Need help appraising home with 10 acres

[Tim Hicks (Texas)]

House with 5 acres, 10 acres, 20 acres, 30 acres, etc are regularly sold in rural Texas areas. The HBU is gonna be a house on ten acres if located in a rural area. There is no zoning. There may be deed restrictions. Can the property be subdivided? Maybe, but the appeal of the property is the house on ten acres where you don't have neighbors looking through your windows on all sides. You can have dogs, horses and cows without being an agricultural business or property. It is just common in the wide open areas in rural Texas. Everybody and their cousins want to live out in rural areas because they think it will improve their life. Sometimes it does, sometimes it doesn't. When you have neighbors shooting stray dogs, fireworks going off all around you, you have to deal with coyotes, skunks and racoons, some people realize the country life is not for them. You can never control who your neighbors are unless you just buy all the land as far as you can see.

To the OP. Hopefully you have sales of similar size homes on similar acreage. If not, try to use similar size/age homes on 5-15 acres and you can figure the land adjustments by the market reaction of the different properties based on lot size. You really should be riding along with your mentor on these type assignments or else you may be making multiple trips for comparable sales or even worse to go back to the property to collect what you did not know you needed. For instance, private well or community water? What type of septic? Do they have natural gas or a buried propane tank. Did you see the storm shelter? What type of fencing did they have? Did they have an electric gate? Are there any encroachments or easements? Gas wells nearby? Train tracks? Flood zone? Stock ponds? Workshops or buildings hidden in the trees? A single wide on the back of the property? Mineral rights? Probably several other things that I am forgetting to mention too.

 

[sputnam]

Yep... what's the assignment. To appraise the 10 acres? Or to appraise the 1 acre? What is the typical lot size for residences in the market? If it's 1 acre then, the other 9 is surplus or excess land and you deal with that accordingly.

 

[Vermonter]

I doubt the 10 acre is 'excess'. Just because the assessor artificially carves out one acre (regardless if the lawn is 15,000 SF or all 10 acres) is meaningless.

Agree. Assessors do the same here. Anything over 2 acres has a 2 acre "housesite" and the rest is considered "additional" on the tax card. Could be 2.01 acres and the 0.01 will still be listed separately.

Doesn't matter if zoning has a 10, 20 or even 40 acre minimum they will still break 2.00 acres out at a different assessment from the rest.

 

[Mark K]

When the subject and comps are listed and sold by the acre, there is NO reason to convert to price/sq.ft. for adjustments.

Obviously, finding comps with similar size sites is ideal, even if you have to go back in time for analysis. If none available, find land sales to determine an adjustment factor for the surplus land. I generally use larger, vacant tracts for the per/acre value for the surplus land, not larger homesites. If the extra 9 ac. is surplus (not excess) and not a homesite, the value of the surplus 9 ac. is likely not the same unit value as a 9 ac. homesite. I'd use the unit value of 40+ ac. tracts to determine the surplus land value.

That's one of the few things our Assessor gets right. They value the first 1 ac. of a 20 acre tract, for example, at homesite value of say $60,000. The balance of the land is assessed a lower rate, say $10K/ac. which is the value of decent ag land.