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Highest & Best Use on Condo

andrew81

Senior Member
Gold Supporting Member
Joined
Dec 5, 2008
Professional Status
Certified Residential Appraiser
State
Illinois
I met an MAI in an AI class and all he did was appraise Golf Courses all over the USA. He said he liked to play golf, and he said this was a perfect match for him.
in my market there was an 18 hole golf course located in a rural area with no subdivisions surrounding it, only recreational wooded land and agricultural land. im not a golfer but according to those in the area that are, in the years past it was a very nice course and was on some kind of national course list. the course owner build 6 small detached rentals on a hill over looking hole 3. when i was still working with my supervisor he appraised it for a local lender/client at not much more than land value. i dont know all the details of his analysis or anything as it was not a part of my training, at this point i was already a certified residential appraiser and we only worked out of the same office. i just remember the course owner coming to the office a few times upset about the valuation.

the course owner must have found a someone to lend on it because a few years later the property went into foreclosure and was for sale while still in operation. (i dont know the details of the agreement or the listing prices but it was definitely still open.) a few years after that it eventually went to auction. it was split into three parcels; the course was sold slightly below fair land value $281,550 and the buyer converted it to pasture, the club house sold for $31,000 and was converted to a single family home, the former golf course owner still owns the parcel with the 6 rental units.

i was recently contacted by an attorney to provide a liquidation appraisal for the parcel with the 6 rental units. the attorney told me the original appraisal was done by someone from florida and the valuation of the entire real estate (golf course and rentals) was over 3 million. being a residential appraiser i turned down the request. it would have been nice to read that appraisal though.
 
Last edited:

Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Golf course are a dime a dozen in NC/SC. Especially along coast. The coastal Golf Courses rely heavily on the tourist. In the heat of the summer you will see a lot of Golfers who are on vacation with their families(yankees). The draw for those golfers is the Beach because of the family; wife & kids and themselves. Really good serious players come mostly in the fall and even through out the winter and spring. They don't bring their families, nope! Four Dudes and they play competitively. Hotels room rates are cheap but green fee's go up. Best way and cheapest to do that is get a Hotel/Golf weekend package. The overall reason they do well is the influx/tourism. That's the multiplier. Problem with a Golf Course is the maintenance and overall care. Greens especially! They are sensitive to heat/drought and disease.

Since this thread is about Condo's...they are well suited for Golf Courses. IMO Higher density on less land area. Cheaper construction cost. etc

I am no expert in Golf Courses.
 

sputnam

Senior Member
Joined
Apr 24, 2012
Professional Status
Certified General Appraiser
State
North Carolina
SO I completed a 1073 condo in a 55+ community where all the units in this community are basically the same. Large development, all condos. The 1073 form already has the highest and best use check box. It is checked off yes. Since this is a condo, do I really need to elaborate further on Highest & Best use?
On SFR's I always add an addendum and discuss this in further because of the land and improvements. Why would the client ask me to elaborate on the Highest & Best Use for this condo? Makes no sense.
USPAP requires that you provide comments that summarize the support and rationale for your opinion of HABU. It can be very simple...depending on the situations... you might just say something like...'Based on current zoning and surrounding development, the Highest and Best Use of the subject property has been determined to be its present use.' Of course, you can be as wordy and as elaborate as you choose.
 

glenn walker

Elite Member
Joined
Oct 11, 2006
Professional Status
Certified Residential Appraiser
State
California
SO I completed a 1073 condo in a 55+ community where all the units in this community are basically the same. Large development, all condos. The 1073 form already has the highest and best use check box. It is checked off yes. Since this is a condo, do I really need to elaborate further on Highest & Best use?
On SFR's I always add an addendum and discuss this in further because of the land and improvements. Why would the client ask me to elaborate on the Highest & Best Use for this condo? Makes no sense.
Yes answer the question and make it short and sweet-The Subjects H & B use is for a condominium and therefor it's current and legally permitted use is the Subject's Highest & best Use : )
 
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