Land locked appraisal

[Alan Magill]

There is a parcel of land that was left out of the surrounding developments and is not economically viable to gain access through right of way or easement as it would disturb the residence to a degree that would make the land useless. I have been asked to appraise the property between two homes and it is a small tract and would not be large enough for a septic system and for zoning reasons. The neighbor wants to buy it at a fair price.

I have decided to use land sales in the area to determine the value of the surplus land by making adjustments to sales excluding the surplus land, thus giving the value of the surplus land.

There are no land locked sales in the area for comparison as Texas is a non disclosure state and as most all land locked sales go, they are sold from one owner to another. The land value (not land locked is around $100k/acre in the immediate area) is coming in at around 1/4 to 1/5 of that value. I have contacted a land broker (Close Friend) to get his opinion. Is there anything that you would be doing that I have not thought of that might lead to a more credible result.

Thanks in advance.

 

[CANative]

What definition of value are you going to use considering there is no actual market for this land?

What is House A with smaller lot worth as opposed to the proposed larger lot? What is House B with the larger lot worth as opposed to House B with the proposed smaller lot?

The easiest value is a split between the sellers loss and the buyers gain.

 

[stefan olafson]

It sounds like the only use available is as an add on parcel to one or the other neighbor. Canative has the theory correct, take a look at sales of homes in the area with differing lot sizes and use those sales to come up with a value. Definition of Market Value is only to those two neighbors, may have to write your own....

Hope this is not for financing.

 

[Alan Magill]

It sounds like the only use available is as an add on parcel to one or the other neighbor. Canative has the theory correct, take a look at sales of homes in the area with differing lot sizes and use those sales to come up with a value. Definition of Market Value is only to those two neighbors, may have to write your own....

Hope this is not for financing.

Not for financing. Just two neighbors want to make a fair deal. In theory the surplus land for a lot sale is the same as the surplus value land for a home or at least it appears to be given the sales I have looked at. I appreciate the responses.

Anything else I should take into consideration that I might not be thinking of?

 

[Lee Lansford]

Not for financing. Just two neighbors want to make a fair deal. In theory the surplus land for a lot sale is the same as the surplus value land for a home or at least it appears to be given the sales I have looked at. I appreciate the responses.

Anything else I should take into consideration that I might not be thinking of?

Again, to what definition of "value" are you opining?

 

[Alan Magill]

I have not written the definition of value as of yet. It is not market because there is no market as stated. It will be something to the effect of the value that can be attributed to the addition of the parcel given sales in the area as comparable to sales with different lot sizes.

 

[Pittsburgh Pete]

There is a market, just a very small one. The most likely purchaser is obviously an adjoiner under no compulsion to buy.

Have used matched pairs in the past on such situations in condemnation work. We have found that 20-25% of the fee value is supportable. But that's here and not where you are.

Good luck.

 

[Michael S]

There'a particular definition for this type of property but I can't think of it. It starts with "bi". Basically where the only market is the two adjoining owners.

 

[Michigan CG]

There is a market, just a very small one. The most likely purchaser is obviously an adjoiner under no compulsion to buy.

Have used matched pairs in the past on such situations in condemnation work. We have found that 20-25% of the fee value is supportable. But that's here and not where you are.

Good luck.

Pete is correct, there is a market.

It is also my experience that the unbuildable is 20-25% of the buildable.

 

[CANative]

Pete is correct, there is a market.

It is also my experience that the unbuildable is 20-25% of the buildable.

If you want to call a market of one a market go ahead.

Bi-lateral monopoly.