originally Posted by Sean Sutton View Post
a house. I am appraising a lot with an old house on it...that is in disrepair and not able to generate any income. The lot is zoned Heavy Manufacturing and is likely going to be purchased by a neighborhing industrial facility and used for additional parking. It is a long skinny lot on an inside street with a hodge podge mix of homes, commerial improvements, etc.

Let's see smart guy, you state what the property will likely be used for, but nowhere do you indicate the probable future use will be the HBU.



If I have determined the HBU is for commerical use, after getting the estimates to raze the house, where do I make the adjustment? (to my comps? If so, how do I break it down into an adjustment that can be applied the the comps? or do I just knock if off the end in my final reconciliation?).

You must be joking asking these questions - right? Someone with your vast commercial appraisal experience doesn't know how to handle this appraisal 101 problem?



My land sales are all vacant unimproved commercial lots with the same zoning as my property in the same area.

You mention the zoning, but what about the GP, since that will generally trump the hard zoning designation?



Also, in this scenario, do I actually state that the HBU is for parking for an adjascent property?



Is a parking lot the HBU of the subject property? You allude to that but do not actually state that. Go back to elementary school and learn how to spell simple three syllable words please.

Thanks for your help.
..........
  #9  
Old 11-03-2011, 02:46 PM
Sean Sutton Sean Sutton is offline
 
Join Date: Jun 2006
Location: Springfield
State: Missouri
Professional Status: Certified Residential Appraiser
Posts: 611
Default

Quote:
Originally Posted by David Mescon View Post
..........
Your an *********....crawl back to your hole.....

After all your gabbing...you still can't answer my question....which must mean that you don't know either. What a sore ole scab!
  #10  
Old 11-03-2011, 02:47 PM
David Wimpelberg's Avatar
David Wimpelberg David Wimpelberg is offline
 
Join Date: Mar 2005
Location: Hamptons, NY
State: New York
Professional Status: Certified General Appraiser
Posts: 15,004
Default

Quote:
Originally Posted by Sean Sutton View Post
I am "minusing out" the comps because they are superior....but how? I am adjsuting everything on a sales price per sf.
You stated:

Quote:
Originally Posted by Sean Sutton View Post
My land sales are all vacant unimproved commercial lots with the same zoning as my property in the same area.
Apples need to be compared to apples, not oranges. I would compare the subject property, as if vacant, to the sales. Once I determined the value of the subject lot, I would then adjust for the cost of razing the improvements.

The cost of razing cannot be adjusted based on an adjustment per square foot of land area. This is because the adjustment is independent of the size of the lot. It doesn't matter whether the lot is 5,000 square feet or 5,000 acres in size, the cost of razing is the same.
Sponsored Links

Closed Thread


Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump




Copyright © 2000-, AppraisersForum.com, All Rights Reserved
     Terms of Use  Privacy Policy
AppraisersForum.com is proudly hosted by the folks at AppraiserSites.com

Fastest Way to Find a Real Estate Appraiser Enter Zip Code:
Partner Sites:
AppraiserUSA.com - National Appraiser Directory AllDomainsUSA.com - Domain Name Registration
DeadbeatListings.com - Deadbeat ListingsAppraiserSites.com - Web Hosting for the Professional Real Estate Appraiser
Find FHA Appraisers - FHA Appraiser Search Commercial Appraisers - Commercial Appraiser Search
Relocation Appraisal - Find Relocation Appraisers Domain Reseller - Business Opportunity
Home Security Buzz - Home Security Info Radon Testing - Radon Gas Info
My Medicare Forum - Medicare Info Stop Smoking Help - Help Quitting Smoking
CordlessPhoneStore.com - Great Cordless Phones AndroidTabletCity.com - Android Tablet Computers

Follow AppraisersForum.com:          Find us on Facebook            Follow us on Twitter


All times are GMT -5. The time now is 11:53 AM.

SiteMap: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93