Terrel L. Shields
Elite Member
- Joined
- May 2, 2002
- Professional Status
- Certified General Appraiser
- State
- Arkansas
Interesting copies I got for an appraisal and BPO. The property is in the Arkansas River Valley. Client needs value of minerals after retaining minerals. It was appraised by the "seller" who was donating the property to a charity. It involved something north of 320 acres. The charity obtained a BPO several months later, and the property sold a few months after that spot on the BPO. They sent me both for the copies of the tax cards and legal descriptions.
The BPO had predicted a significantly lower value ($939K v. a range from $675K-$750K predicted by the BPO) and the property sold for $752,000. Hmm. The appraisal was 44 pages and looks "fine". The BPO was 14 pages and had the benefit of a copy of the appraisal. Both agreed upon the four best comparable sales in the area.
The BPO was prepared by a broker specializing in agri-timberland property. They predicted that the appraisal had under estimated the impact of old strip mines. The appraiser recognized the reclaimed land and the two large ponds created (about 3 acres each I am guessing). But he felt it was sufficiently fertile to support grazing and the sales available were similarly situated but none had been impacted by an old strip mine. The BPO suggested that the impact was greater and the land was poor and would not support as many cattle as the appraiser may have thought. They also felt that the land was too poor to attempt a tree growing operation which is of some value in the region. Hmm. Neither had any support to make an adjustment.
But I was impressed by the BPO. I thought perhaps the preparer was also an appraiser, but they were not listed as same on the state website. Again, I have no fault with the appraisal and he lived closer to the area than did the Broker, who was from 90 miles away. But clearly he underestimated the impact of the old strip mine lands.
FYI - this was mined many years ago - from about 100 to 50 years ago. Very little mining has occurred in the area since the 1960s, the late Senator Dale Bumpers was instrumental in getting reclamation money and few of the old (orphan spoils) piles remain in the region. Much of it however had not saved the topsoil. So the reclaimed land is basically lacking in organics. It grows some grass and few of us who are not familiar with the area would recognize it as anything unusual. I think you would need some reclaimed land sales to estimate a difference in value between reclaimed and natural soil...it won't be too obvious otherwise. And without supporting reclaimed sales and were there any to be found in years??? the appraiser had no leg to make an adjustment. Catch 22.
The BPO had predicted a significantly lower value ($939K v. a range from $675K-$750K predicted by the BPO) and the property sold for $752,000. Hmm. The appraisal was 44 pages and looks "fine". The BPO was 14 pages and had the benefit of a copy of the appraisal. Both agreed upon the four best comparable sales in the area.
The BPO was prepared by a broker specializing in agri-timberland property. They predicted that the appraisal had under estimated the impact of old strip mines. The appraiser recognized the reclaimed land and the two large ponds created (about 3 acres each I am guessing). But he felt it was sufficiently fertile to support grazing and the sales available were similarly situated but none had been impacted by an old strip mine. The BPO suggested that the impact was greater and the land was poor and would not support as many cattle as the appraiser may have thought. They also felt that the land was too poor to attempt a tree growing operation which is of some value in the region. Hmm. Neither had any support to make an adjustment.
But I was impressed by the BPO. I thought perhaps the preparer was also an appraiser, but they were not listed as same on the state website. Again, I have no fault with the appraisal and he lived closer to the area than did the Broker, who was from 90 miles away. But clearly he underestimated the impact of the old strip mine lands.
FYI - this was mined many years ago - from about 100 to 50 years ago. Very little mining has occurred in the area since the 1960s, the late Senator Dale Bumpers was instrumental in getting reclamation money and few of the old (orphan spoils) piles remain in the region. Much of it however had not saved the topsoil. So the reclaimed land is basically lacking in organics. It grows some grass and few of us who are not familiar with the area would recognize it as anything unusual. I think you would need some reclaimed land sales to estimate a difference in value between reclaimed and natural soil...it won't be too obvious otherwise. And without supporting reclaimed sales and were there any to be found in years??? the appraiser had no leg to make an adjustment. Catch 22.
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