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Can the market determine that excess land is actually just surplus land?

Ken B

Elite Member
Joined
Feb 18, 2004
Professional Status
Certified General Appraiser
State
Florida
I haven't played here much since late 2019, but my recollection is that Artemis was one of the more level-headed and knowledgeable of the crowd.
 

Trihard

Thread Starter
Sophomore Member
Joined
Jul 4, 2017
Professional Status
General Public
State
Michigan
Here is what I concluded. The second parcel is worth around $4,000 based on single lot sales. I found another land sale where two similar parcels were sold together for $6,000 which shows a $2,000 discount on a combined sale. Hence my contributory value for the second parcel in this instance is estimated to be $2,000. Moreover, based on the same land sale data there is a marketing time of 6-12 months and the holding costs. taxes, selling fees etc, for the second parcel would be around $2,000 also. Highest and best use of the second parcel is vacant with a contributory adjustment of $2,000 on the bottom of the grid for properties that sold without a second parcel. Thanks for the help guys!
 

ZZGAMAZZ

Senior Member
Joined
Jul 23, 2007
Professional Status
Certified Residential Appraiser
State
California
The OP indicated that there are two separate legal lots, one improved, one vacant. Both lots can be sold separately as they currently exist. No need for hypotheticals, this really is not hard.
But if two separate lots exist, can one appraisal be conducted of both lots without a HC that the two are actually one???
 

Ken B

Elite Member
Joined
Feb 18, 2004
Professional Status
Certified General Appraiser
State
Florida
But if two separate lots exist, can one appraisal be conducted of both lots without a HC that the two are actually one???
Yes, if the client so desires. Providing a single value on multiple properties is quite common. A prior reference to a "bulk value" comes into play when valuing 5 or more properties with a single value. Perhaps I misunderstood your previous question. As previously noted, the whole topic of surplus and excess land is wrought with confusion and misunderstandings.
 

Ken B

Elite Member
Joined
Feb 18, 2004
Professional Status
Certified General Appraiser
State
Florida
Here is what I concluded. The second parcel is worth around $4,000 based on single lot sales. I found another land sale where two similar parcels were sold together for $6,000 which shows a $2,000 discount on a combined sale. Hence my contributory value for the second parcel in this instance is estimated to be $2,000. Moreover, based on the same land sale data there is a marketing time of 6-12 months and the holding costs. taxes, selling fees etc, for the second parcel would be around $2,000 also. Highest and best use of the second parcel is vacant with a contributory adjustment of $2,000 on the bottom of the grid for properties that sold without a second parcel. Thanks for the help guys!
Well done. Except "vacant" is never really a highest and best use. Holding for future development upon demand is more appropriate.
 

NP_MAI

Senior Member
Joined
Apr 10, 2018
Professional Status
Certified General Appraiser
State
Florida
Yes, if the client so desires. Providing a single value on multiple properties is quite common. A prior reference to a "bulk value" comes into play when valuing 5 or more properties with a single value. Perhaps I misunderstood your previous question. As previously noted, the whole topic of surplus and excess land is wrought with confusion and misunderstandings.
A bulk value can come into play with any number of legal parcels greater than 1.

I see what you were getting at earlier Ken, I think we were somewhat arguing the same point from different perspectives. Labeling the legally separate lot as excess land is perfectly fine.

For instance, you have a shopping center with 10 undeveloped outparcels. The outparcels are considered excess land in relation to the economic site.

Your values would look like this:

Economic Site (Improved Shopping Center Parcel)- $Xm
Retail Value Outparcel 1- $Xm
Retail Value Outparcel 2- $Xm
etc.
Bulk Market Value- $Xm
 

andrew81

Senior Member
Gold Supporting Member
Joined
Dec 5, 2008
Professional Status
Certified Residential Appraiser
State
Illinois
Thanks for the response! I always though interim use was when zoning was involved like when a house is located in an area the is being rezoned to commercial and the future use would not allow what is currently improved on the site.
Interim use is the use to which a site or improved property is put until it is ready for its future highest and best use. An interim use is a current highest and best use that is likely to change.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Would an HC regarding an assemblage of parcels be required before the HBU analysis is conducted?
No as it is not contrary to what exists.
A construct by an appraiser is just a scenario.
which is two parcels, one of which has been improved with a SFR and one which is vacant.
I would not put too fine a spin on it. Second lots used for greenspace are common here (the Ozarks) - see zero wrong with valuing them together. That is especially true when dealing with cheap lots. Plottage of several lots may even increase its value by increasing its utility.
Would love to hear your thoughts as this situation is quite unique.
It's really not all that unique here. These are some that are either 3 lots, 2 lots or 1 and half lots - many have been lumped together on deeds, and many are surplus as they put two lots or more to make a single property. A fellow I know near these has a whole quarter block (4 lots) and 2 lots are improvements free. Note the lot lines are a little off- GIS problem
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Trihard

Thread Starter
Sophomore Member
Joined
Jul 4, 2017
Professional Status
General Public
State
Michigan
It's really not all that unique here. These are some that are either 3 lots, 2 lots or 1 and half lots - many have been lumped together on deeds, and many are surplus as they put two lots or more to make a single property. A fellow I know near these has a whole quarter block (4 lots) and 2 lots are improvements free. Note the lot lines are a little off- GIS problem
Is this a lower value part of your coverage area? In my coverage area that only happen in the market where the properties are all 75k and under. If sold as combined what is the contributory value of the vacant parcels? It seems like they would throw it in just as a sweetener with little to no additional contribution to the whole.
 
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