Assemblage

[MarkWillis]

when doing several tracts of land in one report for one value, for example an estate appraisal. how do i avoid assemblage (which seems the only logical thing to do, whether you wanna call it something else is your perogative). And how many forms would you use?

is their any kind of protocol for these types of assignments or just pick a scope and use it?

 

[Ted Martin]

Are we talking city lots or farm ground? Are they adjacent lots that because of the assemblage potentially have a higher and better use?

Your choice on the scope as long as you define it.

 

[MarkWillis]

rural land in the same townships, different types of land. i don't think any would offer it as a total package for sale.

 

[Tim Hicks (Texas)]

It sounds like a scope of work assignment and a narrartive would be the best course. However, it entirely depends on how they want it packaged and presented. This should be thoroughly detailed in the scope of work. It seems it would be worth more if each parcel was appraised and sold separately. If they want only a package deal with only one buyer, then it would take a special buyer and a special price. Personally, I would only accept the assignment as separate appraisals and values for each parcel. Any other combination will bring highly subjective opinions into the mix and most sellers only have tunnel vision. Many have trouble understanding that individually they are worth $zzz, but together they are worth less than the sum.

There have been many times I have seen a borrower buy two lots, build their home directly on both lots and then find out their lots are worth less because it is effectively one large lot now and is only worth the price of the same size single lot in the addition.

 

[MarkWillis]

it is being done for tax purposes.

 

[Michigander]

Mark, are the lots contiguous? Have you checked how many sites you have? Does your client want it valued as one property and is s/he aware that this might not be highest and best use?

 

[MarkWillis]

the lots are not touching but are within a 1/4 mile of each other. they also have different uses cutover, pasture, etc. the purpose is for use by an accountant.
one appraisal (the group of land) is for 10 years ago and the second appraisal is for last year (the group of land).

 

[Eminent Domain]

If they are not contiguous I don't see how they can be appraised as a single unit. I appraised an estate years ago which consisted of 40+ properties and not knowing any different at that time added all the "opinions of value" together and stated in the executive summary the total market value of all the properties was $x,zzz,zzz. Man that was crazy. I later learned that I should have stated that the total "portfolio value" is $x,zzz,zzz.

My opinion is to value all properties separately as usual and then provide the accountant with a total "portfolio value".

After thinking about this I guess one could do this but one would have to have data of other sales wherein non-contiguous tracts sold in a lump sum. From that an appraiser would have to determine their value separately and then determine if the market deducted for the purchase of more than one property at the same time. I guess logic would be just like eggs: Its cheaper per egg to buy them by the dozen than to purchase 12 one at a time. You would need some good info though to go this route.

Just my $0.02

BF

 

[MarkWillis]

that is a good explanation and the portfolio value concept is good point. people don't value stocks, bonds, real estate, etc without "assemblage." thanks, i have a buncha these to work on.

 

[Farm Gal]

Mark:

Be sure to state that your 'portfolio value' is based on the scope of the assignment and specifically excludes any analysis of the property's value 'as if' marketed simultaneously.

Otherwise you might have to get into multi-parcel absorbtion analyses... :blink: eyeeew.

this only applies if there were a significant number of similar non-contigious parcels within close proximity, as your description appears to indicate...