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improvments only appraisal

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SoCal Appraiser

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Joined
Dec 22, 2003
Professional Status
Certified Residential Appraiser
State
California
Hello,

I recenly accepted a request for an appraisal of improvments only. Subject is apprx 1,400 sf SFR. I would like to hear from someone who has some experience with these...

I'm doing it on a 1007 using marshall and swift. Other than sketch, photos, 1007, assumptions / conditions, is there anything else I need?

If anyone (with experience in these types of appraisals) thinks I am way over my head, let me know. Assignment seems simple enough, and numbers seem right (got them from m&s and double checked with a couple of local contractors and a real estate developer). I am just a bit puzzled about how to present the report.

k
 

Mr Rex

Elite Member
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Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
What definition of market value are you using? Is there a market value for improvements only?
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
I surmise that the assignment is for...replacement cost new...reproduction cost new...one of those two, only the depreciated cost...what?!?!?

What is the Intended Use of your appraisal?

Your post is a bit too cryptic for me to offer any advice.
 

Michigan CG

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Michigan
I would do more than a Cost Approach. Also do a SCA and extract the land, giving you two approaches to value, but then again we need to know the purpose of the appraisal.
 

SoCal Appraiser

Sophomore Member
Joined
Dec 22, 2003
Professional Status
Certified Residential Appraiser
State
California
Replacement cost less depreication. Intended use is for tax purposes. client is donating improvments (that's right, they will have them hauled away. City says they have historical value, however, that is not true. There is no historical value, there is a letter from the state that there is no historical value. One may argue that local authorities may have more say in this matter, but it is clear to me that the city is wrong and there is no historical value).
 

SoCal Appraiser

Sophomore Member
Joined
Dec 22, 2003
Professional Status
Certified Residential Appraiser
State
California
I would do more than a Cost Approach. Also do a SCA and extract the land, giving you two approaches to value, but then again we need to know the purpose of the appraisal.

I was thinking about doing SCA, but subject is not very similar to any of the other houses around (sits on commercial lot, poor condition in relation to comps, large lot in relation to lot). The improvments may not have any contributory value to the lot b/c H&BU is not SFR.
 

Michigan CG

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Michigan
I was thinking about doing SCA, but subject is not very similar to any of the other houses around (sits on commercial lot, poor condition in relation to comps, large lot in relation to lot). The improvments may not have any contributory value to the lot b/c H&BU is not SFR.

But your assignment the way I read it is to value the improvements and not consider the lot. Therefore wouldn't Highest and Best Use of the land not be relevant?

SCA extract land and you have a second approach to your assignment of improvements only.

Doing a Cost Approach you are not considering Highest and Best Use wither are you?

Two bullets are better than one, especially when doing something for the IRS (or for the IRS to view).
 

SoCal Appraiser

Sophomore Member
Joined
Dec 22, 2003
Professional Status
Certified Residential Appraiser
State
California
But your assignment the way I read it is to value the improvements and not consider the lot. Therefore wouldn't Highest and Best Use of the land not be relevant?

SCA extract land and you have a second approach to your assignment of improvements only.

Doing a Cost Approach you are not considering Highest and Best Use wither are you?

Two bullets are better than one, especially when doing something for the IRS (or for the IRS to view).

If improvments are obsolete, SCA extract land will give negative value (current use is residential, therefore residential comps. But lot is commerical zoned / more valuable than current SFR use). Finding commercial zoned SFR comps wihtin reasonable distance / time will be next to impossible. I can do SCA for lot as vacant, but that will not give me anything for extraction.
 

Terrel L. Shields

Elite Member
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Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
If they are going to haul off the house, then the value is the value of the house sold for same. I know houses that have sold from $500 to $10,000 to be moved. A local mover will move say 30 miles for about $15,000-20,000. Then you remodel. It is economic to do so, but the sale prices are generally quite low.

If you are asked to value the house "as is" but separate out the land value, then by all means do so but make sure they are not expecting the value of the house as if it is going to be moved. Same with Mobile homes. On site value is different from a value for them to be moved.
 

Joyce Potts

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Feb 6, 2005
Professional Status
Certified Residential Appraiser
State
Florida
I thought appraisers were only licensed to appraise REALTY.

That's why I always pass on those requests, UNLESS they want the whole enchilada. If they want to get to their objective via my cost approach, that's their prerogative.
 
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