Combining parcels of land

[Jeff Horton]

I read a post in the last few days that had something to do with not being able to combine two parcels of land together in one appraisal. I don’t remember the details but I have a similar situation at the moment and I am working on.

I have two small tracts of land. One is like 3 and the other around 5 acres. They are directly across the road from each other. They are taxed separate, have separate deeds and tax ID numbers. My plan was to combine these two together for the purpose of the appraisal. Just state what I did and include plats, deeds etc. on the parcels.

As I was working on this I kept thinking about that post and it got me to wondering if there is some reason I can’t or shouldn’t combine the two parcels? I have done this many times in the past when parcels actually joined together or like in this case just a road divides them.

Anyone know something I don’t?

 

[George Hatch]

Three questions. Can these parcels be separately sold off? Who is your typical buyer for two non-contiguous parcels; and are these parcels worth more if sold separately or together? Answer these questions and you'll have your answer.

What I'm getting at here is that if these properties are marketable separately they might be worth more if sold that way. If so, you'd be better off appraising them separately. It would also make it easier on your client, assuming they are a lender. This is because it would allow the borrower at some future point to get one of the parcels released or sold off without affecting the other one. That way your client wouldn't need to get a new appraisal for the remainder.

Just a thought.

George Hatch

 

[Restrain]

Normally, a combination of parcels occurs when contiguous properties are combined for an appraisal, such as two 10 acre tracts bought at different times, now under one ownership, say for estate purposes. The fact that your properties are separated by a public road makes a combination of the parcels very problimatic. If the client wants to know the market value of the property, essentially what you have is 1 appraisal of two properties. I would treat these as what a typical purchaser would, that is, as two separate properties. If the client needs to know what these would sell for to the same person at the same time, that becomes another issue as this would not normally be the typical marketing of such a property.

 

[Larry Lyke]

Jeff --

I think you'll find out it's so much more work to put them both in the same appraisal than it is to put them in separate appraisals. [Read clone the first one as the boilerplate for the second one.]

There'll be less chance of a mistake in separate appraisals.

So what, you charge the client 100% for the first one and 20-33% or whatever for the second one. He thinks he's getting a bargain.

You can't just flat out give him the second one. People don't appreciate things that have no value to you either!!