Land locked parcel and the abutting landowner

[Vermonter]

So went into my local stihl dealer for saw chain and get to talking with the owner. Mention I'm an appraiser and of course he starts with the questions.

He's got a large timber parcel and his neighbor is selling off an adjoining large parcel that is landlocked (abuts his parcel). He and the neighbor agree to each get independent appraisals and negotiate a price.

His appraisals OMV is in the $500 per acre range which is typical for landlocked parcels.

The owner of the parcels appraisal OMV was $1200 per acre and he used all road accessible comps around the area. The appraiser stated that because the potential buyers land abuts the property it would not be considered landlocked for him. Something along the lines of- "Market value for the adjoining landowner is considerably higher than market value for the general public." He was sure the term "market value" was used.

I told him that yes, technically the land was more valuable to him as opposed to some joe blow that had to figure out how to access it, but that isn't "market value".

Both appraisers were CGs with abundant experience and stellar reputations. So just wondering am I crazy or is this some appraisal theory I never heard of.

 

[Lee Lansford]

You understand quite well.

It appears that one of the appraisers "bent" the definition of MV to to fit the mold of a value for a particular user.

 

[Mountain Man]

The higher appraiser is confusing Market Value with Value in Use. If it's land locked and your only market is the surrounding property owners, you can't an open market nor Market Value. It's damaged goods, buyers never pay full value for damaged goods. There will be significant cost in law suites to force easements if anyone but an adjoining owner buys it.

 

[Terrel L. Shields]

Ask him what it is worth if the adjacent owner doesn't buy it....1 is a very limited market...

 

[Mark K]

I'm curious....

Is the parcel currently landlocked or is it a portion of the neighbors parcel that will be lacking road access, i.e., no frontage, if it is sold off separately from the parent parcel?

If it is, for example, the back 40 of an 80 acre tract, many if not most states will require access via easement, etc., to the public r/w if it is sold separately. They won't allow you to split a parcel and landlock it.

If it is already a freestanding, truly landlocked parcel then the value will be negatively affected but the number of adjacent landowners, (potential purchasers) will be the primary factor in determining the amount of discount to MV. If it has a nice stand of timber there may be no discount if more than one neighbor has interest in it.

 

[Walter Kirk]

If the parcel is landlocked how does the current owner get access to it? If he has an easement does it transfer with title to the parcel. Does he own an adjoining parcel? Was the landlocked parcel split off from an adjoining parcel which has road access?

 

[Vermonter]

I don't know all the specifics, just what he told me. Landlocked parcels are not uncommon around here. Usually the land has been handed down for generations and there is some sort of access, it's just not legally recorded in the deed.

Interestingly enough....if you own a landlocked parcel in the state of VT, you can appeal to the fire warden for an easement on one of your neighbors properties for the sole purpose of removing timber. The fire warden decides which neighbor gets the easement.

 

[Joyce Potts]

Research your state laws as to landlocked properties.

 

[David Mescon]

If there's a prescriptive easement there may be no difference in value between a landlocked parcel and a frontage parcel. Might be worth checking into.

 

[Pat Butler]

Same sort of comment here. There's bound to be some sort of laws in your state to deal with landlocked properties. If so, then there might not be much, or any, value diminution with a landlocked property.