Land Only Appraisal

[GWC]

You need to make an assumption that is obvious in the report that the site is environmentally clean. Write it in the letter of the appraisal as well so the client has full knowledge of this assumption. Has an appraiser ever been held liable when it was explicitly noted in the report that the site was assumed clean and that the appraiser is not an expert in this area?

Good points everyone about the assumptions. I will definitely have a write-up that will cover myself for that.

And thank you Nacho, I agree that including demo costs will just confuse the reader since that segment of the property isn't being valued.

 

[DWiley]

Just use a hypothetical condition that the land is vacant and available for development to the highest and best use. I would include a reasonable cost of demolition to clear the site of the current improvements to provide the as is value. After all, why would somebody pay the same for this site as a vacant one which would not incur demolition costs to get it ready for development.

Check the FAQ section of the USPAP publication and you will find that a hypothetical condition is not required when the assignment involves only the underlying land.

 

[The Warrior Monk]

One important point needs to be clarified is if the land is being valued with consideration of its current use, or without consideration of the current use. These values might not be the same.