Handling excess vs surplus land

[Nick1985]

Just curious about how different appraisers handle excess vs surplus land. I'm aware of what the technical definitions are, and that if considered excess then hypothetical conditions come into play and you don't give value for the appraisal. But what about when the difference between the two is pretty close?

For example, a recent appraisal had a residence with 2 parcels. The residence is completely on one parcel. This property sits on the outer edges of a small rural town on a small not densely populated street. Could the additional parcel be separated? Yes. Could the parcel physically support individual development? Yes. Is it likely that the parcel would sell easily for development if listed separately? No. Is it already fenced and has amenities in use for residence on other parcel? Yes. Would separation of the parcel increase total overall value or support a separate highest and best use? I don't believe so.

Why is it necessary to not give excess land any valuation? I think technically a situation like this the parcel would be excess land, but really, I would consider it surplus since I don't see any increase in value, different highest or best use, or any real likelihood of it being successfully separated, but I also wouldn't completely rule out the possibility. Especially when considering an appraisal for a sale. The additional land is obviously a driver of some value for the buyer. It just doesn't seem correct in my opinion to provide no value to it just because it could technically be excess land or have a possibility of being separated.

 

[Dublin ohio]

Taking into consideration your statement concerning the marketability of the "excess" land. You have already answered the HBU question and the additional parcel is actually surplus land. But why would you not give it some value

 

[Gobears81]

A market that does not have strong development demand might require a longer exposure period and in many cases, the most likely purchaser is an adjoining owner. For weaker markets, I often conclude that the highest and best use, as vacant, is for assemblage, as there is limited to no interest by anyone else. It would have utility to these adjoining owners in the form of a larger site, so unless I missed something, it seems to be surplus land with contributory value.