Partial Release Appraisal

[Xavier Hargrove]

Good Morning everyone,

I am doing an appraisal for a partial release of land. The bank loan encumbers the whole parcel with a manufactured dwelling on it. The borrower wants to split the parcel, and the bank wants to know whether the proposed site size will value at least the current loan amount or higher. So, there are two reports: one with the proposed land size making it subject to the split, and one as is referenced in the additional comments.

My problem is that the survey has a gross acreage of the total parcel at 7.49 acres but a net of 7.11 acres. Albeit not a tremendous adjustment for the as-is but for the proposed split valuation jumping almost 0.2 acres in this market is a big adjustment. I have turned in the report based on gross acres and this was a revision request. The difference between gross and net acres looks like it comes from a R/W based on the survey. The GIS shows 7.49 acres (the gross) owned by the borrower. Just want to know your thoughts on how to address or what to do.

 

[Tom D]

Never seen a gross verses a net on the site records. Me big urban, no can help.

 

[J Grant]

Good Morning everyone,

I am doing an appraisal for a partial release of land. The bank loan encumbers the whole parcel with a manufactured dwelling on it. The borrower wants to split the parcel, and the bank wants to know whether the proposed site size will value at least the current loan amount or higher. So, there are two reports: one with the proposed land size making it subject to the split, and one as is referenced in the additional comments.

My problem is that the survey has a gross acreage of the total parcel at 7.49 acres but a net of 7.11 acres. Albeit not a tremendous adjustment for the as-is but for the proposed split valuation jumping almost 0.2 acres in this market is a big adjustment. I have turned in the report based on gross acres and this was a revision request. The difference between gross and net acres looks like it comes from a R/W based on the survey. The GIS shows 7.49 acres (the gross) owned by the borrower. Just want to know your thoughts on how to address or what to do.

Why are .02 acres compared to a total of 7 plus acres or half in a split ( 3.5 acres approx each- Why is that relatively small amount of land commanding a big adjustment? In my experience, buyers would barely notice it considering the large sie of the sites whether one total or split

A solution would be to cite that the cause of the difference is unknown, and the small amount of variance is unlikely to affect value.

 

[Mark K]

I suspect that the controlling authority is requiring a dedicated R/W, maybe 30' from the centerline of the road, or something similar for the split.

Currently, the owner probably owns to the center of the road and the municipality requires that you give them the RW area in fee in order to grant the split. If there is currently dedicated R/W, they want more, say 40' instead of 20'. SOP here.

Revise and go with the smaller acreage.

 

[Xavier Hargrove]

Why are .02 acres compared to a total of 7 plus acres or half in a split ( 3.5 acres approx each- Why is that relatively small amount of land commanding a big adjustment? In my experience, buyers would barely notice it considering the large sie of the sites whether one total or split

A solution would be to cite that the cause of the difference is unknown, and the small amount of variance is unlikely to affect value.

It is .2 acres. You are right, in reference to the 7.49 acres it doesn't do much but in reference to the 1.648 acres it is a good chunk of change. I am doing 71k an acre for adjustments in the 255k total value range.

 

[Xavier Hargrove]

I suspect that the controlling authority is requiring a dedicated R/W, maybe 30' from the centerline of the road, or something similar for the split.

Currently, the owner probably owns to the center of the road and the municipality requires that you give them the RW area in fee in order to grant the split. If there is currently dedicated R/W, they want more, say 40' instead of 20'. SOP here.

Revise and go with the smaller acreage.

Yea, that makes the most sense to me too. Thanks

 

[J Grant]

It is .2 acres. You are right, in reference to the 7.49 acres it doesn't do much but in reference to the 1.648 acres it is a good chunk of change. I am doing 71k an acre for adjustments in the 255k total value range.

Everyone works differently and every area and each assignment is different.

That said, I do not usually for res home sales adjust smaller or bigger lot sizes mechanically $ per sf as vacant because the price paid for a vacant parcel is often different than the additional X sf of a lot adds in contributor value. Sometimes it does not add anything. Other times it can a moderate amount, or a sizeable amount. In my experience, though, it often adds nothing to a moderate amount on lot sizes between 1.5- 2 acre total.


.02 acres is 8712 sf...( if that is the same figure you are working with )

 

[TerryRohrer]

.02 acres is 8712 sf...( if that is the same figure you are working with )

Off by a factor of 10, but I guess those of us who haven't done only residential appraisals won't be able to determine if that matters!

 

[Dublin ohio]

Ok I guess I am going to have to play stupid on my understanding of an ROW. I was always under the impression that a ROW is not a form of ownership but more similar to an easement. You still "own" the land.

 

[Carnivore]

Depends on your state laws

do property owners in North Carolina own the right of way through their property?


No, property owners in North Carolina do not own the right of way through their property:

• Easements: Easements are legally binding agreements or court orders that grant specific rights to others, such as the right to use another person's land for a specific purpose. Easements can involve a broader range of activities than a right of way, including parking, access, or even the installation and maintenance of utilities. Once an easement is legally established, it is generally not an option for a property owner to block it.