Barns and adjustments

[KCFilley]

Hi,

I'm a realtor in the KC area and love to work with homes on land. Am hopeful you experts can help on some values and adjustments. I have a home listed that has a 20 +/- gray metal barn with 10 older stalls. There's water and electric at the barn. I believe the cost to build a similar barn would be in the $25,000 range (depending on amount of concrete poured). The owner will not pay to have an appraisal completed.

I can comp the house based on both recent sales and sales within the last year. The seller believes $30,000 should be given to the barn and I believe it should only be about $10,000.

Also, this home sits on a slab vs a basement and is very very close to the road.

I know that effects buyer desirability and the lack of a basement would be deducted from the value but what about proximity to the road?

I would love to have printed info for questions like this to help us agents.

Thanks again.

KC

 

[Randolph Kinney]

Hi,

I'm a realtor in the KC area and love to work with homes on land. Am hopeful you experts can help on some values and adjustments. I have a home listed that has a 20 +/- gray metal barn with 10 older stalls. There's water and electric at the barn. I believe the cost to build a similar barn would be in the $25,000 range (depending on amount of concrete poured). The owner will not pay to have an appraisal completed.

I can comp the house based on both recent sales and sales within the last year. The seller believes $30,000 should be given to the barn and I believe it should only be about $10,000.

Also, this home sits on a slab vs a basement and is very very close to the road.

I know that effects buyer desirability and the lack of a basement would be deducted from the value but what about proximity to the road?

I would love to have printed info for questions like this to help us agents.

Thanks again.

KC

I am not experienced is rural properties that are used as both residential and commercial / agricultural.

However, a barn would have more value to someone who is going to use it for its intended purpose than say a "gentleman farmer" who uses the property as mainly residential. Is there any income produced from having the barn and acreage?

What estimate is the value range of the property in total?

 

[Mike Kennedy]

Welcome to AF KC, your thread has been moved from General to Ask an Appraiser which is a Moderated Sub-forum for non-Appraiser questions like yours.

Contributory Value of the site and all improvements are based on market reaction not cost. i.e. competitive properties with, or without, similar amenities demonstrate what buyers actually pay for improvements. That Residual Value may be equal to, less than, or more than actual Cost. As with all, it depends on where, what, and when.

Re Dwelling proximity to road frontage - that too depends on site location and road characteristics.....i.e. private road, side road, secondary or primary access road, setback with enhanced privacy or periodic (commuter) or constant impact from auto, truck, and/or pedestrian traffic. To determine market reaction for dwelling location on a site - that too must be demonstrated by the most similar, proximate, and recent value indicators (closed sales, contracted sales, and actives adjusted for market reaction to List Price).

In other words ..."apples to apples and pears to pears comparison" based on the Principle of Substitution. The answer you seek is always "It Depends" - let the Market Data guide you and your property owner. Also suggest researching "Functional Obsolescence, Superadequacy" (over-improvement indicated by lack of truly competitive properties with similar amenities from which one extracts Contributor Values). For example: if the most competitive similar and local props demonstrate a 2-3 stall barn (or NO barn) as typically demanded by buyers, then the subjects' additional stalls and SF MAY represent an over-improvement.

The good news - AF has HUNDREDS of highly competent Rural Appraisers who will add their expertise to the discussion.

Again, welcome aboard.

 

[Mark K]

There are far too many questions remaining about the property to make an educated estimate of the value of the barn. Is it typical for the area? How large is the site?(big barn on small site is not worth much, generally) How large is the barn? Overall price range of the property? Zoning? Alternate uses?

It it can be built for $25K and is 20 years old it obviously isn't worth $30K. Economic life for metal-siding pole sheds/barns is about 40-50 years. Use the cost approach and depreciation if you have no comps. 20 yr old, economic life of 40 yrs. equals 50% depreciation. $25K to build, estimated contributory value of $12.5K. Not the best method but should come close enough for a listing CMA, but be sure that you have a reliable source for your estimated cost-new.

Proximity to road on acreage tracts? Again, whats typical for the area? Age of home? Old homes traditionally were built close to the road, 50-75' +/- where a new home next door might be 200' back. If a buyer is looking for an old house, chances are they will find most of them close to the road and the setback will not be an issue. A newer home built close to the road will likely suffer economic damages due to the close proximity where an older home will not be affected.

