40-30-20-10 rule, aka 25% rule, aka ?

[Ken B]

When I was struggling with it, I asked the AI for someone to call me. The AI guy called went over what I did wrong...said I should study the 510 manual. Then he goes onto to say some people do not need to study very hard, other people need 4 hours a day for two months...his conclusion "...you should study somewhere between 0 hours and 224"

Gee thanks.

I must fall at the higher end of that scale.

Actually, I found Whitmer's material was helpful for all except Income Cap. The 510 book is at home at my study place (kitchen breakfast bar) right now. I'll be finishing up my review of Section 4 tonight and moving on to 5.

My bad was waiting too long after I finished Advanced Applications to sit the Comp Exam. I transitioned from res to commercial and completed much of the MAI coursework before transitioning. While I had no problems at all with any of the courses, it was suggested that I could benefit from some field experience before taking the Comp Exam. So there I was, two years later, looking at the Income Cap module of the Comp Exam thinking "Oh...crap."

If anyone reading is in a similar situation...DO NOT WAIT! As soon as you complete Advanced Applications, get the Comp Exam out of the way. Trust me.

 

[hastalavista]

If anyone reading is in a similar situation...DO NOT WAIT! As soon as you complete Advanced Applications, get the Comp Exam out of the way. Trust me.

I'm taking it next month. Thanks for the advice!

 

[Ken B]

I'm taking it next month. Thanks for the advice!

Something I wish I had not done was complete the exercises in the book in the space provided. I should have completed the exercises on scratch paper. Covering up the answers as I read the questions during my current review is a pain.

 

[Roy Courtney]

The Text "McMichael's Appraising Manual" Fourth Edition - Last copyright 1951 by Mrs. Stanley L. McMchael. 1951 = a long time ago!

Quote "As early as 1866, the first depth-value rule publicized was evolved. In this rule, the front half of a lot was deemed to represent two-thirds of its value. Later, this developed into the well-known 4-3-2-1 rule and other amplifications in which each foot of depth is assigned a percentage of some standard, its value receding as its distance increased from the frontage."

In other words, this "rule" has been around for a while! Not saying whether or not it is applicable in your situation but just that it is not "new".

 

[Kali the Boston Terrier]

If anyone reading is in a similar situation...DO NOT WAIT! As soon as you complete Advanced Applications, get the Comp Exam out of the way. Trust me.

I agree! I took Advanced Apps first then, 510-540...by the time I took the COmp Exam it had been nearly 2 years since I took Advanced.

I too fall at the higher end of the scale with anything math related. Whitmer's tests I just kept retaking them over and over again. I made 4 different copies of each test and every month I would go through and study 510 and take the test. I knew I had it when I would pass Whitmer's test. The thing that always got me were the staggered leased fee and lease hold interest questions...some jack *** leases a property for 100 years at $0.50/SF, next year he leases it for $0.75/SF for 99 years...what is the salt to water content of my drool?

 

[Howard Klahr]

Kali

This relates to the K and J factors with a constant and exponential rate of change

 

[DMZwerg]

The Text "McMichael's Appraising Manual" Fourth Edition - Last copyright 1951 by Mrs. Stanley L. McMchael. 1951 = a long time ago!

Quote "As early as 1866, the first depth-value rule publicized was evolved. In this rule, the front half of a lot was deemed to represent two-thirds of its value. Later, this developed into the well-known 4-3-2-1 rule and other amplifications in which each foot of depth is assigned a percentage of some standard, its value receding as its distance increased from the frontage."

In other words, this "rule" has been around for a while! Not saying whether or not it is applicable in your situation but just that it is not "new".

Given sewers, electrical hookups, etc, I would tend to agree with 4-3-2-1 on the surface but if in widening a roadway the frontage changes and the land is vacant and has equal amenities after as it had before and depending on what the new depth ratio would be it COULD be a moot point.

I have not analyzed it but my "gut" says that significant reduction even in a vacant lot to under a 2/3rd depth to frontage ration could be considered a serious impact.

Let us suppose a vacant lot is 90' wide 180' deep has 5' setbacks on all sides but a 65' minimum setback to the county truck highway. This means that the total sf is 16200sf and usable build area is 8800sf (110'x80').
If the front 30' were taken for roadway then the remainder would be 90' x 150' (13500sf) but the build area 6400sf (80'x80') which is a significant contraction.
In such a case even vacant land could be significantly affected by loss of the frontage.

Now then, if the area has 65' frontage restrictions and the current building just barely meets these minimums then the loss of even a 5' strip could render the property such that it may not be legal to rebuild if the structure were damaged more than 50%, or it may render it illegal to build except within the same footprint (preventing additions) or other such added restrictions above and beyond just the value of the lost land.

Things to consider.


This wouldn't happen to be along I-94 in Racine or Kenosha county would it, or even KR?

(original poster mentions Wisconsin )

 

[Calvin the Airedale]

Not psychic altho occasionally psychotic! First paragraph of the OP reads: "I am acquiring a strip of land for a local municipality for a road improvement project. The strip of land is adjacent to the road. We valued the land using bare land comparable sales to come up with a unit value to be applied to the strip of land." The OP describes a "strip appraisal" methodology addressing land only.

P.S. I am fluent in several languages including "trainee"

What makes me suspicious is the method of contention of the owner's appraiser. The method which raised the question in the OP had its greatest application in strip takings of improved sites, not vacant.

I suppose we could just ask the OP to fill us in on more detail.

 

[Roy Courtney]

Years ago I did the right-of-way acquisition for a street improvement project. The city was widening a street and this regional grocery store had leased a building along said street for a long term. The right-of-way department of the grocery chain had written into the lease that in the event of condemnation of a certain number of parking spaces by a governmental entity that the grocery chain could cancel the lease. Guess what?...the store was looking for an excuse to travel and they did!

 

[Howard Klahr]

In seeing Greg's post referencing the book "Real Estate Valuation in Litigation" by JD Eaton I was inspired to read up on the issue. In fact there are two different methodologies in determining the value of the taking in this situation and the proper approach varies by what state in which the property is situated. Wisconsin, the location of the OP, is governed by the Federal Rule which is based on a before and after measurement. It would benefit the OP to read up on this issue and how it applies within his jurisdiction.

There are state however that do permit the division of the site into zones and compensation for eminent domain is calculated in that manner. The 40-30-20-10 method is just a "rule of thumb" process and would need to be supported through appropriate market data. Also know as the slide back theory.

The comments about the remainder having new frontage in the after situation is valid but again it depends on the jurisdiction.