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Help! Value the Improvement only

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Mike Keller

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Virginia
Any advice on best solution to the following appraisal problem. Twelve acres with an improvement (house). The client wants me to value the improvement only; the house will be sold and moved to another location.
 

Terrel L. Shields

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You need to find a good house mover and ask them about the price of such houses. They are much depreciated compared to simply allocating a value to a dwelling on a site. Any recent airport or large road project nearby that displaced houses? Ask what they sold for. The last two I know of sold for $1800 and $5000 respectively.
PS-you are valuing (temporarily) personal property not real estate.
 

Michigan CG

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Appraise it and subtract the land value. Make sure you discuss location.
 
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Talk to some house movers -- the salvage value of the improvements to be moved may or may not be greater than zero.

The cost of moving, placing, utilities, and repairing the home on the new site are all negatives, which could reduce the present value to zero. Still, a zero value is more than the cost of demolition, and if the home has a positive value on a new site (after deducting all costs) it could make sense.

But a house mover should be able to give you a quick estimate of present value -- what they would give for the house, if they were moving and placing it as a spec.
 

The Warrior Monk

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I'd have a discussion with the client to determine exactly what they want. The value of the improvements when attached to the land are contributory; when they are not you're dealing with personal property.
 

PropertyEconomics

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Find sales of other improvements that have been moved, where the improvements only were purchased, and you have comparables.

Call house movers and see if you can find some homes that have been moved and chase down their sales prices.
 
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Mike Keller

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Virginia
Comparable sales are not available. The cost approach does not work due to potential damage from the move. Can I develop market value of the land and improvements; then develop a second appraisal or more detailed analysis of land value; present the completed report to the client and let him decide what he wants to do? Of course I will explain to the client the improvement will be considered personal property when moved and subject to potential damage.
 

The Warrior Monk

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New York
Comparable sales are not available. The cost approach does not work due to potential damage from the move. Can I develop market value of the land and improvements; then develop a second appraisal or more detailed analysis of land value; present the completed report to the client and let him decide what he wants to do?

This determines the contributory value of the improvements, which is site specific.

Of course I will explain to the client the improvement will be considered personal property when moved and subject to potential damage.
If moved, you're dealing with personal property, and the aforementioned methodology does not determine the value of the personal property.

Intended Use is the driving force in determining what value type, and what methodology, you will need to use. For example, if the improvements are being donated and the owner is using it as a writeoff, you have one value type. If he is selling the home, you have another value type.
 

stefan olafson

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North Dakota
The client wants me to value the improvement only; the house will be sold and moved to another location.

If sold off you are dealing with personal property. Check your yellow pages, there has to be a house mover somewhere within 500 miles of your location. Contact them and get the low down on their experiences.

In 1997 my area had a monstrous flood, the aftermath included the relocation of a lot of homes. Some were sold and moved off, some were moved by the owners. Values ranged from a few thousand dollars to a substantial sum. Two houses in particular show the variety in value.

#1. A large very nice, newer ranch style, appraised on site for over $1 mil was sold for just over $100,000 and moved to a new location. There the new owner got quite a house for the cost of the move.

#2. A house mover was contacted by an individual to have a house moved off a large residential parcel. The mover quoted a fee to move the house to the outskirts of the city, thinking the owner had a new site picked out. The home owner accepted the bid, the house was moved. When they had it at the city limits, the mover called and asked where the owner wanted his house moved to? The owner said, what house, I asked you to move it off my site, it's off, the house is yours....

So, you can't value the site and offer contributory value for the personal property. You have to go to the market, wherever that may be.

It's going to be more difficult but it will be an educational effort.
 

Terrel L. Shields

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Arkansas
The cost approach does not work due to potential damage from the move. Can I develop market value of the land and improvements; then develop a second appraisal or more detailed analysis of land value; present the completed report to the client and let him decide what he wants to do?
The value of that is likely to be radically different, perhaps a full magnitude or more. Houses sell cheap when they have to be moved, even mobile homes...which are much easier to move, nevertheless same principal. Sales App only. Personal Property. House mover prices.... what you suggest is not credible unless the person is trying to determine a pre-move value to the dwelling on the site.
 
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