Parcels located next to a quarry

[AJL118]

Tim - I keep thinking about all of those gorgeous fishing lakes up there and factor $150 an hour to wet a line. Worth more to me than what you are trying to go thru.

 

[Ray Miller]

Tim,

Remember in Wisconsin a Licensed Appraiser can do commercial, Certified Residental can not. That is why many certified residental appraiser keep their licensed appraisal status. If it gets too deep you can have your CG mentor with you on it or co-broker the assigment with one.

I would think you would have to consider the rock hole an external obsolecense. Noise, big truck road traffic, dust, water table, etc.

I would want to figure out what the HBU is first. That would include DNR data, ASCS data, Zoning Data, DOT data etc.

 

[Terrel L. Shields]

A- without a basis (PE is correct about the Geological study) then the presence of minable material is not a proven fact. That means it is speculative and that means to argue for a Hypothetical...contrary to what is actually there.

B- therefore the comparable(s) you seek are going to be equally speculative and based upon sales of similarly situated properties. The property "Market Value" will depend upon the Market Value of similar undeveloped sites... speculating on a possible future value based upon an engineering study is probabilistic appraising...something a mining company might speculate upon and apply an appropriate risk factor. They will also do an Expected Monetary Value estimate, perhaps comparing the total cost vs anticipated reserves to see if this as opposed to perhaps a couple other sites they are considering are "worth it"....

Once a mine is in production and the volume of material is estimated more accurately then a discounted cash flow would yield the "market value" vetting volume x price against the rate of material sales and the expense of mining and transporting.

A quarry in an area with mines already exist may suggest that a mine that is nearer on going construction or in a place that reduces hauling times is more profitable than building or expanding an existing mine.

The sales approach is the way to go. You have to compare undeveloped land vs undeveloped land. And proximity is more important than time - you can adjust for time easier than you can adjust for location, especially if you don't have geological knowledge to find other vacant properties.

Generally, a mine can hurt market values of adjacent residential properties, but is unlikely to have a measurable impact upon land used solely for agriculture. The best way is to find a quarry in a location where you can compare the properties within ½ mile vs properties outside that ½ mile circle and see if those closer to the mines averaged lower prices per SF.

 

[Lloyd Bonafide]

If it's easy to change the zoning to mining in this area, then you might have something to think about. But maybe there is gravel or granite all over the county - in that case maybe there is no added value to being adjacent to an existing mining operation.

Otherwise all you have is a property next to a quarry, and that would probably mean external obsolescence due to trucks, noise, dust, and probably blasting if they are extracting granite. Not a choice place to live.

 

[Mr Rex]

My only experience with ag land next to a quarry revealed a fat value as the quarrie wanted the land ASAP. My simplistic appraisal was reviewed by a Harvard MBA, and he approved my DCF analysis. (It was his family's land)

 

[Tim Schneider]

Thank you to those who offered their help. Webbed, you have offered your help to me in the past, and I think you are a great asset to this board. That being said, I also think you are way to quick to judge the intentions of those who come here for help. Did I say I was going to do a commercial appraisal??? No, I did not. I was asking for input on if this assignment should be considered a complex or commercial assignment, so that I did not overstep my boundries. I know the state board reads this, I have nothing to hide. That's why I don't use a fake name on here. I am simply doing the research needed to do a good job. I think most would appreciate that. I know for a fact that many appraisers in this area would have just gone to the house, called it a countyside view, and handed in the report.

 

[Restrain]

We actually did this same thing. Adjacent to a gravel pit operation. Now, there were significant numbers of commercial pit operations and USGS soils studies to show that the minerals were the same across the properties. The interesting thing was that the "market value" for land was less than half of what the mining company was offering, and I was given the offers for review. My SOW was what was it worth only as land, not considering the operation. So we had dirt, discounted for the operation. Conversely, if it was sold to the mining operation, big increase in value as the mining operation was beginning to mine out the land it had currently owned.

As to sales, if you can find sales of land adjacent, then great. I would talk to the operators of the mining operations in the area and see if you can pry any info out, maybe enough to put together the necessary data.

USGS, Federal soil bank information, all can give you data as to whether the minerals will extend under the subject site. If they don't, then you're looking at a locational obsolescence with no premium to market to the mining company.

Don't let the gripers bug you. If you don't ask, you'll never learn. You'll always have someone get out the "license" level and the "competency" mantra. That's what you're trying to determine, if you license will allow you to do this, given the complexity of the appraisal. As to competency, you are taking steps to cure the competency issue.

Good luck.

 

[Terrel L. Shields]

land was less than half of what the mining company was offering

That is a reflection of their expertise in the geology of the prospect. They have a pretty good idea what is there, maybe from drilling that occurred decades ago. I was working on a resource project and a 80 some year old man told me that Peabody coal had dug test holes years ago...right after WWII. He remembered that they encountered 3' of coal at 30' drilling in his field. So we went about where he recalled the rig sat and by gum, there was 30 some inches of coal at 30'...It's high grade antracite coal and excellent for blacksmithing.

Same thing with oil companies. Land might sell for $2000 an acre between speculative buyers or local landowners...then the gas company comes along and offers $7000 a mineral acre. It is because their scientists have made an educated guess as to the quality and quantity of gas there using information that is proprietory and will never be made available to an appraiser.

 

[DMZwerg]

Tim,

Remember in Wisconsin a Licensed Appraiser can do commercial, Certified Residental can not.

Huh?

Never heard of that ... can you cite source?


I ask because according to the WI DRL:
http://drl.wi.gov/prof/appr/pfaq.htm

A. Certified residential appraisers may conduct appraisals of residential real estate without regard to transaction value and of commercial real estate having a transaction value of not more than $250,000.

 

[Ray Miller]

Huh?

Never heard of that ... can you cite source?


I ask because according to the WI DRL:
http://drl.wi.gov/prof/appr/pfaq.htm

Sorry about that, I was going on memory from my Certified Appraiser Class back in 04 of what one of the guys teaching the class told us CR could not do Commercial. That is why I followed up with the classes and education for my CG license if I wanted to get it.