Lot size adjustments

[Fernando]

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!

Is it useable? Compare it to other similar useable lot. Even if not useable, lot size determines how much a home can be built on site.

 

[ZZGAMAZZ]

Here are the unassailable rules...

View attachment 104942

Fernando busy photo-shopping his name in place of the existing logo...

 

[Fernando]

Fernando busy photo-shopping his name in place of the existing logo...

It's list for those who don't know how to appraise and need a guidebook to appraise.

 

[ZZGAMAZZ]

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.

Possibly too simple of a question but did you create a formula, e.g. in Excel into which u can copy n paste each SCA comp to determine a $/sf SCA adjustment? The AF often provides what seems to be sage advice with necessary functionality, that I'm too unintelligent to figure it out or just too lazy...although I like to think that activities are efficient I just dont understand how one has enough time to determine it using other than market data protocol. Tha KS

 

[RCA]

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!

I use MARS, which is highly accurate and will usually have adjustments for Lot Size, various room counts, and interactions between GLA and other variables, such as data of sales. But in a very high priced area like Atherton or Hillsbourough, back in 2022 I would get adjustments for GLA alone that were in the neighborhood of $600-$700+/sf. Understand that there were also significant adjustments to bathroom and bedroom counts, as well as to those interactions.

Lot Size for Atherton was running about $60/sf - but I forced linear regression on lot size. Lot Size I tend to restrict to linear regression (with MARS you can force it to only use linear regression on selected variables, for certain reasons).

 

[sputnam]

Possibly too simple of a question but did you create a formula, e.g. in Excel into which u can copy n paste each SCA comp to determine a $/sf SCA adjustment? The AF often provides what seems to be sage advice with necessary functionality, that I'm too unintelligent to figure it out or just too lazy...although I like to think that activities are efficient I just dont understand how one has enough time to determine it using other than market data protocol. Tha KS

Nope.

 

[Joe Flacco]

On the one I delivered yesterday, I looked at these and adjusted -$300k for 1 acre lot vs half acre lot.

 

[Joe Flacco]

This one was a few months back, but this is kind of the same neighborhood, but different location. Here, I looked at these and adjusted $700k for 1 acre lot vs half acre lot.

There was a different one where I had to use a mix of sales from both locations. The location adjustment between these two locations would be about $1.35 million if comparing 1 acre lots between the two locations, and about $1 million if comparing half acre lots between the two locations. If you are comparing a one acre lot in Langley Forest with a half acre lot in the first set, that adjustment would be about $1.7 million. If you are comparing a one acre lot in the first set with a half acre lot in Langley Forest, then the bigger one acre lot would need a positive adjustment of around $400k. So sometimes it makes more sense to make these combo adjustments on a separate line, rather than in the site line.

 

[Joe Flacco]

These are the land sales for another one I just got done in the same neighborhood, but different location. Here has smaller lots in denser zoning. So if for some reason you are having to compare these quarter acre lots zoned R-3, with a half acre lot zoned R-1 in Langley Forest, then that adjustment would be around $1.2 million, almost dollar for dollar on the price per SF of land. But based on just the above, if you are comparing a 16,000 SF lot with a 11,000 SF lot in this subdivision, then the data suggests there is no adjustment necessary at all.

 

[Joe Flacco]

Any big data solution including MARS sucks for this. The main issues with those methods is that changes in different locations in the same neighborhood are not the same. And what the adjustments were two years ago is different from what it is today. It's really complicated.