"as-is" Value Of Site Improvements

[CANative]

If you're doing an existing property then the site value should include what exists on that site. So the subdivision lot comp should have adjustments to reflect the existing site improvements of the subject lot.

 

[Gobears81]

If you're doing an existing property then the site value should include what exists on that site. So the subdivision lot comp should have adjustments to reflect the existing site improvements of the subject lot.

Then what is the site improvements line for?

 

[CANative]

Then what is the site improvements line for?

That's what I'm saying. And Denis said there are no rules to this discussion so I'm having some fun.

 

[Michael S]

If you're doing an existing property then the site value should include what exists on that site. So the subdivision lot comp should have adjustments to reflect the existing site improvements of the subject lot.

Land (raw - undeveloped) and sites are valued as if vacant and available to be developed to their highest and best use. Site value typically include off-site improvements (streets, presence of utilities, etc.) but not on-site improvements such as fine grading, fences, paving, landscaping, drainage improvements, etc.

If you had two identical industrial sites next door to each other and one had a perimeter fence with barb wire, lighting, and was completely paved (good for parking trailers or equipment) and the other was simply dirt - which one would sell for more? Is the land value different between the two properties or is the additional value due to those site improvements?

 

[CANative]

The top part of the fannie mae cost approach (and above that the narrative comment section for site value) is asking for our opinion of value of the subject's site. It's not asking for the value of the land. That should include any site improvements... yes?

 

[CANative]

The problem is the stinking form.

 

[Gobears81]

We should just put the building value in the top line too

 

[Eli]

The top part of the fannie mae cost approach (and above that the narrative comment section for site value) is asking for our opinion of value of the subject's site. It's not asking for the value of the land. That should include any site improvements... yes?

In my mind, it would depend on what method was used to develop the site value listed at the top of the cost approach section on the 1004 and what was included in that line item. For example if land value by comparison of sales was used to develop the site value at the top of the cost approach section and it was vacant land with no site improvements on the land comparable sales, and the subject site has improvements that vacant land sales did not have, then the "as is" value of those site improvements that the subject has which the vacant land sales did not have, would need to be included in the "as is" value of the site improvements line at the bottom of the cost approach section. That is just typical cost approach protocol, imo. No biggie.

 

[CANative]

Eli... if I'm providing an opinion of the subjects site value then it should not matter what method I used.

In other words, the "as is value of the site improvements" is baked into the opinion of site value developed at the beginning of the process.

 

[Eli]

Eli... if I'm providing an opinion of the subjects site value then it should matter what method I used.

The problem I see from your side is the definition of "site". I understand the definition of "site". Whoever developed the form had to want the differences between the land sales by comparison or whatever method was developed listed on "as is" value of site improvements. The term "site" should not be at the top line. "Land" should be in it's place, or some other term to reference what land improvements are included and what is not.

Site by definition includes site improvements.

If land value as if vacant was developed by the sales comparison approach and all land sales were vacant land with no site improvements, then the subject would need an adjustment somewhere if the subject had site improvements. That is the reason for the "as is" value of site improvements line, which could be put at the top with a narrative explanation in the addendum. Either way, it would have to be explained. Maybe not when the form was done though.