Land Appraisal

[Peanut24]

Hi,
I'm in CA and Im doing a land appraisal in the Berkeley hills which is zoned for SFR. I'll try to explain this as clearly as I can.
The subject lot was at one time owned by the 2 neighbors on either side. (Tenancy in common interest) Back in the 70's the owner of the right half purchased the left half from the other owner and now owns the entire parcel. But there is a restrictive covenant which does not allow the current owner to built a structure on the left half the lot. It can only be built on the right side. On the left they can only put retaining walls, landscaping, etc. The lot is roughly 119'x47' (L x W).
Plans for a house already exist which adhere to the restrictions but there are no immediate plans to build. So the lot can still be used for SFR purposes. My question is how measure the effect on value and how to support any adjustment that needs to be made. I don't know how to find a comp with similar restrictions.
Any advice on how to handle this would be greatly appreciated.
Thanks in advance.

PS. The covenant stays in effect with future owners.

 

[stefan olafson]

Try find other sales of similarly zoned vacant parcels with restrictions on them. You probably won't find just the exact same restrictions as your subject, but you may find a trend based on the restrictions on other sales.

 

[CBBoston]

If only half the lot can be used for a structure that only leaves 23.5 feet. That's pretty narrow. Are there side set back in the zoning code that would reduce that even further?

 

[Webbed Feet]

If only half the lot can be used for a structure that only leaves 23.5 feet. That's pretty narrow. Are there side set back in the zoning code that would reduce that even further?

Boston,

I rather suspect you split the lot in half the wrong way with that comment.

Webbed.

 

[Webbed Feet]

Hi,
I'm in CA <..... snip....>

You have my sympathies.

and Im doing a land appraisal in the Berkeley hills which is zoned for SFR.

So the entire Berkeley hills are zoned single family residential huh? Interesting!

I'll try to explain this as clearly as I can.

I hope so.

The subject lot was at one time owned by the 2 neighbors on either side. (Tenancy in common interest) Back in the 70's the owner of the right half purchased the left half from the other owner and now owns the entire parcel. But there is a restrictive covenant which does not allow the current owner to built a structure on the left half the lot. It can only be built on the right side. On the left they can only put retaining walls, landscaping, etc.

Nifty.

The lot is roughly 119'x47' (L x W).

Nice, trivia!

Plans for a house already exist which adhere to the restrictions but there are no immediate plans to build. So the lot can still be used for SFR purposes.

And this information is according to whom?

My question is how measure the effect on value and how to support any adjustment that needs to be made.

So how do you measure anything in any appraisal for any affect on value and support any adjustment for anything?

I don't know how to find a comp with similar restrictions.

Ahhh! The real problem! This is caused by those who never learned things the old fashioned way. Sweetheart, you pull up a bunch of land sales, dust off your shoes and go to the jurisdictional authorities department where deeds are recorded? And then you research the deeds of all of them! It's great fun. Give it a try.

Any advice on how to handle this would be greatly appreciated.

My best advice. Check the transaction value on this and consider your licensing before you proceed. Next, keep in mind, more appraisers bite the dust seriously from doing land appraisals than just about anything else. Yes, getting sued over GLA mistakes is way up on the list, but bare land appraisals are right at the peak of trouble as well. Anyone that does them without a detailed engagement contract with any needed EAs or HCs, and doesn't know how to research comps, probably should be doing other work instead.

Thanks in advance.

Yer Velcome!

Webbed.

PS. The covenant stays in effect with future owners.

P.S. Good information!

 

[Mztk1]

If you don't have land sales, or if you are unsure where to start, allocation is a good tool.

Your lot is limited in the size of a house you can build and the size of the house usually limits the quality. Consider the set back requirements (front/rear/side), building height limitations, etc. and build the largest house possible with all standard market expectations (1 or 2 car garage, patio, porches, room for a pool). Once done, determine the total value of the improved property by finding similar comps (the highest and best possible residential improvement that would not be an overimprovement for its size) then determine land and building ratios in the market. From there you can garner an idea on the value of the lot.

At least that is an approach that is workable in a couple of my markets.

 

[Wyoming]

I like Jim's ideas of using allocation. Additionally, I would review the concepts of "excess land" and "surplus land." You could also consider the extraction method using homes that sit on two lots in such a way that creates surplus land. However, those homes usually straddle the two lots which isn't exactly what you are looking at. Good luck.

 

[Couch Potato]

What is the purpose of the appraisal?

 

[Mike Boyd]

If I were the lot owner, I would go to the property owner that benefits from the deed restriction and tell them I was going to build a 5 story monstrosity, paint it red, purple and yellow and rent it out to perverts......unless they agreed to quit claim or release the deed restriction. I might even agree to pay them a nominal amount. With release in hand, THEN I would have you complete the appraisal.

Question: only build on half? Half of what? The lot or building envelope?

 

[timd354]

Hi,
I'm in CA and Im doing a land appraisal in the Berkeley hills which is zoned for SFR. I'll try to explain this as clearly as I can.
The subject lot was at one time owned by the 2 neighbors on either side. (Tenancy in common interest) Back in the 70's the owner of the right half purchased the left half from the other owner and now owns the entire parcel. But there is a restrictive covenant which does not allow the current owner to built a structure on the left half the lot. It can only be built on the right side. On the left they can only put retaining walls, landscaping, etc. The lot is roughly 119'x47' (L x W).
Plans for a house already exist which adhere to the restrictions but there are no immediate plans to build. So the lot can still be used for SFR purposes. My question is how measure the effect on value and how to support any adjustment that needs to be made. I don't know how to find a comp with similar restrictions.
Any advice on how to handle this would be greatly appreciated.
Thanks in advance.

PS. The covenant stays in effect with future owners.

This is clearly a complex assignment.....a licensed apprasier should not be doing this appraisal.