Horse Farm Appraisal

[CATHY ZACCARDELLI]

I have just been asked to do a "quickie" appraisal on a 44 acre horse farm with a 1,088 sf farmhouse, 1,280 sf barn, 200 x 100 indoor arena, 19,008 sf/52 horse stall out building; 3600sf indoor arena, 2304 sf feed storage bldg, 5,400 sf equipment garage and 4 lean to's. The SEV is over $800,000. The agent has an offer for $499,000 CASH. I proposed a narrative appraisal vs a gpar. He wants a less complicated approach!

 

[Michigan CG]

Quickie would be two weeks with a $2,000 fee including an income approach and a cost approach. Defining external obsolescence on this will be quite challenging considering the users of such facilities are spending discretionary $$ and those types of properties have suffered the most in SE MI.

 

[RustyLingerfelt]

Have done a few but note in our neck of the woods this would be considered complicated and require a CG appraiser. I don't know about where you are but there is no such thing as a quickie complex appraisal! Just saying!

Rusty

 

[stefan olafson]

Not a 'Quickie', if you're not a CG with a ton of experience, horse farms are not a place to cut your teeth! They are so specialized and complex they just can't be done on a GPAR or a quickie narrative. Fee, I would charge well over $3,000 and require up to a month to put it together.

 

[Financially Feasible]

I have just been asked to do a "quickie" appraisal on a 44 acre horse farm with a 1,088 sf farmhouse, 1,280 sf barn, 200 x 100 indoor arena, 19,008 sf/52 horse stall out building; 3600sf indoor arena, 2304 sf feed storage bldg, 5,400 sf equipment garage and 4 lean to's. The SEV is over $800,000. The agent has an offer for $499,000 CASH. I proposed a narrative appraisal vs a gpar. He wants a less complicated approach!

I have several questions.

What is the purpose of the appraisal?

Why would anyone want a "quickie" appraisal?

SEV = Seller's estimate of value?

Does your license level allow you to do such a property?

Even if you're ok license-wise, have you ever done one of these before? To me, the only thing that could be "quick" about this assignment is if you found someone who specializes in this property type and has a small treasure-trove of data.

I don't like the smell of this one bit... call me crazy.

 

[stefan olafson]

I agree with Ed, just wasn't as focused in my response.

 

[CATHY ZACCARDELLI]

Quickie

I totally agree that there is no such thing as a quickie appraisal and I told the agent that it would have to be narrative report. It is a residential property and not a business. I am a CR and not a CG. I agree with all of your comments... Thanks so much.

 

[CATHY ZACCARDELLI]

I have several questions.

What is the purpose of the appraisal?

Why would anyone want a "quickie" appraisal?

SEV = Seller's estimate of value?

Does your license level allow you to do such a property?

Even if you're ok license-wise, have you ever done one of these before? To me, the only thing that could be "quick" about this assignment is if you found someone who specializes in this property type and has a small treasure-trove of data.

I don't like the smell of this one bit... call me crazy.

SEV is State Equalized Value

 

[stefan olafson]

Cathy,

Your description indicates it's far more than a residential property, you described a horse ranch without pasture, the buildings you mentioned are specialized agriculture type buildings and no one other than an experienced appraiser with years of work in the horse business should even consider completing this type of appraisal. Where would you get cost information, how would you quantify and correctly develop depreciation for each type of building? Is there no income generated from the riding arena? A 52 horse stall barn is not typical for a residential property?

Please consider associating with an appraiser knowledgable on this type of property if you decide to move forward with it. I think a very specific scope of work would also be appropriate.

 

[The Warrior Monk]

It is a residential property and not a business.

Just to clarify, licensing is divided by "residential" and "commercial." As a simple example, a 100-unit apartment complex is a residential use, yet is clearly outside the scope of practice of a residential appraiser.

The division, at least in my interpretation, has more to do with methodology. In the case of the property described, an income approach may be appropriate, which is outside the skill set of the average residential appraiser.

The first thing that I noticed about the property is the residence appears to be insignificant relative to the other improvements. Also, most homeowners don't have 52 stalls if they want to keep horses as pets. I strongly recommend associating with a CG on this particular project if you haven't done such an appraisal before.