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Land Appraisal On Residential Lot. With Slab In Place

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sharon arnold

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Dec 1, 2004
Professional Status
Certified Residential Appraiser
State
Texas
I received a request to do a land appraisal on a residential lot where the neighborhood is already pretty built out. It looks like the home that was on the lot could have burned and they have removed everything, down to the foundation. The driveway, porch, patio and entire slab are still in place. The MLS listing states that they have the plans should anyone want to re-build the house that was originally there. I'm not sure how to approach this one. I have spoken to a couple of builders for a general "cost" for what is in place there to get an idea of it's value it someone had to go in and have the work done. I feel sure the listing agent has taken into account the improvements because there is one other lot that sold recently in the subdivision and it sold for about 30k less. Any ideas? I can't make myself think that a "typical" buyer would necessarily want to rebuild the exact same house unless they were getting a fairly deep discount, which I don't see happening here. Maybe I'm wrong. I've run it by two other appraisers in my area and both say that the improvement would have minimal value. PLUS...where am I going to find a similar lot...with a slab? How can I justify adjustments? Probably should have handed this one back. HA!

Thanks for any help you can give me!
 

Michigan CG

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Professional Status
Certified General Appraiser
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Michigan
You don't say how old the previous home was but I doubt most potential buyers would see any value in the current foundation as tastes constantly change. The porch and patio most likely have no value at all, who is going to design their new home around an existing porch and patio?

This assignment is not really hard. Derive the land value of the property as vacant and subtract the cost of demo of the porch, patio and foundation to derive a value. Don't forget to include a "hassle factor (EI/EP)" for the management/time of having the items removed.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Cost to remove the slab. New home would, over 90% of the time, not work with an existing slab due to design changes, etc.
 

JTip

Elite Member
Joined
Oct 12, 2004
Professional Status
Certified Residential Appraiser
State
Pennsylvania
Cost to remove the slab.

Yep, that's the ticket.

Reference M&S 4th Qtr 2016 Page C-35; slab on grade cost, apply local/regional multipliers and bada-boom.
 

BRCJR

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Gold Supporting Member
Joined
Sep 20, 2005
Professional Status
Licensed Appraiser
State
Virginia
Yep, that's the ticket.

Reference M&S 4th Qtr 2016 Page C-35; slab on grade cost, apply local/regional multipliers and bada-boom.
Why a need to know the cost if it is to be removed?
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
I received a request to do a land appraisal on a residential lot where the neighborhood is already pretty built out. It looks like the home that was on the lot could have burned and they have removed everything, down to the foundation. The driveway, porch, patio and entire slab are still in place. The MLS listing states that they have the plans should anyone want to re-build the house that was originally there. I'm not sure how to approach this one. I have spoken to a couple of builders for a general "cost" for what is in place there to get an idea of it's value it someone had to go in and have the work done. I feel sure the listing agent has taken into account the improvements because there is one other lot that sold recently in the subdivision and it sold for about 30k less. Any ideas? I can't make myself think that a "typical" buyer would necessarily want to rebuild the exact same house unless they were getting a fairly deep discount, which I don't see happening here. Maybe I'm wrong. I've run it by two other appraisers in my area and both say that the improvement would have minimal value. PLUS...where am I going to find a similar lot...with a slab? How can I justify adjustments? Probably should have handed this one back. HA!

Thanks for any help you can give me!

How long has the listing been on the market? That could show market reaction to the price. You say the area is pretty built out... are there any other lots for sale? If so , what are they priced at? If not, is subject desirable due to lack of product? Though I question how many buyers want to build new or can afford to since the terms and financing are more difficult and a wait time to move in... so many vacant lots sit empty (in my area ), for long periods of time, only to sell far below list price...when vacant lots or lots with homes that are torn down sell , including when they sell for high $, they often are purchased by spec builders rather than owners looking to build a dream home. I personally rarely see a negative adjustment for removing a house that is a tear down...the lot is graded, plumbing and permits are in place which seems to compensate for any cost to demolish. Which may or may not apply in your market.

The agent seems to feel the slab and plans existing adds value...why? Imo you have to do more analysis and speak to some RE agents who sell in area to, get feedback.

As far as adjustments, maybe better not to make any and consider the slab/patio qualitatively after all your analysis is made...buyers may be split if they value it or not, and if lot is in high demand due to scarcity they are not going to care much about patio/slab one way or another....the minor cost to remove it vs minor cost advantage to having it there would not be deal breaker.
 
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JTip

Elite Member
Joined
Oct 12, 2004
Professional Status
Certified Residential Appraiser
State
Pennsylvania

BRCJR

Elite Member
Gold Supporting Member
Joined
Sep 20, 2005
Professional Status
Licensed Appraiser
State
Virginia
Uh....because demolition is not free? C-35 is demo cost.
Misunderstood your post "slab on grade cost". I agree.
 

Mark K

Elite Member
Joined
Jan 27, 2004
Professional Status
Certified Residential Appraiser
State
Indiana
Might be able to reuse some/most of the drive. Otherwise, demo and removal cost for a slab and perimeter foundation is about $3-$4/s.f. in this area.

Very unlikely that a future buyer would want to reuse the existing slab.
 

miktay

Senior Member
Joined
Jul 3, 2007
Professional Status
Certified Residential Appraiser
State
Texas
Even if they could reuse it, few, if any would be willing to pay additional for it.
 
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