No legal access

[Caterina Platt]

A gentleman called last week wanting his 5 acre tract with no legal access valued. Told him I'd research the problem and get back with him. The parcel is a pretty desireable location and has surface irrigation rights making it normally about $125k parcel. The owner of the neighboring parcel (with access) is interested in working a deal with him.

No sales exist with the similar situation as this problem is either worked out prior to marketing, or the parcel never sells due to the fact that you can't get title insurance, financing, etc.

How in the world would you extract, estimate or support any sort of adjustment for the lack of legal access?

 

[Dee Dee]

Assuming that the deal that the property owner and his neighbor are working on is for the owner to purchase easement....is it possible that they can seal their deal and then get the property appraised?
Or does the neighbor want to buy the owner's land outright?

 

[airphoto]

Dee D.,

I like it: "Seal their Deal!" She's a poet, and didn't know it!
(But her feet show it .. :lol: )

 

[Tom Hildebrandt]

Caterina

In my market, you can occassionaly find landlocked sales, and occasionaly you can find sales with only cartways. Takes some digging, but they are there. Discounts run 50 - 75%. The lower discount would be for the adjoining property owner who can assemble the property and provide access. The other is the "pure price for landlocked parcels."

Regards

Tom Hildebrandt GAA

 

[Neil (Texas)]

If the parcel is truly land-locked, it may be that it only has value to an adjoining property owner. However, many states now have laws which enable owners of such parcels to acquire access.
Before getting in too deep, I would require a legal opinion as to whether or not the property was actually land-locked and if so, could access be obtained. If an agreement exists between the parcel owner and an adjoining owner (verbal or otherwise), I would require something in writing outlining the particulars of such agreement.

 

[Caterina Platt]

Thanks all!

The adjacent property owner is interested in buying the parcel. I would agree with your percentages Tom. The only parcel I've run across was marketed, but never sold. It was offered at approximately 50% of the price per acre of similar sites with access. Now if I could only prove it....

Neil, your comment regarding only having value to those who own adjacent parcels is interesting. Makes sense, how else would you get there? Helicopter :?: Hmmm. I always say I love a challenge. Sometimes I'm really a masochist.

 

[xmrdfghap]

Caterina, I have encountered the same situation twice. Once near Penasco, and once on Browns Arroyo south of Soccorro. On the first one, the neighbor who wanted to buy the propery offered a really low price, refused access to the owner, and, when they got to court, the owner was granted access for cows only (prescriptive easement due to historical grazing of the land), thus establishing an income based value..........but, as you well know, New Mexico does not require a neighbor to provide access, and such can only be negotiated by a willing neighbor. Consequently the sale price is established by the buyer when the buyer is the neighbor. There cannot be a fair market value determined simply because the owner is not acting absent outside pressure. Unless access is given or bought the land has no value to anyone except a neighbor who does have access. It is tragic that New Mexico is like that, but once the neighbor takes possession, the value will jump to $10,000 per acre.......until then, you pay taxes on land you cannot get to.

In fact, that might be a basis for valuing the land. If it is taken for lack of payment of taxes, and the county sells the land to a neighbor for taxes, then that would establish the only scenario where you have a willing buyer and a willing seller and a meeting of minds.........

 

[jtrotta]

Caterina;
In our area there is no longer possible "landlocked parcels" - by state law, every owned parcel will be granted access. (Neil )

In the last great down turn of values it was noted by one of the aquiring banks that a Lender had provided funding on a "landlocked" parcel - obviously no one pointed out that fact and the Lender was into it for approximately 2.5 million 8O Inquiring minds wanted to know :? how that happened :?: Need I go any further 8)

 

[Terry Russell]

Just a thought, but what is the shape of the parcel? It would be quite unusual if the neighbor owned all the parcels surrounding the parcel in question, but if he did, did he acquire them in a single sale? Not likely. so my reasoning would be that there is access. albeit not the most desirable. But over the years it had to be accessed for survey, fencing whatever. 2 cents. terry

 

[Tom Hildebrandt]

Caterina

Just a quick follow up note.

You state that "if I could only prove it".

Proof is not required, if we could prove our opinions they would be fact, and no opinions would be needed.

All USPAP and our profession requires is that the process be correct for solving the problem and that data, the analysis and the conclusions be accurate and credible. In USPAP terms, this means that the conclusions must be worthy of belief.

Lack of data makes even simple appraisal problems complex, and places a greater weight on judgement in the development of the appraisal.

Regards

Tom Hildebrandt GAA