Acreage Value

[Michigan CG]

I'd say your advice is misguiding Tim. This is a residential appraisal. Since when does a res appraiser consider subdevelopment value or tree farm value or corn farm land value? We don't. Your advice does not pertain to the OP's question except in a commercial sense. I guess when they say CG's are the worst residential appraisers they weren't kidding lol. You've lost touch of what residential appraisal is and you confuse the commercial aspect into your assessment.

You CG's really shouldn't be giving advice to res appraisers imo. You complicate things more than they need to be and dismiss welcome guidance as incomplete and berate the poster. Your opinion isn't needed for a residential valuation - sorry, but that's the way it is. Anybody notice the OP author hasn't posted? Because this thread has gone way off track.... Consider that. I'm out of here, pictures need to be taken.

So what you are saying is that a modest home sitting in Clinton County Iowa on 40 acres of the most productive farm land in the world should only be considered as a residential property and you think that "$1500" an acre is too high for the excess/surplus land when they are selling that land for $7,500/acre. When valuing rural land you consider the contribution of the improvements. If the house is a 1,200 SF house built in 1950 and contributes $50/SF then you have a house contributing $60,000 in value to land worth $300,000.

You really need to read this book (I have) before you post on this subject any further:

http://www.appraisalinstitute.org/store/p-16-appraisal-of-rural-property.aspx

.........Since when does a res appraiser consider subdevelopment value or tree farm value or corn farm land value? We don't........

You should so that you can be sure that you are competent to complete the assignment. In this case you are not competent to complete the assignment.

...........Your advice does not pertain to the OP's question except in a commercial sense..........

Rural residential/farms have income potential. They therefore potentially have more value than your estimated <$1,500/acre.

..........I guess when they say CG's are the worst residential appraisers they weren't kidding.........

I love meeting people like you in litigation. Appraising things you having no clue what you are getting yourself into. I will put my residential work up against most. There are many on this forum who have seen my residential work. Maybe someone will opine.

.......You've lost touch of what residential appraisal is and you confuse the commercial aspect into your assessment.

You CG's really shouldn't be giving advice to res appraisers imo............

50% of my billing is residential work.

 

[Ken B]

And if it's more than 1 lot, I would guess the appraiser checked with the bank to see if all lots were to be encumbered in the "residential" valuation and loan. Something that needs to be checked if the original appraiser didn't. It appears the CG's around here don't have much to do as they follow me and my comments around to dismiss them with general CG idioms that don't mean squat to residential appraisers. Too busy for their sometimes senseless chatter. Doing a RELO and not asking for help lol

OP author got the best advice from res appraisers. Let us know how it turned out ....

Just to put things in perspective, I did res only for 16 years before I started doing commercial work and I hold a residential designation in one of the major professional appraisal organizations.

Next.

 

[Mike Kennedy]

"Since when does a res appraiser consider subdevelopment value or tree farm value or corn farm land value? We don't.":new_shocked:

Aprazur, twood appear that cleaning that old, rusty, dusty keyboard to make sure the n't don't automatically get printed when one hits the o key - is in order.

Be sure to use Bounty the quicker picker upper to ensure those keys don't stick again.

(being helpful).

 

[Metamorphic]

I work in an area that has a big rural residential development. They've got parcels anywhere from 1/4 acre up to 20. To get good improvement matches you often have to take properties with a fairly wide range of acreage.

What I've been doing is taking a selection of comparable properties (sometimes just the "comps" and sometimes the "comps" plus some other near comps), run allocation on them, calculate the price/acre based on allocation. I plot that data with $/AC on the y-axis, and acreage on the x-axis.

Typically what you'll get is a curve that show's high $/Ac prices for small residential size lots. The $/AC decreases sharply from .25 AC to 3-4 AC. From 3-4 ac to 10 in decreases more slowly, and approaches horizontal as you go out to 20 ac. With that information its pretty easy to derive a "big" adjustment to bring the smaller lots up to the subject and a smaller adjustment to subtract out value for the larger comps.

However in your case it looks like you're pretty far out of the ball park. At the very least I'd go back and find the last comparably large sale and make a big market adjustment to get it onto the grid. It probably wont mean much in reality because the the wiggle room in the time adjustment will be as big as the acreage adjustment, but it show's good faith and due diligence.

 

[Ken B]

Once again Meta proves himself to be smarter than the average apprazur.

 

[Terrel L. Shields]

Is the acreage over 5 acres considered excess and given no value? It is zoned agricultural and has no business on it.

Lets see....the house is 1500 SF. The comp is 3000 SF, so let's call the SF over 1500 surplus and argue that it is worth exactly zero....?

36 acres is worth more than 5 acres all else being equal. period. Use of smaller acreage comps will require those comps to be adjusted accordingly and from sales of nearby similar sized tracts you get the evidence of what that surplus land is worth.

My experience from data says that over a certain acreage there is no added value.

My experience has been the exact opposite. Land has a value. Identical houses - one on 5 acres, one on 10 acres, one on 1000 acres.... The first two, the ten acre tract will bring more. The dwellings will contribute equal amounts. On the third, the acreage is the target market, not the dwelling, and the dwelling will contribute less dollars than it would on a small site; and the driver of value is the land.

 

[Rob Baum]

What I've been doing is taking a selection of comparable properties (sometimes just the "comps" and sometimes the "comps" plus some other near comps), run allocation on them, calculate the price/acre based on allocation. I plot that data with $/AC on the y-axis, and acreage on the x-axis.

Typically what you'll get is a curve that show's high $/Ac prices for small residential size lots. The $/AC decreases sharply from .25 AC to 3-4 AC. From 3-4 ac to 10 in decreases more slowly, and approaches horizontal as you go out to 20 ac.

In my area - semi rural - this pattern is also followed, but reverses as tracts get larger again. It is getting tougher and tougher to find a contiguous area of larger than 20-30 acres, so large tracts will actually bring a premium.

You REALLY need to determine an adjustment for acreage from sales in your area, and not try to rely on rules of thumb.

 

[fifteen]

Yep, I've reviewed a few MAI's and those were nearly the worst residential appraisals I've ever seen. Just the facts and it's well-known CG can't help bringing their commercial experience into a residential appraisal and they can't get the SOW straight. Their res appraisals are typically all over the place lol. Not your fault. Overqualified for residential is the same as being underqualified to a reviewer. Good luck in your commercial careers.

 

[Mr Rex]

Qualified for residential or dog house appraisal seems to be a challenge for some...

 

[fifteen]

Oh I'm sure some here will break that dog house down into a 100 commercial uses lol

Qualified for residential or dog house appraisal seems to be a challenge for some...