Doing a land appraisal?

[Mike Kennedy]

COMPETENCY RULE​

Prior to accepting an assignment or entering into an agreement to perform any assignment, an appraiser must properly identify the problem to be addressed and have the knowledge and experience to complete the assignment competently; or alternatively, must:
1. disclose the lack of knowledge and/or experience to the client before accepting the assignment;
2. take all steps necessary or appropriate to complete the assignment competently; and
3. describe the lack of knowledge and/or experience and the steps taken to complete the assignment competently in the report.
Comment: Competency applies to factors such as, but not limited to, an appraiser’s familiarity with a specific type of property, a market, a geographic area, or an analytical method. If such a factor is necessary for an appraiser to develop credible assignment results, the appraiser is responsible for having the competency to address that factor or for following the steps outlined above to satisfy this COMPETENCY RULE.​

If an appraiser is offered the opportunity to perform an appraisal service but lacks the necessary knowledge or experience to complete it competently, the appraiser must disclose his or her lack of knowledge or experience to the client before accepting the assignment and then take the necessary or appropriate steps to complete the appraisal service competently. This may be accomplished in various ways, including, but not limited to, personal study by the appraiser, association with an appraiser reasonably believed to have the necessary knowledge or experience, or retention of others who possess the required knowledge or experience.​

 

[valuequestor]

Buddy Up

Good Afternoon,

I have never written on here, so please bare with me. I am doing an appraisal on a property that is a REO, however in the process it has caught on fire, so the lender is wanting me to do either a Land Value appraisal (which I have never done) or an appraisal as is. Does anyone have any advise, websites or anything that can help me. Thank you for your time.

Amy Shepherd

Amy, you really need to work directly with an appraiser who is experienced with this type of assignment. You'll get appropriate field and report writing experience for yourself and maybe you'll be ready to go it alone next time.

 

[Mike Boyd]

Is this an ordinary city lot with all utilities available? Most MLS systems have an option to search for vacant land/lots. If there are plenty of comps you should not have a problem. Keep in mind, with the subject, the water and sewer fees have already been paid. Most of your comps probably have not. Those fees can cost anywhere from $2,500 to $10,000. If there are NO comps, find a local appraiser who has more experience to help you. The appraisal fee should NOT be discounted!

 

[CJHNV]

Amy,
You've gotten some really good advice already, but I might also add:
There are some really great CA based appraisers on this forum... you might private message one of them and see if they are in your same area - they buddy up.
It would be worth splitting the fee or paying someone to help you with this assignment to gain competency.

This is not a simple assignment

 

[sfvaluation]

sfappraiser

If you have never done a land appraisal this falls into the Competency section of USPAP. You can either withdraw from the assignment or tell your client that you are not currently competent to complete the assignment but will accept the assignment subject to taking the steps necessary to become competent to complete the assignment.

If you take the assignment it could be two or three appraisals (appraisal reports) or opinions of value. One assignment might be based on the home as improved before the fire. Another assignment might be based on the land subject to removal of the damaged improvements. Another assignment might be based on the land as vacant. Opinions of value can also be included in the same report, i.e. the land as vacant and improved. Theoretically, a "complete summary appraisal report" includes a land valuation however the standard 1004 form does not typically include the "grid" for adjustments that a land form would have. In any event, talk to your client and inform them that you can or cannot accept the assignment and if you accept find out exactly what the scope of work is and then take the steps necessary to become competent. This is not that difficult an assignment. The question is what to charge!

Good luck.

 

[Smokey Bear]

Land appraisals are the easiest way to get into major trouble without even knowing it. Partner with someone who's experienced at these.

 

[Lloyd Bonafide]

Land appraisals are the easiest way to get into major trouble without even knowing it.

That's very true. E&O companies would probably prefer that no one ever does a vacant land appraisal, except for CG's. The only kind I would even think about doing is a finished lot, ready to build, with at least decent market data nearby. Anything that is splittable, or is not a ready-to-build lot with all utilities available at the street, and I will generally pass, (quickly).

 

[valuequestor]

Stick-em Up

Back in old Virginny I completed many a vacant land appraisal. Here in California I have been avoiding them. It is after all.....the wild wild west:new_2gunsfiring_v1:

 

[Michigan CG]

Land appraisals are the easiest way to get into major trouble without even knowing it. Partner with someone who's experienced at these.

Seriously, take this post to heart. I would rather appraise a Walgeens than vacant land right now.

 

[Stone]

Seriously, take this post to heart. I would rather appraise a Walgeens than vacant land right now.

I think everyone should take this advice. Particularly if they work in my service area. Nobody should take on land assignments...

I just do not understand the hand-wringing people do when it comes to land. Most land assignments are no different than any other type of appraisal. The thing that makes it hard for some is that they never do vacant land (guess they don't do CAs). Of course there are different types of vacant land appraisals and some are quite difficult. But that goes for any type of appraisal practice, not just land.

(yes, I've heard all the ominous warnings that E&O companies supposedly put out there about land - that just goes back to people being unfamiliar with that type of appraisal)