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Extraction Method

CANative

Thread Starter
Elite Member
Joined
Jun 18, 2003
Professional Status
Certified Residential Appraiser
State
California
It's very rare that I can't find enough sales of undeveloped lots or land to use for site value opinion in the cost approach. Working on a newer property of nice houses on small lots (10,000 sf ±) and no lot sales for many years. So I had no choice but to use the extraction method. It's a pet peeve of mine to read reports that always say "site value by extraction" and just leave it there. So I made a little page in Excel to show my work in the report.

Does this seem about right?
 

Attachments

Basically Rectangular

Junior Member
Joined
Mar 1, 2018
Professional Status
Licensed Appraiser
State
Virginia
It's very rare that I can't find enough sales of undeveloped lots or land to use for site value opinion in the cost approach. Working on a newer property of nice houses on small lots (10,000 sf ±) and no lot sales for many years. So I had no choice but to use the extraction method. It's a pet peeve of mine to read reports that always say "site value by extraction" and just leave it there. So I made a little page in Excel to show my work in the report.

Does this seem about right?
I think it's great; simple, easy, and compliant.
 

KHS445

Member
Joined
Aug 20, 2011
Professional Status
Appraiser Trainee
State
Michigan
Just asking the question. Is there something obviously different with either the site or the improvements associated with sale #3? Appears to be an anomaly which might be explained, at least in part, by upgrades, view, etc.
 

CANative

Thread Starter
Elite Member
Joined
Jun 18, 2003
Professional Status
Certified Residential Appraiser
State
California
I wondered about that also. The residential structure is one of the smaller (less GLA) than some, and is older by about 10 years but still in very good condition. It's sort of unique in that the lot is on a corner (a rounded sort of corner) and the dwelling is at a 45 degree angle to the corner.

I just gave less consideration to the high and low and stuck to the middle range. I suppose I could have put in a few more sales but I was in a hurry. Caseload is extreme right now.
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
I apologize in advance, I didn't look at the attachment. My input is that often recent vacant land sales, typically considered the gold standard of market data, and the contributory value of the land with existing improvements is not a parallel value. Maybe its because in some areas there is substantial available vacant land and in others very limited availability. I find that a combination of research and use of extraction and simple direct sales is required to wrap my mind and analysis around the current site values. Its not as cut and dried as some would have you believe. MHO.
 

CANative

Thread Starter
Elite Member
Joined
Jun 18, 2003
Professional Status
Certified Residential Appraiser
State
California
Most SFRs in this old city sell for $200k to $300k. These sell for $500k+ It's a new subdivision created as a PD. People would buy the lots and choose their plan. No HOA or dues. Strict CC&R's and an architectural committee. It's unique to this city. The last one I did close by was a subdivision created in the 60's. Older homes of lesser quality and little conformity to each other. I was able to stitch together a few sales from around the city. But they are nothing like this subdivision.

There is a giant subdivision northwest in a heavily wood area. Lots of lot sales and listings. But they go for $5000 to $10,000. That area is nothing like this one.

FWIW... the site value opinion extracted from the sales, used in the cost approach, resulted in a value indication pretty close to that of the SA. A bit higher because I added for complex landscaping and a very expensive standby generator. Reconciling to the upper range but less than the CA. IMO, standby generators are of intense interest now after the big power shut downs and fires.
 

Lee in L.A.

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
I could ask my dentist tomorrow.
But I think they plan to use those wicked looking pliers. :cautious:
 
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