Lot size adjustments

[robertwells]

Just curious if anyone would care to chime in...what is the highest sq.ft.lot adjustment rate you found warranted in the market... I am working on a refi appraisal with a level 11,000 square foot premium lot in the 1.6 to 1.9 million price range and the house is just over 1600 sq.ft. The subject I am appraising clarified the top of the market for this size home in the entire city not too long ago...Thanks!

 

[Terrel L. Shields]

I adjust land $ for $ based upon its value. So, I would be looking for sales of tiny lots vs big lots and otherwise, I'd do a linear regression of lot size vs $/SF and extrapolate accordingly to determine the lot value. Small lots that are difficult to develop might be discounted over the ideal size lot, and then lots larger than ideal will bring more but less per unit SF.

 

[Joe Flacco]

It depends. In some subdivisions, it is dollar for dollar on the price per SF of land. In other subdivisions, it's a small difference.

 

[sputnam]

Since land value is influenced by more than just size, I base my adjustments on the relative value of the sale to the subject. That is going to include value that is attributable to size, shape, frontage, access, etc. I use allocation or extraction to determine the value of the sites.

 

[alebrewer]

Sounds like a potential H&B issue to me.

 

[J Grant]

Just curious if anyone would care to chime in...what is the highest sq.ft.lot adjustment rate you found warranted in the market... I am working on a refi appraisal with a level 11,000 square foot premium lot in the 1.6 to 1.9 million price range and the house is just over 1600 sq.ft. The subject I am appraising clarified the top of the market for this size home in the entire city not too long ago...Thanks!

What does "clarified the top of the market" for the entire city mean? Did it sell for the highest price, or was it appraised for the highest value?

I don't think anyone can answer this over the internet. A 1600 sf house is a small improvement for an 11,000 sf lot. Can the lot be subdivided? Is there a view? Is the subject worth more torn down and the value mainly in the land? (HBU) Any vacant lot sales or sales of older, smaller homes sold for lot value and then demolished can help.

 

[Jerry Bone Jr]

Just curious if anyone would care to chime in...what is the highest sq.ft.lot adjustment rate you found warranted in the market... I am working on a refi appraisal with a level 11,000 square foot premium lot in the 1.6 to 1.9 million price range and the house is just over 1600 sq.ft. The subject I am appraising clarified the top of the market for this size home in the entire city not too long ago...Thanks!

Take your provided comparable sales; use the ASP after all other adjustments are made; run a regression analysis - site size vs ASP.

 

[gregb]

Here are the unassailable rules...

 

[robertwells]

Thanks everyone...

 

[Tom4value]

Lot size adjustments are strictly with matched pairs in my book. There are too many variables; topography, shape, vegetation and surroundings to derive a square foot adjustment. For single family homes, functional utility has more value than lot size. There are many times I adjust DOWN for a LARGER lot. Lemme explain before you go nuts.

Example: subject is a 20,000 sqft lot. It is level, open and landscaped. Comp 1 is very similar in layout and size. Comp 2 has an acre and actually adjusts LESS than comp 1. When I take my comp photo, I have a hard time getting a shot of the house because it is below grade and hidden by trees and topography. MLS photos show no backyard, slopes down just beyond house. If I were to apply a negative sqft adjustment, the adjusted sales price would be way out of whack with comp 1. I have proof that the lot characteristics negatively affected the sales price so I make a POSITIVE adjustment even though the lot size is larger than the subject. Of course, explain so the underwriter doesn’t accuse me of mistakingly adjusting positive when I meant to go negative.