barn only improvement

[datonmg]

I received an assignment to appraise a horse barn on 3 acres, and it is the only improvement on the parcel. Cost Approach obviously has to be applied, due to no comparables. The cost approach forms are catered to homes. Supervisor suggests I write narrative. Any ideas would be appreciated. Thanks.

 

[c w d]

Is this a commercial stable where people pay to keep their horses or a private stable?

If commercial it may not be within your licensure (or your supervisor's) if you're residential.

If it's private, instead of a narrative I would suggest the AI appraisal form. I can't remember it's exact name AI01 or something.....It provides a lot of flexibility packaged in a nice neat form.

 

[datonmg]

It's for private use, 2000 sq. ft., 2 stalls. thanks for your input.

 

[Midwest Guy]

Assuming the highest and best use is residential. You can consult with your supervisor about completing a vacant land appraisal + improvements.

There is a form FW-68 land appraisal, however this is a very out of date form and does not meet USPAP. Some would attempt to write addendums to "comply," others would only do this on a narrative format.

Scope of work rule, competency rule, Standards 1 and 2 also apply.

 

[PropertyEconomics]

Id be very tempted to put it on a vacant land form as that is the major component of the value. Market measurement of contributory value of barn improvements can most likely be found and added to the land value.
I agree this will require lots of addendas, but if you are uncomfortable with narriative and this is not for a fannie loan (which i doubt very seriously if it is) I would go for the form.

 

[datonmg]

Thanks for the input Jim. I disclosed the lack of experience for this type of assignment to the client, hoping to gain some knowledge/compentency throughout the assignment. But due to my inexperience and supervisor's lack of experience on this type of assignment, it may be a bit over my head. Thanks.

 

[PropertyEconomics]

Thanks for the input Jim. I disclosed the lack of experience for this type of assignment to the client, hoping to gain some knowledge/compentency throughout the assignment. But due to my inexperience and supervisor's lack of experience on this type of assignment, it may be a bit over my head. Thanks.

If you can do a matched pairs analysis of residences with barns and those without you can measure the contributory value of a barn. I think you can do this assignment .. just gonna take some time and effort.

I wish you well.

 

[datonmg]

Thanks PE, but the improvement actually appears to be worth more than the land in this case, based on preliminary cost figures. Property is also in rural area and I think it would be a tall order to find an accurate contributory value of the barn. I love taking on unique and tough assignments, 'cause the only way to learn is to do, but I think I'll hand this to one of the veterans. Thanks for all the input, it's much appreciated.

 

[stefan olafson]

I don't think you've looked nearly hard enough for comparable sale properties in the market. Expand your search and your parameters.

If it's rural there will be sales out there, maybe not perfect matches but good quality sales none the less.

The cost approach is a wonderful tool when it's applicable to the problem. Is the vacant land with a horse barn the highest and best use? If not then the cost approach is not really relevant to the problem. What does competing land in the area sell for? Is there value in the improvement?

You have to find MARKET EVIDENCE to the value in the market, dig a little deeper. If you like odd or different assignments then you are going to have to learn how to do them the right way.

The easy way is to find three land sales, provide a value and the lump in the value of the improvement from the cost approach. But that's the wrong way to do it and it will cause you troubles down the road if that's the way you proceed.

 

[Mike Kennedy]

Thanks for the input Jim. I disclosed the lack of experience for this type of assignment to the client, hoping to gain some knowledge/compentency throughout the assignment. But due to my inexperience and supervisor's lack of experience on this type of assignment, it may be a bit over my head. Thanks.

Competency Rule applies.......... hook up with an Experienced Cert....negotiate referral fee to your current supervisor -

or decline. All things come in time.