Appraising A House Without Land

[George Hatch]

Good gravy.

What can be conveyed and how would title be vested? The answer to that is what your subject consists of.

If there was a condo map or a coop agreement on this site you guys wouldn't be talking about relying on the Cost Approach.

 

[Ken B]

So nobody has ever done a building residual approach to value?

It's a great way to value industrial property when comps and the subject have large variation in the land-to-building ratios.

 

[Meandering]

These are residential appraisers.

There is no value that is not Fannie Market Value,

and residuals are stains on sheet rock and joists.

ON state, and some federal lands, there are houses that are sold without the land.
In some campgrounds there are houses that are sold without the land.

But in both cases, the rights of use of the land are spelled out.
Most of these include lease agreements for the land.

Native reservations might also present some sales of homes without the sale of the land.

But again, the rights to use of the land are spelled out.




.

 

[Gobears81]

Good gravy.

What can be conveyed and how would title be vested? The answer to that is what your subject consists of.

If there was a condo map or a coop agreement on this site you guys wouldn't be talking about relying on the Cost Approach.

I get what you are saying. There are a lot of partial interest considerations in estates. If that is the case here (and it's possible that it is), I'd just suggest to the OP that he discusses with the client that he can convey a market value of the entire property and a land value, but then pass the rest of it on to an accountant. But, the way he described it, they wanted to know how much the improvements are worth because of their history with building it, etc, not because of partial interests.

 

[Ken B]

Residences on tribal land are valued using a 1004. That's why there is a "Leasehold" block.

Residential property that is part of a Community Land Trust is valued the same way.

 

[Terrel L. Shields]

Thanks Ken B _

Std. 1-2, (e) (v)

Beyond the USPAP requirements above, you should read FAQ 182 -pg. F-82

Since land should be valued as if vacant and available for its highest and best use (so land value does NOT vary with the improvements or lack thereof), the contributory value can be estimated.

 

[George Hatch]

If whomever holds title to the whole were to market this separate property interest to an outside buyer they most likely wouldn't cede the rights to the use of the land beneath it for free.

"Okay, okay, the site under the structure is free but the right to use my driveway to get to it costs $40k."

 

[George Ellerman]

We do not appraise properties. We appraise property rights.

In the case you're describing the property rights that go with "just the house" may or may not even be marketable. Partial interest appraisals are a real niche specialty.

If you were to put this house on a trailer for relocation what would the value of the house be as it sits on the trailer ? What would the structure be insured for if you were to take it off of its foundation ? Let's say the property was destroyed in transit what would the insurance company pay to reproduce or replace the structure ? Do a quick cost approach and let it go at that.

 

[hastalavista]

We cannot appropriately appraise any property without knowing the rights we are valuing and and any limitations/restrictions of those rights.
We cannot appropriately appraise a component of any property without knowing the rights we are valuing and any limitations/restriction of those rights.

Based on the OP's post, all we know is that there is a structure and the structure is configured as a residence. We know that the land isn't part of the valuation problem. That's not enough to define the valuation problem in order to get started.

 

[CANative]

I'd start with the sketch and then work backwards from there.