Interesting Appraisal question

[aztecwolf619]

I have an inquiry on doing an appraisal for a lot that was burned in Rancho Bernardo during the most recent firestorm that swept through San Diego. THe owner wants an appraisal due to the fact that he is being assessed for tax purposes on the value of the lot, with the improvements taken out. Only thing is he bought the property back in '06, so the property has seen some decline, all in lot value. Land assessment is $375,000. There are two questions/concerns that I have with it.

1. It is actually a detached condominium, how would one go about appraising the land assessment on the detached condominium? Lots are approx. 5,000-6,000 sq. ft. There is a lot located directly next door on the MLS for sale, similar burned home, as well as a couple others in the general location/project.

2. There really aren't any comparable sales, only listings, could I make the argument, (listing next door is at $279k) that value can be determined exclusively on listings in the neighborhood? The only sales I have are of similar burned homes, but located on SFR zoned lots...

Any help is greatly appreciated.

Also how long does it honestly take HUD to get the FHA approval, I sent my stuff in 2 months ago, and all I can do is look online to see if I am accepted or not, because no one there can tell me anything, such as if they even have my packet toget approved.

Shannon

 

[Restrain]

I'll give it a shot. In a condominium, there generally is no lot value, etc as all sites, buildings etc are owned in common. What is generally owned is the air inside the unit, with a common overall ownership. You may have a different ownership, so you need to look at the docs for the project.

If there actually is an individually owned site, then you can probably get away with SFR sites. Otherwise, look at the listings and go below the lowest listing as nothing has sold.

JMHO.

 

[aztecwolf619]

Yeah it is listed as a condo on the county use code, has the extra parcel# indicating condo ownership and plat map has no lot lines....I wish I could get some of those nice cookie cutter tract home deals, only getting those nice FHA detached condos, 3 unit purchase with 2 sales in the past 6 months, and construction loans from hell...

 

[Elliott]

When I did assessor work, for a condo project, you'd do a land value
estimate for the project, allocate it across the units, and leave it in
the file. Then you would develop a value for condo units based on
the market and cost. It seems reasonable the assessor would associate
value to the land, since the condo still has rights that hover in space
above the land. I'd think a fee simple parcel of land in the area would
be a reasonably good proxy of the value of the land component to a
condo. The assessor ain't going to sit for a 'zero' land value since the
neighbors would have a fit.

 

[Walter Kirk]

The uses of a lot in condominium owhership are limited by condo rules. You must answer the H&BU question. If similar lots are listed for sale those listings can be considered the upper limit of value. Therefore a similar lot listed but not sold for $279,000 is solid evidence that the subject can't be worth more than $279,000.

 

[Mike Boyd]

I'll give it a shot. In a condominium, there generally is no lot value, etc as all sites, buildings etc are owned in common. What is generally owned is the air inside the unit, with a common overall ownership. You may have a different ownership, so you need to look at the docs for the project.

If there actually is an individually owned site, then you can probably get away with SFR sites. Otherwise, look at the listings and go below the lowest listing as nothing has sold.

JMHO.

I agree with Roger. It is likely that you are talking a PUD of detached homes....not a condo.
You might consider whether or not being in the PUD is worth more because of the common areas. However, I have found that the value of the common area is typically off-set by the HOA fees.

 

[Conservative in Virginia]

took my son about 2 months to hear back from FHA .. actually I do not think he got a letter in the mail.. he just popped up on the website....

just in time... he is getting OUT I hope!

 

[Bill_FL]

Check the records. Is the association sent a tax bill for the land and the common elements of the property? If so, there should be no land value for the units right? If it is a condo (wherein there is no land ownership) how can there be a land value?

 

[Ken B]

I lived in a lakefront subdivision where the developer created small strips of waterfront common areas leading from the public road to the waterfront. Specific strips were designated for the exclusive use of specific non-waterfront lots. The intent was to provide direct and exclusive-use waterfrontage to all lots so that each lot owner could build a private boathouse/dock should they desire.

Normally, common areas owned by homeowner associations, which are intended for use by all members of the HOA, are not taxable. However, as each of these small strips of common area were intended for the exclusive use of specific property owners, they were taxable as real property to the benefiting property owner, not the homeowners association.

In a similar vein, if the condo owner, whose detached improvements were located on a specific plot of land, has the deeded exclusive use of that specific plot of land, that person is likely to be responsible for the taxes on that land, regardless of whether or not they hold title to the land.

 

[Kevin A. Spellman]

If the land assessment appeared on the tax bill prior to the fire, it will be impossible to have it removed or adjusted, however, if the land assessment appeared after the fire, there is an argument.

If there is a 5,000 – 6,000 exclusive use land area for your subject, very hard to argue the land value, unless the cost of replicating the condominium exceeds the total value in the market significantly. This is assuming the $375,000 is correct. Go through the exercise of rebuilding the unit, it may lead you to a reasonable site value for your subject.