One parcel, half zoning residential, half zoning commercial

[suntendervaluations]

Never heard of such zoning. A house is on the residential side, a shop is on the commercial side. The buyer is buying the entire parcel. How would you do the appraisal? Thank you

 

[alebrewer]

That can't be...

 

[George Hatch]

Are you talking about the current use of the property or the actual zoning as shown on a zoning map? Mixed use properties are somewhat common in my region. Mixed zoning is more unusual but we see those, too.

If the property is in California I can look it up. Do you have a county and APN?

 

[suntendervaluations]

It's in TN. Do we add an extraordinary assumption the parcel can be divided and appraise separately? Add a hypothetical condition that the shop does not exist (lender's suggestion, which is very questionable)?

 

[George Hatch]

No and no.

PM me the address and I'll see if we can look it up.

 

[Michigan CG]

It's in TN. Do we add an extraordinary assumption the parcel can be divided and appraise separately? Add a hypothetical condition that the shop does not exist (lender's suggestion, which is very questionable)?

Two bad ideas.

 

[Sid Holderly]

Not terribly uncommon. Depends on what the zoning uses can be. Some commercial zonings allow residential use. Is the reason the the commercial zoning now not needed. Example a house with a commercial tin shop next door, but now no longer used for that. What is the surrounding zoning? If all surrounding is residential then it may easily be changed back to residential. The answer lies in the local zoning descriptions, souroundings and possible uses, whether it was grandfathered year s ago? Can it be used for a garage for the house? (part of the highest and best use analysis -as is day of inspection) I would not want to do this one for an AMC. Local banks that hold their own loans would not bark too loudly if you could find one somewhat similar comp.

 

[Terrel L. Shields]

Not terribly uncommon

I did one about a year ago. 6 acre parcel, half zoned Commercial, half zoned residential. The commercial fronted a state highway that crossed through a small town. The ex mayor owned it and it was his bright idea. But as a broker friend told me, "It's either commercial, or its residential". And I concluded it was residential. It has a large well kept house. It has a large front lawn (mostly the commercial part) and the value of the site as is made me conclude that the commercial utility did not make the parcel more valuable than 'as is'. Had they carved a road to the back part of the lot with the blessing of the city (which was not visible due to slope) and platted a small subdivision, yes, that would work. But that is some future use perhaps. As is, it is just what it was when a doctor built it in the 70s...an executive home.

 

[alebrewer]

I'll admit this is not my area of expertise (as if I had one), but it seems to me that the only way a parcel could have two different zonings if if the parcel could be subdivided... If the parcel cannot be subdivided, I don't see how there could be two different zonings?

 

[Mark K]

Never heard of such zoning. A house is on the residential side, a shop is on the commercial side. The buyer is buying the entire parcel. How would you do the appraisal? Thank you

If you're trying to fit this into a F/F loan, I'd forget it.

It happens occasionally around here. Years ago the county painted the zoning with a broad brush along the US highways and zoned the front 300' commercial and left the balance of the parcels as either ag or res. They have rezoned the county a couple of times since then but quite a few parcels kept the old zoning with a small business along the frontage and residential use behind.

I've appraised a few for local banks that keep their loans in-house but I don't see anyway to make it F/F conforming.

Generally one use is predominant and the other is included at contributory value based on an income approach.