Land Value/Allocation Ratio by using Assessor's data.

[airadj]

Hello Everyone,

Again newbie here... I was wondering it would be prudent to use assesors data to establish a land to improvement ratio AND using assessor land value (multiply by 3) to get land value. As appraisers, are we not required to use available public data.

I would like to know if this would an acceptable practices and if not, why?

Thanks
AI

 

[CANative]

Assessor's data is just one piece of the puzzle. A step in the process of using allocation.

 

[Fritz in NY]

Why do you multipy X 3?

 

[Terrel L. Shields]

Why do you multipy X 3?

I am assuming that is your assessment ratio. Ours is 20% (x5) but the total values are on the field card and the field card is somewhat more detailed in my area than are the computer generated (vendor) cards.

Yes, that is one method. Another is to search for land sales. The fact that lot may have sold miles away and not in your subdivision only means you need to investigate more. Perhaps plot land values on a lot basis. You can also use sensitivity analysis to see if land sells by the front foot or SQ FT...etc. There are several ways to value RE and accurate or less accurate, they beat guessing.

There is always more than one way to skin a cat without getting hair in your teeth.

Why not log onto Amazon.com and check for used Appraisal books, basic ones like "The Appraisal of Real Estate" - I recommend either ed 10 or 12. You can often pick them up for cheap and they have a chapter of the ways you can value land, and a very good discussion of most every accepted technique of appraisal going...worth the cost... for a really really budget constrained appraiser try "Mastering Real Estate Appraisal by Dennis Carr. Used copy on Amazon in the $10 range.

 

[PropertyEconomics]

Using assessor data in my market would lead you to a very wrong conclusion. The values are often off by 200% or more ... and not knowing that could result in a misleading appraisal report.

 

[Terrel L. Shields]

The values are often off by 200% or more

that is not as important as determining if the ratios are reasonable. If they are, fine... use the ratio not the assessor value.

However, in my area, there is a problem. Land values were often valued in one year and buildings in another...creating an imbalance, and in the process the assessor used a "neighborhood factor" to make the numbers "work"... idiotic, but it was the way they did it.

 

[PropertyEconomics]

Terrel ... if they miss the value of the site I am darn sure not going to even consider their ratios ....

 

[Terrel L. Shields]

Sometimes it is not the case of "missing" the value. It is the case of having a value that is 10 yr old and a house value that is 10 years old and adjusting upwards with something like a "neighborhood factor"...but the ratio likely remains about the same.

In my market we have plenty of land sales and you did see when lots that sold for $10,000 and the houses on them for $90,000 that lot prices started to increase dramatically at the same time building prices skyrocketed... Now our builders are building (still) for el cheapo...about $25 per SF less than they were in 07...but lot prices have fell by 50-75% during the same period. Ironically, they are building houses on $10,000 lots that were once listed between $30,000-$42,000 and the building cost is down from $95/SF to $70/SF...or about what they were selling for in 2003-04.

 

[Michigan CG]

Hello Everyone,

Again newbie here... I was wondering it would be prudent to use assesors data to establish a land to improvement ratio AND using assessor land value (multiply by 3) to get land value. As appraisers, are we not required to use available public data.

I would like to know if this would an acceptable practices and if not, why?

Thanks
AI

No, don't, please don't.

Assessing and appraising are related but they are different processes. Mass assessing and property specific appraising are two different birds.

 

[Thomas Fiehler]

I know when I do desk reviews for one client (QC dept.) they have numerous appraisers that site the county auditor as the source for the site value. I always write them up and explain that is not one of the methods used in site valuation and they should review their appraisal library for possible approaches such as: direct sales, allocation, or abstraction.