Is this a legit way to calculate the value of land?

[AbbyStone]

I didn't appraise it, but I am in Washington State. Your comments leave so many questions. First, where do you live where you can buy a buildable lot for $3200?

The best method for valuing land is the Sales Comparison Approach. Finding land sales is the best method. Compare them on a price/SF, price/Acre, or price per lot. When that isn't possible extracting the land value out of an improved property is possible.

What were the exact comps used? How much did they sell for and what was the correlated value for your property.

Using a 3200 SF land comp for a 60,000 SF subject is not ideal at all, but I have certainly compared 6000 SF lots to 43560 SF lots, you just have to be confident in your size adjustment. I recently did it and adjusted a property from $80,000 to $96000 for that difference in size.

If the comps were really bad you could call another appraiser and pay them $100 to feed you local land sale comps. It may give you an idea if this appraiser really missed sales. If there are no recent sales go back further in time, go out geographically, or do extraction.

I don't know how to determine if the lots are buildable, but it is a small agricultural community where there is little demand.

Comp #1 65k adjusted to 53k. Comp #2 60k adjusted to 54k. Comp #3 82k adjusted to 79k. Comp #2 is the only one with a comparable size lot.

 

[AbbyStone]

You can post the grid if you want, but make sure to redact the appraisers name and firm and your own property identification.

Is your property not subdividable? What is the minimum lot size in the zoning?

I don't know if it would be subdividable or not. Appraiser challenged me on that point too, asking me if it was sub dividable. How would it affect the value if it were sub dividable? If it's something that would really matter I could try to find out...or is that something the appraiser should have determined and put in her report? The smallest lots are 5300 sq ft.

 

[AbbyStone]

Actually, it just occurred to me, there are 12 lots on the block and we can only buy 9, the other 3 belong to someone else. Does that indicate right there that the lots are subdividable, since there are two different owners? Also, the appraiser seems to think we are buying the entire block, which would be more like 2 acres, not sure if that is of any significance whatsoever.

 

[NachoPerito]

You could be talking about city lots rather than tax parcels. Only the local jurisdiction will know how many lots you can divide your property into and how many houses you can put on them. This may make it worth more, but I don't know. Most residential appraisers can't appraise land that is subdividable. They aren't qualified. They would need a general certified licence. It may be worth more it it is subdividable, but that is a highest and best use decision.

 

[AbbyStone]

So I had sent the appraiser a message yesterday trying to clarify how not being able to have a lot of livestock made the property worth close to nothing when the comparison property also wouldn't allow a lot of livestock. She responded that I was confused about the adjustments and that there were many factors that affected them, such as highest and best use, market demand, what is typical, etc. And that appraising is a combination of opinion and science and she couldn't give me mathematical computation. She ended by saying she couldn't explain it any better than that.

Is this normal, to get this kind of response from an appraiser? I just can't understand WHY she can't explain it.

 

[NachoPerito]

So I had sent the appraiser a message yesterday trying to clarify how not being able to have a lot of livestock made the property worth close to nothing when the comparison property also wouldn't allow a lot of livestock. She responded that I was confused about the adjustments and that there were many factors that affected them, such as highest and best use, market demand, what is typical, etc. And that appraising is a combination of opinion and science and she couldn't give me mathematical computation. She ended by saying she couldn't explain it any better than that.

Is this normal, to get this kind of response from an appraiser? I just can't understand WHY she can't explain it.

I am surprised she is communicating with you at all to be honest. It is generally necessary to go through the appropriate channels when questioning an appraisal that is being used for financing.

It isn't surprising she is giving you a vague answer. There probably isn't some numerical proof behind the adjustment. Appraisers are expected to complete appraisals too fast for too cheap to go deep into each adjustment IMHO (I do commercial appraisals).

 

[AbbyStone]

I am surprised she is communicating with you at all to be honest. It is generally necessary to go through the appropriate channels when questioning an appraisal that is being used for financing.

It isn't surprising she is giving you a vague answer. There probably isn't some numerical proof behind the adjustment. Appraisers are expected to complete appraisals too fast for too cheap to go deep into each adjustment IMHO (I do commercial appraisals).

Ok, well, that helps to know! I am pursuing it through official channels as well; I just had this naive idea I could speed the process along if I just talked to her myself.

 

[Michigan CG]

I don't know if it would be subdividable or not. Appraiser challenged me on that point too, asking me if it was sub dividable. How would it affect the value if it were sub dividable? ...........

The appraiser asked YOU if it was able to be subdivided? The appraiser is REQUIRED to know that as that is part of Highest and Best Use. Geez. I am going to guess that the AMC charged you an enormous fee and gave the appraiser half the fee. I am also going to guess that the appraiser did not look up zoning, did not look up zoning regulations and has no clue about the potential uses of the land.

Your first post and subsequent posts are a little confusing. Please list the size of the lot(s) you are buying, and the sizes of the comparables along with the sales prices of those comparable lots.

 

[Terrel L. Shields]

I don't know how to determine if the lots are buildable, but it is a small agricultural community where there is little demand.

There probably aren' t many sales. So...as a comparison, what does the assessor say the Land component of your taxes is worth?

 

[CindyR]

another question about this zoning issue. what is the exact zoning classification and zoning description shown in the report? Does it just say 'single family residential' with nothing more specific? Can you go to a city or county website and see what it shows as the zoning classification for the property? and right after that zoning information is the Highest & Best Use question. What is the answer to the HBU in the actual appraisal report?