HBU when property appears to have no value?

[Sadie]

A current value of $0 is a value.

Maybe current value is as is. If it costs too much to demo, than maybe its HBU is as an eyesore. The property sounds doomed, might be best case scenario would be to sell it to someone like a non profit for $1 and let them take on the costs of renovating.

 

[DTB]

Maybe current value is as is. If it costs too much to demo, than maybe its HBU is as an eyesore. The property sounds doomed, might be best case scenario would be to sell it to someone like a non profit for $1 and let them take on the costs of renovating.

Maybe a tech program or a tradesman school would be interested

 

[Sadie]

Maybe a tech program or a tradesman school would be interested

And if they buy it , Bam, there's your value- $1. Meets definition of MV.

 

[Deleted member 152047]

Estimated site value appears to be just a few thousand dollars with a very similar vacant land sale nearby to support this value. The cost to raze and clear the site appears to be more than the actual value of the lot!

You have a negative value here. I have had one in my career and it is a tough idea to wrap your head around.

The highest and best use is likely to "do nothing" assuming that it is a legally permissible use. The hope would be that values improve in the area in the future making it financially feasible to raze or renovate.

If it is not legally permissible to "do nothing" then the highest and best use would likely be to raze the improvements.

 

[Restrain]

Uninhabitable, probably code violations and fines unless something done. HBU, legal, SFR, but economic, demolish and clear the lot for resale. Cost to clear may exceed lot value, so explain and give a Zero value.

 

[DTB]

Fireman training site

 

[Terrel L. Shields]

What happens in some places is that the property is left untouched, it goes to the tax sale after 3 years (at least here) and someone buys it for the back taxes or they don't - i.e- the city/county end up with the property trying to sell it at the tax sale year after year, or they get a ruling allowing them to just dump it. I know a lot of old buildings in downtown Ft. Smith were abandoned and the owners left them to the state. They had to cut the price to get them sold and since many were a hazard, they were either rebuilt or left as vacant parking lots. In fact, the adjacent buildings often had an incentive to purchase for a parking lot as the downtown revived.

 

[The Warrior Monk]

You have a negative value here. I have had one in my career and it is a tough idea to wrap your head around.

It's my opinion that if a property has a "negative market value," it actually doesn't have a market value in the first place. It's difficult wrap one's mind around for the simple reason that in the market, properties never transfer under the conditions required by the market value definition. Thus a negative market value is purely hypothetical.

There is most definitely a value for this type of property, and that value can be negative, but just not market value, because such a value is purely hypothetical. Typically a property is assigned a negative value for accounting or investment purposes, which is not a market value, but another value type.

 

[J Grant]

It's my opinion that if a property has a "negative market value," it actually doesn't have a market value in the first place. It's difficult wrap one's mind around for the simple reason that in the market, properties never transfer under the conditions required by the market value definition. Thus a negative market value is purely hypothetical.

There is most definitely a value for this type of property, and that value can be negative, but just not market value, because such a value is purely hypothetical. Typically a property is assigned a negative value for accounting or investment purposes, which is not a market value, but another value type.

Exactly ( the neg MV thread has been done before but always interesting )

Market value assumes there is a MARKET of buyers for a property - even if that is a niche market of limited buyers or the buyers would only pay a tiny price for a property such as $10 to take it on. But when there is no takers/buyers for a property, it can have a negative value to the owners (or whatever city or state agency gets stuck with it when abandoned ) but there is no market of willing buyers at even a $10 or free. And MV needs a market exposure estimate - what would that look like for a negative MV? 100 years ?

Negative value properties usually only get sold or passed on if the owner repairs or mitigates/gets rid of the adverse condition such as env contamination to make it appealing or useable, or induces an incentive to take it - tax breaks, a city improvement grant etc

 

[ramrcdk]

A current value of $0 is a value.

Actually, now or later IT MAY BECOME negative value if the improvements= hazardous, lot = mowing, upkeep is not done """at least around here""" as City Fines get hefty!!!.

Not your job-to-know; however, the bank/owner/etc may find donating-free to a ____TBD___ or neighbor, etc.

*Nearly had a property like that, but the SOW for the bank evolved into: Ended Up being a Two-Value Two- Appraisal situation that took quite some time with Bids, etc. to complete.
The Fee was fair. *Seems, the Near- Difference was the Lot did have value.