Buyers of rural property have different motivations than typical subdivision buyers. "Horse people" will often inspect the barn and acreage before they look at the house. I've seen properties sell for $400K (in an area where the average is $100K) and the only living space is a beat up 30 yr. old double wide, but it sure had a nice barn and fencing. These buyers will gladly sacrifice proximity to the road for a nice horse pasture and barn.

 

[DMZwerg]

I have a home listed that has a 20 +/- gray metal barn with 10 older stalls. There's water and electric at the barn. I believe the cost to build a similar barn would be in the $25,000 range (depending on amount of concrete poured). The owner will not pay to have an appraisal completed.

I can comp the house based on both recent sales and sales within the last year. The seller believes $30,000 should be given to the barn and I believe it should only be about $10,000.

You are more likely closer to correct, but why are you closer to correct? That is what you need to ask yourself.

Have you seen properties sell for about that much more when they have a pole barn?
How much land is involved? (2ac? 10ac? 20ac?)
Is the property zoned for horses or cattle? (can be a contributing factor, especially given the comment about "older stalls")

and the most important point:
Do YOU feel qualified to render an opinion of value on such a property?

All these can factor in significantly in my experience.
If you can match it with other similar properties with similarly sized pole barns then you may be well on your way, if you are still too nervous about under or over valuing the property due to complexity then your client needs to know that too.

 

[Ray Miller]

Hi,

I'm a realtor in the KC area and love to work with homes on land. Am hopeful you experts can help on some values and adjustments. I have a home listed that has a 20 +/- gray metal barn with 10 older stalls. There's water and electric at the barn. I believe the cost to build a similar barn would be in the $25,000 range (depending on amount of concrete poured). The owner will not pay to have an appraisal completed.

I can comp the house based on both recent sales and sales within the last year. The seller believes $30,000 should be given to the barn and I believe it should only be about $10,000.

Also, this home sits on a slab vs a basement and is very very close to the road.

I know that effects buyer desirability and the lack of a basement would be deducted from the value but what about proximity to the road?

I would love to have printed info for questions like this to help us agents.

Thanks again.

KC

Impossible to answer, as each subject is different, each market is different. Appraisers sell there data to the client in the form of an appraisal report.

When dealing with horse property, farm property, ranch property there are a lot of variables that need to be considered. With out seeing the property it is darm near impossible to render an opinion of value.

Then you have location and lay of land. Having shod horses in the KC area for a number of years, many moons ago. Horses property can vary quite a bit. Hence if you are near Saddle and Sirloin Club horse property was higher, as you moved south toward Ms. Bunting property is was a bit less. Get out to Stanley Ks around Doc Steward old place and it got even less, cross over to the Missouri prices were different. The Owen Property was not worth as much as the Benjamin Property. Go north of the river and property was even less. Then you have the construction of the barns and other out buildings to consider.

Nope you need to pay the appraiser to get you the value. That is all we have to sell is our knowledge and ability to research a property and put a value on it.

Not sorry to be harsh, does you doctor change you for answering questions, does you lawyer charge you for answer questions, so why not the appraiser?

 

[Webbed Feet]

I would love to have printed info for questions like this to help us agents.

Thanks again.

KC

This thread response.....

http://appraisersforum.com/showpost.php?p=1885877&postcount=16

Then obtain and read;

The Appraisal of Real Estate; American Institute of Real Estate Appraisers
Mastering Unique & Complex Property Appraisal; Hondos Learning
Appraising Residences & Income Properties; Henry Harrison

I'm sure a list of many other good books will be forthcoming.

Best Wishes

 

[Terrel L. Shields]

If barns are not so atypical as to be a detriment, then a barn will add some value to a property. It will not add the cost to build a new one like it. You can get a good idea about the cost of a new barn like it from ads in Farm Talk (Pittsburg, Ks) or the Big Nickel (Joplin)...both get close to, if not in the KC metro area....and those building costs ought to give you an idea of the max contribution....
I would aver however, that you are pretty much on track with a third the value as I am seeing nearly new shops and barns adding about 2/3 cost new at most...and I am about 200 mi. S - Steve Owen a KC /Joplin dual resident probably has a clearer idea as he appraises in those areas.

 

[Ted Martin]

I'm live outside of Topeka and just got my monthly newletter for the electric company, there were at least a dozen companies advertising 40 x 60 +/- pole barns erected on you land for $12,000 to $15,000. Included roof, four sides, equipment and entry door, dirt floor. In Jefferson, Douglas and Franklin counties on my side of KC those types of structures are only worth $3,000 to $6,000. If it is newer and has a concrete floor and electricity it might be worth up to $15,000.