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"lots" of fun

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Alan Simmons

Thread Starter
Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
I have an assignment on lots1 & 2, OLD City Plat Subdivision. Only together can these lots be used for a SFR (defiantly the H&BU).

I have found two sales in this OLD subdivision that similarly involved two abutting lots and one such sale in the next OLD subdivision. These sales were all within the past year for $45,000.

However I have been asked to consider each lot separately. There is nothing preventing each lot form being sold separately; they just can not be used for a SFR unless together.

I have been able to find four recent sales in the subdivision that included an “extra” (too small for SFR) buffer lot. As can be imagined today these “extra” lots do not seem to have any noticeable contributory value. The sales with an “extra” lot are very much in line with those that do not have such. There have not been any sales of such single lots in the area and according to the tax records there are not any orphan (not owned in conjunction with at least one other) lots in the area. Also the sales with the “extra” lots do not abut other vacant “extra” lot.

The advantage the individual subject lots have over the ‘extra” lots is that they do have the opportunity to be eventually used (only in conjunction with the other though) as a SFR site. Anyone know how much value a “POSSIBLE” future opportunity (discounted of course) should be given?

The lots are part of an estate and it is VERY possible that they may soon be split between antagonistic family members. The value for them is to keep the other from fully enjoying the lots.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
The value for them is to keep the other from fully enjoying the lots.

Careful, don't let them drag you into the middle of a mud fight. No matter what you say, both will not be happy.
 

Travis McGee

Senior Member
Joined
Sep 18, 2004
:D What is the highest and bst use of the individual lots? UAPA requires value estimate at H&BU. USPAP also prohibits estimate of value based on unknown future event.
 

Steve Owen

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Missouri
I would consider the H&B use of the individual lot. If SFR is not permitted, then there may not be any legal use of the individual lot. As you pointed out, you might then value the lot based on what it would be worth as an add-on to a neighboring lot. Don't forget to consider the possibility of rezoning - talk to the local authority.

Before I would accept the assignment to value each lot individually (if the above scenario is true) I would require that the assignment also included valuing the lots together at H&B. When the warring relatives see what they are about to lose, they will probably come to terms, but that's really not your concern. Be sure to get paid up front and use a strong legal disclaimer.

One more thought. Are you certain they are asking you to value them separately and not asking you to value the whole property for one-half interest? There is definitely a difference.
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Alan,

I'm just being curious as I don't know anything about Alabama, but if it's in the Old Plat, how can the municipality destroy an existing subdivided lot/site? In NJ, even if the current zoning required the equivalent size of the two lots to build a new home on, they would still allow a new home to be built on an existing, non-conforming site provided the new dwelling met the current front, rear and sideyard set backs. So you would still have two building sites.

Is that possible in your scenario?

Ben
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
You might look at the property as excess land for the adjoining property owners. What would the adjoining homeowner pay for the additional lot? Just a suggesstion.

Roger
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
If the assignment is to value each lot separately and separately they cannot be used as building lots then the only real use that I can see is to be added to existing contiguous lots for added buffer and privacy (if privacy is possible in a city). If you have sales of single lots that were bought simply to be added to existing improved lots, you have comps that will supply the answer. If not, then you need to find sales of houses with an extra lot and do an extraction of the land from the sales price to arrive at a value.

H&B use of a single lot is easy if they are not big enough to build upon. It is to act as a buffer and privacy for an existing combine contiguous lot. A market may or may not exist because only one contiguous lot for each will be able to benefit from this single lot and thus you have a limited market.

Since the individual lots cannot be built upon, you have a case where the sum of the value of the individual parts most likely will not equal the value of the combined lots since the Highest and Best Use changes in the wedding of the two lots.
 
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