Acreage Value

[The Warrior Monk]

Well gee Dave. All you have to do is run acreage comps and if the data tells you that 30 acres is selling for almost the same price as 40 acres - what does that tell you?

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

You're saying two different things here.

We have zoning up here up to 40 acres

If the zoning if 40 acres, I'd rather have the 40 acres than the 30 acres. The 30 acres is a nonconforming lot, and that would mean a variance would be required for various changes made to the property.

 

[fifteen]

You guys are beating a dead horse. The OP has made his decision by now. Too late :new_smile-l:

Dave : Almost the same price could be $1. So, .10 an acre proves your point?

Anyway, good night.

Try not to be so obvious in your interrogations, see what you made Rex do? You guys are going to have to fix that !! Not me

 

[The Warrior Monk]

Extensive experience in large acreage. I wonder if the OP author went with your suggestions or the suggestions of the res appraisers here. Hmmmmmm

You might not have noticed, but I currently hold a residential credential (though not for much longer). I have plenty of experience appraising large acre and subdivisible parcels for lenders, municipalities (acquisition), and private clients.

 

[Mercury]

Thanks all and sorry. Seems like I stirred up some feelings here. The review is a field review and I am going there tomorrow to get a better idea. Comps for 35 acres are non existent. I did want to point out that views, treed lots, etc. play into values quite a bit out here in Colorado. Also, the consideration for the value in this case is strictly residential as the land, though zoned agricultural, has no business of any sort on it and the surrounding acreages are residential.
I get the surplus and excess, but I look at it this way. The 35 acres may have a value of $1500 an acre as a whole, (just to give a number), but the 5 acres appear to have a value of $7500 an acre in a comparison to others. Hence, my confusion comes in valuing the extra 30 acres and making a $45,000 adjustment.

 

[Calvin the Airedale]

Let me get this straight, according to Appraizur and the OP, beyond a certain size, the added acreage stops having any contritubory value?

Did I get that right? What POV is this argument based upon?

If this theory holds water, then sign me up for one of those 20,000 acre ranches. Hell, I might buy two.

If the argument is that the contributory value, per acre, declines as the acreage increases it would conform with the following:

law of decreasing returns
The premise that additional expenditures beyond a certain point (the point of decreasing returns) will not yield a return commensurate with the additional investment. Also called law of diminishing returns.

But zip, zero, nada from 5 acres to 35? Seems improbable.

I don't know what your adjustment should be but it lies in the difference between 5 acre homesites and 40 acre mini-farm homesites. Look for such land sales, however far back, and the patterns of difference should become apparent.

 

[The Warrior Monk]

You guys are beating a dead horse. The OP has made his decision by now. Too late :new_smile-l:

Dave : Almost the same price could be $1. So, .10 an acre proves your point?

It's all relative. For example, take the $1,500/acre that you mentioned earlier as being "excessive." On my latest assignment, that $1,500/acre wouldn't cover the real estate taxes on the "excess" acreage (on an acreage basis).

Try not to be so obvious in your interrogations, see what you made Rex do? You guys are going to have to fix that !! Not me

Forget the interrogations...I'm simply in a state of disbelief...these are basic issues that were covered in the first appraisal course I took.

 

[The Warrior Monk]

Mercury,

There are several issues that may exist. The main one that pops out at me is the subject property subdivisible? Given that all of the sales are much, much smaller, I would speculate that it might very well be. If so, you're dealing with a subdivisible subject and nonsubdivisible sales. Or, in other words, the subject is being valued by using sales with entirely different utility. That would concern me in an assignment.

If it isn't subdivisible, then some basis is going to have to be determined for making lot size adjustments. That will depend on the available market data, of course.

 

[amluscombe]

Wow.....I just stopped on this thread because a majority of assignments I work with are rural residences on acreages. I am a Certified Residential Appraiser and completely agree with Tim Evans. He is giving good advice. Many of the acreages in my area ARE complex assignments. Many issues must be properly researched and weighed. Often, I consult with CG's to verify my conclusions on highest & best use where agricultural or developmental use (more $ around here) may be an issue with regards to H&BU. Plus, Tim is right there are many issues to consider with this and I could go on but it is getting late & I need my beauty sleep.........

 

[JT1974]

I agree 100% with post #51

 

[Ken B]

I agree 100% with post #51

Even my wife agrees with #51. And she normally just gets a glazed look in her eyes when I start talking shop.