Can you value as vacant.if its improved?

[CANative]

Perhaps we just need a definition of what constitutes the "subject property" in USPAP. We have Real Property and Personal Property, but no Subject Property definition.

The issue is real property and real estate.

 

[Hamlet]

The issue is real property and real estate.

Yes, Greg I know.

 

[CANative]

Then why are you dragging real property and personal property into this?

You're cool with me Hamlet so please don't take my aggressive posts as pot shots at you. This is just an interesting discussion.

 

[Hamlet]

Then why are you dragging real property and personal property into this?

You're cool with me Hamlet so please don't take my aggressive posts as pot shots at you. This is just an interesting discussion.

Im not dragging those terms into the discussion, I'm simply saying that the term subject property needs to be clearly defined in USPAP. That seems to be the confusing factor here.

I for one considered the "subject property" to be the entire tract of land including improvements and bundle of rights. That thinking leads me to see where an HC is necessary. However, if as Mr. Wiley is saying, all we have to do is clearly describe exactly the physical pieces parts that we are appraising, no HC is necessary.

You is OK with me too, but if I get attitude, I'll give attitude back. Just how I am.

 

[DWiley]

The issue is real property and real estate.

Exactly. Appraisers of other disciplines do not have the same dilemma (see previous chess set example).

Years ago the ASB had discussions mirroring those in this thread. A definition of subject property was contemplated by the ASB. In the end, other projects took priority, and this one remains on a shelf somewhere - perhaps because Pittsburgh Pete is correct. While this is an interesting theoretical discussion, the fact is whether or not one thinks a HC is required really has minimal effect on the development or the required reporting.

 

[fifteen]

Exactly, I'm amazed this discussion is still going on lol. It'd be different if you had to post prominently that this report contains a HC or not, but, you don't.

While this is an interesting theoretical discussion, the fact is whether or not one thinks a HC is required really has minimal effect on the development or the required reporting.

 

[Pittsburgh Pete]

You'll notice that my posts throughout this thread have me flip-flopping between camps. This is not an accident.



The cost approach is not the appraisal. It is a methodology to develop value indications and the result is to be reconciled with everything else that was done (or not done). The hypothical subsititute property is a hypothetical proeprty. We are not holding it out to be a real property that exists as of the date of value.



Highest and best use is not an appraisal. The results are not opinions of value. The models and constructs used in developing HBU are not opinions of value they are the results of sensitivity analysis.

Cost approach addresses a replacement or reproduction of what exists--call it hypothetical if you want--merely muddies the waters.

Highest and best use is central to the appraisal--not an opinion of value but an analysis and conclusion that drives the valuation including selection of comparable sales, rents, cap rates, etc.

 

[incognito]

I just found this thread. The original question was:

Client wants me to value as vacant land only, with no value given to the improvements/QUOTE]

I'm surprised this hasn't come up yet: My observation is this: Don't we do this EVERY TIME we complete a land value in the cost approach section of a URAR (or any other) appraisal of improved property? Of course.

Not only can you do this, buy you do every day in your normal practice, as a portion of every appraisal you complete with a cost approach, or land value. EA? HC? Well I will leave that one up to you...

 

[Mr Rex]

Has anybody drug "the house and 5" into this discussion yet?

 

[The Warrior Monk]

I'm surprised this hasn't come up yet: My observation is this: Don't we do this EVERY TIME we complete a land value in the cost approach section of a URAR (or any other) appraisal of improved property? Of course.

It is my belief that if one determines the land value in a cost approach "as if" vacant, then a hypothetical condition should be used.

Has anybody drug "the house and 5" into this discussion yet?

Yup...see my reference to FAQ #114.