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Commercial District Now what?

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Ray Miller

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Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
I have a subject property that is in a mix use area of the county. It is zoned commercial district. On the east is a vet clinic or the west is a farm store, across the county trunk road is the farm store storage yard for gates, water tanks, fencing supplies, corral pannels and etc. To the south in the same district is additional single family homes. Then just south of the zoning line in gen. ag is a small housing development.

The lot is small .68 acres, the lots to the south would need to be aquired in assembleage for there to be any real commercail value to the subject lot. Single family is permitted in the Commercial District.

I am thinking about putting this in the report. that the interm use would be single family home. That the HBU would be commercial if additional land contigious to the subject could be aquired.

What say you?

PS

I can find no comparable sales similar to the location that the subject is in. None in a commercial district, none with a business as a farm store next to it or a large animal vet clinic next to it. I know this has got to have an affect on the value. With vets coming and going all hours of the day and night. Cattle, horses and other livestock being brought in at all hours of the day and night. there has got to be an adjustment for this external obsolenence.

for got to add he has a nice shop for his dump truck business. Would you note this in the appraisal??
 
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TJSum

Elite Member
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Nov 12, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
Ray, do you ever get any cookie cutters ? :)
 

Ray Miller

Thread Starter
Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
Ray, do you ever get any cookie cutters ? :)


Whats a cookie cutter???????????????

I think I have had one or two, but I get into trouble with the state on those!!!!!
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
The lot is small .68 acres, the lots to the south would need to be aquired in assembleage for there to be any real commercail value to the subject lot. Single family is permitted in the Commercial District.

I am thinking about putting this in the report. that the interm use would be single family home. That the HBU would be commercial if additional land contigious to the subject could be aquired.

What say you?
(my bold)

I think your logic is sound from what I understand, but here's the question:
Who is the likely buyer for the property? Is it
A. Someone who would purchase the subject and then negotiate to purchase the neighboring properties in order to assemble a commercially viable site, or
B. Someone who would purchase to live there without regard to the commercial use, or
C. The "A" buyer who would then rent the subject out until such time as she or he could assemble the properties?

If the answer is A, then there is no real interim use; the HBU is commercial.
If B, then residential.
If C, then interim (for sure!).

I think if I had a problem to analyze like yours, I'd lay out my analysis similar to how I asked the question and then I'd address which one I think it is; I'd use this as part of my rationale for my HBU determination.

As usual, Ray, good luck!!
(its terrible when you feel as though you must second-, third-, fourth-, etc., guess yourself!).
 

Ray Miller

Thread Starter
Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
(my bold)

I think your logic is sound from what I understand, but here's the question:
Who is the likely buyer for the property? Is it
A. Someone who would purchase the subject and then negotiate to purchase the neighboring properties in order to assemble a commercially viable site, or
B. Someone who would purchase to live there without regard to the commercial use, or
C. The "A" buyer who would then rent the subject out until such time as she or he could assemble the properties?

If the answer is A, then there is no real interim use; the HBU is commercial.
If B, then residential.
If C, then interim (for sure!).

I think if I had a problem to analyze like yours, I'd lay out my analysis similar to how I asked the question and then I'd address which one I think it is; I'd use this as part of my rationale for my HBU determination.

As usual, Ray, good luck!!
(its terrible when you feel as though you must second-, third-, fourth-, etc., guess yourself!).


In this case the answer would be C. The property to the south would not be able to be bought for some time. As the people built it for there retirement home. When they past or move to a old folks home. Then the additional property could be bought.
 
Joined
Jun 3, 2005
Professional Status
Certified Residential Appraiser
State
Colorado
In the city of Denver, most commercial zoning allows residential uses. In my mixed use neighborhood, residential redevelopment is generally the highest and best use.

In entry level neighborhoods in Metro Denver, homes with oversized garages sell at a premium, because the homeowners can use the space for their business equipment.

In regards to this subject property, if there isn't a high demand for commercial property, my guess would be that the present use is the HBU -- residential, with added value for the commercial use in the garage. A negative adjustment for the traffic, a positive adjustment for the garage, and the rest works itself out.
 

Brad Ellis

Senior Member
Joined
Feb 7, 2006
Professional Status
Certified Residential Appraiser
State
California
Ray,

Highest and best use would almost assuredly be residential based on the data your provided. You said there would have to be an assemblge in order to put it to commercial use.

So now all you really have to decide (on the H+B use issue anyway) is whether or not the current improvements do contribute to value. If they do, H+B use is the current use (consistent use theory).

If current improvements contribute to value (i.e. the land would not be worth more without the improvements) then it would make no economic sense to demolish them.

The whole imterim use thing has always troubled me. Of course there are true interim uses but I've never seen one that was also H+B use. The reason for that is due to the fact that when a property is under an interim use, the owner is waiting for the H+B use to change- it is anticipatory. At some point in time the H+B use will change- but if it is an interim use that also means that the change in H+B use has not yet happened.

I suspect that is the case with your subject.

Brad
 

PropertyEconomics

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Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
Why couldnt the property be commercial as a small office / shop? It seems a dump truck business is being more or less run out of the property as it stands now. I would be curious if there are any small commercial properties like this anywhere around. Its value would lend itself more than likely to a small commercial user.
 

Ray Miller

Thread Starter
Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
Why couldnt the property be commercial as a small office / shop? It seems a dump truck business is being more or less run out of the property as it stands now. I would be curious if there are any small commercial properties like this anywhere around. Its value would lend itself more than likely to a small commercial user.


Lots of dump truck drivers independent contractors live in the rural areas and use there lots, small acreage to build a shop for thier equipment ie: dump truck, small crawler, back hoe or what have you. there phone line are listed in the yellow pages. So now you have the question if they are running a commercial enterprise from there home and shop are they a commercial business. If yes, then it will blow the loan in most cases, if yes and you look the other way are you failing to call it what it is beside a single family home?

In this one I noted the shop building and the dump truck business so the lender would know. But still did it as a single family residental.

Should I have done it as a commercial? After all he is using part of it as commercial? It is is source of income outside of what his wife earns.

I chalk it up to intermim use as a single family, someday and it could be tomorrow some ag related business will buy the property. It could be the vet clinic or the farm store. The farm store keeps buying contigious land and growing every year.

Just down the road less then a mile is one of the largest haevy contractors in the state. Matter of fact this little town is there town.

You can't **** till they bark sort of town.

It starts with an F and end with a T
 
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JT1974

Senior Member
Joined
Dec 16, 2006
Professional Status
Certified General Appraiser
State
Wisconsin
Ray,

Is that Plain, Wisconsin?
 
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