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Lot size & Location adjustment?

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CANative

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Jun 18, 2003
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Retired Appraiser
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California
I might figure this out before you guys do but I thought I'd ask.

I'm appraising such a unique property that I have to use a comp about 60 miles away in another county. The comp county is inferior (lower pricing) to the subject's county. But the comp has 15 acres versus the subject's 1 acre. All else is remarkably similar (3 section MH, panoramic lakeviews).

So I'll make an upward location adjustment. I then need to address the difference in lot size. If I use a "per acre" adjustment should the amount of the adjustment be based on land value in the comp county or land value n the subject county?
 

Colorado Guy

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Feb 9, 2003
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Certified Residential Appraiser
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Colorado
Hey Greg

I appraisal rural properties in eastern Colorado on a very regular basis - so I do not know anything about your particular area. But comparing a 1 ac lot to a 15 ac lot does not seem reasonable to me. I would look back in time or go farther out (yes - I have had comp 78 miles from the subject in a county with 28 rural sales in the past 6 years).

Anyways - just my 2 cents
 

Mztk1

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Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
My gut tells me the lot size adjustment would be based on your subject market, and the location adjustment would be based on the difference between the two markets. Otherwise, you'd be double-dipping. I'd probably only use that as a supporting comp, even if very similar otherwise, at least in my market. Because counties change tax structure, schools, and the whole bit, and no matter how good they seem, you'll merely be playing with numbers. After all, are you able to measure the diminishing return on added acres? What about zoning, units per acre, and septic requirements, etc. Just too much to consider.
 

stefan olafson

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Apr 2, 2003
Professional Status
Certified General Appraiser
State
North Dakota
Greg,

Always adjust the comparables to the subject. The adjustment process is done to assimilate the comparable sales to the subject. To make them similar in other words.

Isn't 15 acres vs 1 acre a stretch though? Maybe on the comp use one acre for site so they are similar and put the 14 acres as excess land or surplus land and adjust for that later on in the process? Unless the comp has to have the 15 acres to be viable?/????
 

CANative

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Jun 18, 2003
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Retired Appraiser
State
California
No sales ever in my county of a manufactured with an almost literal "million dollar" view. I'm using similar MH's in the area on 1 or 2 acre lots but no views. I'm making a 40% upward adjustment for the view. I'm using the sales of 2 properties less than a quarter mile from the subject with the same view and lot size to support the view adjustment but these are site built homes of extraordinary quality and large size. I'm supporting the amount of the view adjustment as a percentage buy showing sales of similar quality homes with no view.

I don't have a comp like the subject though. I did appraise the MH with a view in another county though and it is very similar. It will nail down the analysis very well. The sales price is about the same as what I'm coming up with using the methods described above.
 

John Hassler

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Jul 23, 2002
Professional Status
Certified Residential Appraiser
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California
Overlooking the fact that this may be an apple to oranges comparison, my plan of attack would be to first establish the lot value of the subject and the lot value of the comparable(s). On the URAR, make your lot size adjustment as you see fit for the subject area. Now you can back into the adjustment for location keeping in mind the overall difference in value between the sites plus/minus the lot size adjustment.

Or, you could make an overall lot adjustment which takes into consideration both size and location, and just uses the overall value difference based on your site value estimates for the subject and comparables. I like using this approach for narrative reports when there aren't enough oranges and you use a few tangerines.
 

Mztk1

Senior Member
Joined
Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
No sales ever in my county of a manufactured with an almost literal "million dollar" view. I'm using similar MH's in the area on 1 or 2 acre lots but no views. I'm making a 40% upward adjustment for the view. I'm using the sales of 2 properties less than a quarter mile from the subject with the same view and lot size to support the view adjustment but these are site built homes of extraordinary quality and large size. I'm supporting the amount of the view adjustment as a percentage buy showing sales of similar quality homes with no view.

I don't have a comp like the subject though. I did appraise the MH with a view in another county though and it is very similar. It will nail down the analysis very well. The sales price is about the same as what I'm coming up with using the methods described above.

Well, when that is all you got, that is all you got. And I think we all know how long you've been struggling with this one. Sometimes, no matter how much you do, the report is still going to be ugly. This is one of those times.
 

redfish

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Sep 2, 2007
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Certified Residential Appraiser
State
Michigan
Is the manufactured home, compared to other homes with similar views, compatitable or is it in adequate. The market may consider only properties with similar views as reasonable substitutes and would consider the subject at the very low end of properties due to quality of construction. Are there any vacant land sales with similar views, possibly that may have had a manufactured home that was removed? The highest and best use analysis for manufactured homes with a land to value ratio as high as I am assuming your subject property will have, can include the possible value of the manufactured home as personal property. Just thinking out of the box.
 

redfish

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Joined
Sep 2, 2007
Professional Status
Certified Residential Appraiser
State
Michigan
Is the manufactured home, compared to other homes with similar views, compatitable or is it in adequate. The market may consider only properties with similar views as reasonable substitutes and would consider the subject at the very low end of properties due to quality of construction. Are there any vacant land sales with similar views, possibly that may have had a manufactured home that was removed? The highest and best use analysis for manufactured homes with a land to value ratio as high as I am assuming your subject property will have, can include the possible value of the manufactured home as personal property. Just thinking out of the box.
 

CANative

Thread Starter
Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
Your out of box thinking is pretty good.

No lot sales with this view in many, many years. The last sale of a lot like this was the subject lot and that was in 1986 and they bought it from their parents.

For the high ends houses the contribution of the view was about $500,000 or 37% of the sales price. If you adjust MH sales in the area without the view at 37-40% the dollar amount is only half of that of the high end houses. The difference is more than the replacement cost new of the subject's residence.

:Eyecrazy:
 
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