Not confident in view adjustment

[Zoe]

That is why talking to buyer and seller and real estate agents would help. Personal interviews are basis for an adjustment.

Buyer said $X. Seller said $X. Real estate agents said $X.

It would be hard to back into it using extraction in cost approach.

So how far does subject sit from waterfront? The view to some buyers could be worth more than a boat dock and waterfront?

If a buyer don't have a boat and don't care about getting on water?

You said it has a beach view. Maybe they like looking at beach. What else is in view?

Like lots that sit real high on Pickwick Lake and Kentucky lake and TN river bring premium. There are small mountains in middle TN and East TN on TN river.

Many of them don't have waterfront or if they do, they park their boat at the marina. There are small yachts on TN river. they park at marina. Marina cleans their boats.

Hello, have my boat ready for Saturday. Okay?

Some of the boats even carry like a small fishing boat in case someone needs to get groceries or wants to go fishing.

They are like a house. You could go to Mississippi River and hit the gulf of Mexico and go where you wanted to on them.

Jet skis, etc. They can go. Get tired,they stop at marina and park it and get them to clean it and go get a hotel or something.

 

[J Grant]

One of the main reasons views command a premium (or penalty if a negative) is that it is fixed -a property either has a view or it does not.

An owner can add a pool or other amenities, expand the living space, and remodel. But with rare exceptions, they can not change the view.

It is easy to see in condos where there is no site size or land value to deal with. The identical condo units in the same building, depending on the view, will command different prices.

 

[J Grant]

AI- The price difference between two identical condo units with different views is called a view premium. This premium typically ranges from 2% to 30% of the unit's base price, and can even exceed 100% in highly sought-after luxury or oceanfront markets. [1, 2, 3]

Key Factors Driving the Price Gap

• Floor Height: In high-rise buildings, developers often charge a set premium per floor. Moving up a few floors can yield massive price differences, especially if it elevates the unit above surrounding buildings. [1, 2, 3]
• Type of View: Direct, unobstructed views of landmarks, water, or skylines demand high premiums. Conversely, "disturbed" views facing alleys, walls, or rail infrastructure can negatively affect a unit's value. [1, 2, 3, 4]
• Unit Layout and Location: Corner or end units inherently sell at a higher price than middle units, and this is sometimes combined with view premiums. [1, 2]
• Permanence: Buyers and appraisers evaluate whether the view is guaranteed or if a future development could block it. [1]

(my comment - the above usually applies for SFR, townhouses and villas as well )

 

[Zoe]

How long was subject on market for sell?

 

[Sadie]

Yep My MLS is the same and I did exactly this, and still none of the adjacent properties or any properties with a similar view have sold within the past 20 years.... I was very surprised to see this. Many were moved into trusts but no arms length sales as far as I could find.

Its basic econ-supply and demand.

 

[Terrel L. Shields]

Your thoughts are just plain wrong on many res appraisal

There is a difference between the "view" from a condo unit facing the ocean and one facing the city. Clear enough but how do you differentiate a house lot on a hill above a lake and the lot on the lakeshore that is 100 yards away? The off shore lot has a superior view, but the lakeside lot likely sells for more, especially if it is "dockable". Further, I can show you some lots and houses with lakeshore that have horrible access - winding paths down the hill where you back and fill to get turned around. Is it "view" here that decides value? Or, the fact one is a lot on a near vertical cliff and the other is gently sloped to the lake, and how would you value the lots by FF or SF? These houses are about 300 yards apart. The one house has a very nice lake view and the other not so much. How do you quantify that?

 

[J Grant]

There is a difference between the "view" from a condo unit facing the ocean and one facing the city. Clear enough but how do you differentiate a house lot on a hill above a lake and the lot on the lakeshore that is 100 yards away? The off shore lot has a superior view, but the lakeside lot likely sells for more, especially if it is "dockable". Further, I can show you some lots and houses with lakeshore that have horrible access - winding paths down the hill where you back and fill to get turned around. Is it "view" here that decides value? Or, the fact one is a lot on a near vertical cliff and the other is gently sloped to the lake, and how would you value the lots by FF or SF? These houses are about 300 yards apart. The one house has a very nice lake view and the other not so much. How do you quantify that?
View attachment 109987View attachment 109988

I deal with this kind of thing, especially on high-value SF near and on the water - we get paid to work our way through these problems, to differentiate when the premium is for the lot, for a dock, for the view, for the waterfrontage, etc.

 

[Terrel L. Shields]

differentiate when the premium is for the lot, for a dock, for the view, for the waterfrontage, etc.

I would argue that the premium varies by individual sale therefore blanket adjustments are inherently weak, if not wrong. And the interactions between various factors are rarely quantifiable. The interaction between lot configuration, location, access, view, and maybe other factors are highly individualistic and rarely easy or accurately quantified.

There are lots of adjustments that are unjustified. One buyer might look at the trees on the lot and like that while another buyer may only see a maintenance problem. That applies to a ton of stuff. A nearby school might appeal to a parent with children but be totally meaningless to an empty nester. At what point do we do 'real' adjustments or simply use "the book"? Do we automatically adjust just because we "always" adjust? Does value vary upon our own biases, or do we really know what market segment is going to buy?

 

[J Grant]

I dont use a book. I do the work on each appraisal and find the comps and run the numbers to find as good a support as I can for an adjustment, as well as interview RE agents and draw on my own experience having appraised properties with those attributes in the past.

Buyers typically pay for the features of a dock, for a view, for waterfront direct access. it is lazy of us to ignore that. Sometimes all of those features are present in one property, sometimes just one, or two. These assignments might require 5 or 6 or 8 comps ...my more straightforward res appraisals might use 4 comps. vacant land sales can factor in as well. We do what we need to do.

 

[Sadie]

I would argue that the premium varies by individual sale therefore blanket adjustments are inherently weak, if not wrong. And the interactions between various factors are rarely quantifiable. The interaction between lot configuration, location, access, view, and maybe other factors are highly individualistic and rarely easy or accurately quantified.

There are lots of adjustments that are unjustified. One buyer might look at the trees on the lot and like that while another buyer may only see a maintenance problem. That applies to a ton of stuff. A nearby school might appeal to a parent with children but be totally meaningless to an empty nester. At what point do we do 'real' adjustments or simply use "the book"? Do we automatically adjust just because we "always" adjust? Does value vary upon our own biases, or do we really know what market segment is going to buy?

You are not appraising to a single buyer, but the market in general. Someone may love burnt orange shag carpet and be willing to pay a premium, but that is not the typical market participant.