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Cookie Cutter Lot Is Now An 1 Acre. Is This Excess Land Worth Anything?

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Nevada Life

Freshman Member
Joined
Mar 14, 2014
Professional Status
Certified Residential Appraiser
State
Nevada
Working on a GPAR appraisal for the listing agent. The subject has been listed for over 160 days.

Subject is located in a golf course project, a mix of tract and custom homes. Subject is an upgraded tract home with good rear views of the mountains/city/open land. In 2011, there was a golf course behind this property and now it is open space. The golf course closed down. Owners of the golf course asked the homeowners if they wanted to purchase any of the land behind them. The subject's cookie cutter tract lot went from 1/4 of acre +/- to 1.07 acres. There are ZERO sales in this project of similar tract homes that sold on an acre. The intent to purchase the land behind the subject is so that view would not be obstructed. The land behind the subject's 1+ acre lot is 100 acres that is zoned OS (open space). The subject's original lot is PUD and the rear portion is zoned OS (open space)

Trying to figure out what the 1 acre is worth- Is that excess land worth anything? The purchased land behind the subject is not needed to serve or support the existing improvement.There are 0 track home sales on an acre. There are only huge custom homes that have sold on an acre

And, what are the chances of a zoning change on the 100 acres of the currently zoned Open Space that could potentially obstruct the view?
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Ask RE agents who sell in the community.

Lacking one acre sales, what is the next largest lot size home sold in the subdivision? Sometimes if largest lot size is, for example, 24,000 sf, I might extract how much extra it is worth in the market vs standard lots of 10,000-12,000 feet . I might apply that adjustment for comps on smaller lot compared to subject and conclude the surplus land over 24,0000 is a super adequacy. Not saying that is THE way to solve your situation , but it might be.

If market indicates a larger lot is worth more, at what point is a lot too big to the point buyers may not pay anything more for it over a certain size?
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
what are the chances of a zoning change on the 100 acres of the currently zoned Open Space that could potentially obstruct the view?
That is what you were hired to figure out.

Trying to figure out what the 1 acre is worth- Is that excess land worth anything?
Would somebody pay $1 more for a house on 1 acre as opposed to a typical lot? If yes, then it is worth something. Your issue is how much. Have you even investigated how much the golf course owner is selling the land for? The subject clearly acquired land. Have there been any inquires? At what price(s)? How long?

I know you know this is a complex assignment and doesn't reflect a typical property. Did you charge accordingly? Maybe you should.
 

Nevada Life

Freshman Member
Joined
Mar 14, 2014
Professional Status
Certified Residential Appraiser
State
Nevada
That is what you were hired to figure out.


Would somebody pay $1 more for a house on 1 acre as opposed to a typical lot? If yes, then it is worth something. Your issue is how much. Have you even investigated how much the golf course owner is selling the land for? The subject clearly acquired land. Have there been any inquires? At what price(s)? How long?

I know you know this is a complex assignment and doesn't reflect a typical property. Did you charge accordingly? Maybe you should.
 

Nevada Life

Freshman Member
Joined
Mar 14, 2014
Professional Status
Certified Residential Appraiser
State
Nevada
Howard,

Thank you for your reply.

The seller purchased the land from the golf course in 2011. And no, I did not charge accordingly because I didn't know it was going to be this complex. What I'd really like to do is tell the agent that fee is going to be $zzz or find another appraiser. I really want this to go away. I've had this thing sitting on my desk for 3 weeks and told her I'd get to her 1 week ago. Sigh. I have also learned there was a vote last summer to turn the old golf course into a bike and dog park.
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
I didn't know it was going to be this complex.
Lesson learned, check into property details before submitting a fee quote

What I'd really like to do is tell the agent that fee is going to be $zzz or find another appraiser.
You generally could/should have gone back and requested a higher fee due to the atypical circumstances

I've had this thing sitting on my desk for 3 weeks and told her I'd get to her 1 week ago. Sigh.
However, it is now a bit late to go back and request additional fee. You might need to just eat it on this one. But it was a very valuable lesson

I have also learned there was a vote last summer to turn the old golf course into a bike and dog park.
Go talk to the planning department and get current status as well as what the city is looking to happen and any other data you can obtain (Maybe even what other developments have gone through this - hint hint).

The seller purchased the land from the golf course in 2011.
I understand this and it is part of the data for the analysis. However, you need to find out if the golf course owner is still selling land and if so for how much and if anyone has made inquiries in the past and what became of those inquires.
 

Michael S

Senior Member
Joined
Mar 18, 2009
Professional Status
Certified General Appraiser
State
New Mexico
Sounds like surplus land, not excess land. Pretty important distinction. Excess land means it has a separate highest and best use and could be sold separately. Surplus land just means its extra land and the value may be anywhere from $0 to a lot more.

How much did the homeowner pay for it when they bought it? That's going to be your best comp. Now if they paid $50,000 it may only add $20,000 in value if the next buyer doesn't care as much about preserving their view and having a larger backyard. Imagine if you had two houses on similar building lots abutting a steep slope but one owned a few hundred feet down the slope. Do you think a typical buyer would be willing to pay much more for the property that has some extra land that is essentially unusable? Maybe a bit more, maybe nothing at all.
 

EddieB

Elite Member
Joined
Feb 17, 2005
Professional Status
Certified Residential Appraiser
State
North Carolina
I understand this and it is part of the data for the analysis. However, you need to find out if the golf course owner is still selling land and if so for how much and if anyone has made inquiries in the past and what became of those inquires.
Off the top of my head, I'd say the answer for the value of this addl site would be answered by researching for the answer to this question
 

BNICK

Junior Member
Joined
Jul 9, 2007
Professional Status
Certified Residential Appraiser
State
Illinois
surplus land is that , it does not contribute any value, make the distinction and report
 
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