Excess or surplus land?

[J Grant]

I spoke to FHA about the adjoining lot. They stated that the second lot cannot be considered excess land because it has a pole barn on it. They stated that excess land is only excess if it is vacant.

There is no second excess lot if both lots individually are not large enough per zoning to support a house !!!!

The fact that there are two folio Tax ID numbers does not matter - if both lots are needed to meet minimum zoning requirements per what you stated and the lot ended up bigger than needed for surplus land, I pasted in bold what you wrote below - what is the minimum site size zoning??

Neither lot meets current minimum site size zoning ordinances but are grandfathered in and can be rebuilt if it burns down. Both lots combined would meet zoning.

FHA is F** up too IMO for saying av lot can not be considered excess because it has a pole barn, but that is beside the point

 

[Trihard]

There is no second excess lot if both lots individually are not large enough per zoning to support a house !!!!

The fact that there are two folio Tax ID numbers does not matter - if both lots are needed to meet minimum zoning requirements per what you stated and the lot ended up bigger than needed for surplus land, I pasted in bold what you wrote below - what is the minimum site size zoning??

Neither lot meets current minimum site size zoning ordinances but are grandfathered in and can be rebuilt if it burns down. Both lots combined would meet zoning.

FHA is F** up too IMO for saying av lot can not be considered excess because it has a pole barn, but that is beside the point

Yes, I understand this.

The reason I posted what FHA said was because I found it different, than what has been told to me. FHA wants excess land to be vacant, meaning no sheds, out builds or pole barns. This is typical for the industry through. You get different information from different sources and no one knows who is correct.

 

[Zephyr999]

Yes, I understand this.

The reason I posted what FHA said was because I found it different, than what has been told to me. FHA wants excess land to be vacant, meaning no sheds, out builds or pole barns. This is typical for the industry through. You get different information from different sources and no one knows who is correct.

Sorry???
That's why it's labeled excess LAND and surplus LAND.
Appraisal 101

 

[alebrewer]

You don't have excess land. As a side note: even if both lots met minimum lot size requirements per zoning, that doesn't automatically make the 2nd lot excess. The market determines excess. In my neighborhood it's VERY common for homes to have 2nd 'buffer' lots - the lots technically could be sold off separately, but the market prefers the buffer lots, hence they're not excess. Just takes more splainin by the appraiser.

 

[J Grant]

You don't have excess land. As a side note: even if both lots met minimum lot size requirements per zoning, that doesn't automatically make the 2nd lot excess. The market determines excess. In my neighborhood it's VERY common for homes to have 2nd 'buffer' lots - the lots technically could be sold off separately, but the market prefers the buffer lots, hence they're not excess. Just takes more splainin by the appraiser.

The market preference does not determine what excess land is; the zoning determines it. If technically they could be sold separately, that is the definition of excess.


The fact that owners prefer to keep the second lot there for buffer/ privacy does not change the fact that, legally, it is a second lot that can be sold and built on. Market preferences can address HBU or analysis to keep vs sell, but it is what it is. Either a lot can be sold independently of the other lot, to be built on, or t can not.

 

[Mark K]

In my neighborhood it's VERY common for homes to have 2nd 'buffer' lots - the lots technically could be sold off separately, but the market prefers the buffer lots, hence they're not excess.

I have to disagree with that concept. The 'buffer' lots are excess but are being used as surplus. If the lot has its own legal, parcel number, and can be built on within the restrictions of the zoning ordinances, it is, by definition, excess. And it doesn't matter if both lots are on the same deed; they can be sold separately.

 

[alebrewer]

Think of it this way: remove the zoning requirement. You have a 20 acre parcel that CAN be subdivided. How do you determine if the property has excess land? You look at what the market is doing. If you are in a rural area where land is cheap, then it may be common for the entire 20 acres to support the existing improvement. OTOH - in markets with higher population concentration, you might find that only 5 acres is required to support the existing improvement. Remember - the definition of excess land is land that: (1) can be subdivided, and (2) is not needed to support the existing improvement. If the market determines that 2 lots are required to support the existing improvement, the land is not excess.

That said - my input is provided simply to offer folks fodder so that they can make up their own minds about what is, and what isn't, best for them. I'm no one's judge, and I'm not going to tell anyone else what they should or shouldn't do. It's their signature, not mine. For appraisals with my signature - the market decides what is excess land, not zoning requirements.

 

[J Grant]

But we do not remove zoning requirements. Certain things exist in appraisal outside of our personal opinion, such as the market decides what is excess land, - a definition exists for what comprises excess land and we are supposed to follow it.

 

[J Grant]

We real estate appraisers call this surplus land. Here’s the definition from the Real Estate Appraisal Dictionary (Fifth Edition):​

“Land that is not currently needed to support the existing improvement but cannot be separated from the property and sold off. Surplus land does not have an independent highest and best use and may or may not contribute value to the improved parcel.”




If only I could sub-divide.

Since you’re a 1/4 of an acre short, zoning doesn’t allow you to split your land into multiple lots. ​

You’re stuck with this extra land, and will indeed spend a lot of extra time mowing your huge lawn.​

But lets say, hypothetically, that the state of Maryland only required a lot to have an area of 1/2 an acre. Now you have what we call excess land. Here’s the definition:

“Land that is not needed to serve or support the existing improvement. The highest and best use of the excess land may or may not be the same as the highest and best use of the improved parcel. Excess land may have the potential to be sold separately and is valued separately.”

If this were the case, then you and your family can sell a part of your lot, because zoning would allow you to sub-divide your land. ​

 

[alebrewer]

But we do not remove zoning requirements. Certain things exist in appraisal outside of our personal opinion, such as the market decides what is excess land, - a definition exists for what comprises excess land and we are supposed to follow it.

And that definition does not include anything about zoning requirements. To wit: "Excess land is defined as “land that is not needed to serve or support the existing use. The highest and best use of the excess land may or may not be the same as the highest and best use of the improved parcel. Excess land has the potential to be sold separately and is valued separately”

Zoning regulations are PART of the analysis required to determine if the 2nd lot is excess or not, but not the only part. The more important part - IMO - is whether or not the 2nd lot is required to support the existing improvement.

As mentioned earlier: Follow what you want to follow. It's your signature.