Land adjustments

[Bamba]

I'm doing an appraisal on a home that has beautiful views of Susquehanna River. No sales in the neighborhood with similar location. All lots in the development are sold vacant and then later on, they build the houses, but no resales in the last couple of years.
I have two comps with more land than subject but they don't have any river views...another one of my comps (an outdated one) has similar views with subject but more acreage...When I do my site adjustments, I'm thinking of adjusting more per acre difference for the one with location and view similar to the subject and less per acre for the ones with no view...am I wrong in my thinking? Lots are selling next to the subject for 260K, 270K and 380K for one acre lots...compare to 100K-150K for 3-4 acres lots in other areas

What do you guys think? Can it show as inconsistency in the report?

 

[Mztk1]

Take the one from a couple of years ago and compare it to one without the view on similar acreage from a couple of years ago and apply a percentage adjustment.

It isn't perfect, but it is a starting point.

 

[PropertyEconomics]

Why not compare total dollar to total dollar if you have the data to estimate the land value underlying your subject and all your sales.

 

[Bamba]

Hmm...I'm not sure I follow you ProperyEconomics...

 

[PropertyEconomics]

Subject Land Value ..... $400,000
Comp 1 Land Value ..... $300,000 ... Adjst +$100,000
Comp 2 Land Value ..... $500,000 ... Adjst -$100,000

etc

Estimate the total value for each of the parcels ... your subject and your sales.

 

[Bamba]

That's a good idea...thanks!

But then there won't be any location adjustments anymore right?...I would be kind of double dipping...

 

[PropertyEconomics]

That's a good idea...thanks!

But then there won't be any location adjustments anymore right?...I would be kind of double dipping...

Make it as a site or a location adjustment or explain that it consideres both adjustments in one calculation. If done correctly it will reflect not only size but location as well. When you have such limited data it is obvious that you cant measure each separately with great confidence but you can estimate both with market data.

 

[Bamba]

Thanks a lot!

 

[Mike Boyd]

Hmm...I'm not sure I follow you ProperyEconomics...

Nor do I. ....................

 

[Bamba]

here is what i got...

-subject has 0.86 acre lot, land value 225K (very desirable location, river view etc)
-comp 1 has 1.12 acres lot, land value 150K (further away from the river) - adj +75K
-comp 2 has 3.82 acre lot, land value 150K - adj +75K
-comp 3 has 5.45 acre lot, land value 100K (middle of nowhere, no views of
anything) - adj +125K
-comp 4 has 8.81 acres lot, land value 600K (same view as the subject) - adj -375K