Positive External Obsolescence

[firstd]

Hello all - I'm a Commercial Appraiser in WA State. I have been doing a fair amount of right-of-way work recently, which has been challenging beyond my typical r/w experience.

Anyway, I'm dealing with a house that will have a 2-yr. Temporary Const. Easement (which may allow work at night). In my work history, we had often looked at the Cost Approach in order to more accurately reflect the land component breakdown. Someone mentioned to me recently the concept of Positive Extern. obsolescence. I was thinking one way to attack via the Cost would be to allocate whatever the land value component ends up as in the After, and ding it for add'tl depreciation due to functional or external obsolescence. The flip side is that this is only temporary, so a rent loss calculation may be more applicable.

Any input or thinking on ideology would be much appreciated.

Regards,
DC

 

[LAEVE]

Hello all - I'm a Commercial Appraiser in WA State. I have been doing a fair amount of right-of-way work recently, which has been challenging beyond my typical r/w experience.

Anyway, I'm dealing with a house that will have a 2-yr. Temporary Const. Easement (which may allow work at night). In my work history, we had often looked at the Cost Approach in order to more accurately reflect the land component breakdown. Someone mentioned to me recently the concept of Positive Extern. obsolescence. I was thinking one way to attack via the Cost would be to allocate whatever the land value component ends up as in the After, and ding it for add'tl depreciation due to functional or external obsolescence. The flip side is that this is only temporary, so a rent loss calculation may be more applicable.

Any input or thinking on ideology would be much appreciated.

Regards,
DC

What work activities does the temporary construction easement allow? Will access to the house be blocked?

And can all types of work be done at night? Jackhammering, heavy trucks traffic, bright lights, etc. would have a major impact on restful nights.

These activities could also have a negative impact during the day.

If the noise level is above a certain level, the house might not be habitable.

Not sure what positive external obsolescence could be.

 

[Tiffany Gibbons]

Hello all - I'm a Commercial Appraiser in WA State. I have been doing a fair amount of right-of-way work recently, which has been challenging beyond my typical r/w experience.

Anyway, I'm dealing with a house that will have a 2-yr. Temporary Const. Easement (which may allow work at night). In my work history, we had often looked at the Cost Approach in order to more accurately reflect the land component breakdown. Someone mentioned to me recently the concept of Positive Extern. obsolescence. I was thinking one way to attack via the Cost would be to allocate whatever the land value component ends up as in the After, and ding it for add'tl depreciation due to functional or external obsolescence. The flip side is that this is only temporary, so a rent loss calculation may be more applicable.

Any input or thinking on ideology would be much appreciated.

Regards,
DC

Get whoever mentioned it to you to explain. I have never heard of positive obsolescence (external) or otherwise. Sounds like an oxymoron.

 

[JTip]

2-yr. Temporary Const. Easement (which may allow work at night)

The words 'may', 'probably', 'might', 'perhaps' and 'kinda sorta' don't exists in the General Notes description of TCE. Read the plan notes to see what the TCE involves.

I was thinking one way to attack via the Cost would be to allocate whatever the land value component ends up as in the After, and ding it for add'tl depreciation due to functional or external obsolescence.

When dealing with TCE and the after value, there is NO affect to the after value! TCE is TEMPORARY. Once the project is complete, the TCE is extinguished, and all those sticks in the bundle return to the owner of the land as if nothing ever happened. The owner is paid for TEMPORARY use, nothing more, nothing less.

Someone mentioned to me recently the concept of Positive Extern. obsolescence.

I think someone is pulling your leg. Tell that someone you need some Relative Bearing Grease for your Disto.

 

[Zoe]

I think the rent cap would be hard to do and be credible. I am not saying you couldn't do it if you have the rentals to do it.

The house may benefit from the new road access. I don't know about noise after the easement is lifted. Have any other houses on the road sold?

 

[Zoe]

Land value as if vacant may be your easiest route on what is being taken. You have the remainder to consider also.

 

[Zoe]

You can put bonus on it for being frontage on the land most likely. That depends too. Tiffany and Jtip know a bunch about it.

You have to be concerned about the remainder as much as the take.

 

[Tiffany Gibbons]

The words 'may', 'probably', 'might', 'perhaps' and 'kinda sorta' don't exists in the General Notes description of TCE. Read the plan notes to see what the TCE involves.

When dealing with TCE and the after value, there is NO affect to the after value! TCE is TEMPORARY. Once the project is complete, the TCE is extinguished, and all those sticks in the bundle return to the owner of the land as if nothing ever happened. The owner is paid for TEMPORARY use, nothing more, nothing less.

I think someone is pulling your leg. Tell that someone you need some Relative Bearing Grease for your Disto.

Sounds like a snipe hunt. I've had a couple of ROW and condemnation classes.

 

[Mark K]

What exactly are you trying to value? The TCE? Standard procedure here is to value the land and then apply a 'rent' factor X the term of the Temp. Usually the appraisers use a % of the value of the site (5-10%) for the rent multiplied by the term, in your case 2 years. Appraisals for the state require a 3-year time period with the rent discounted back to a NPV. No residual damages and certainly no Positive External Obsolescence, whatever that is. LOL!

I just finished up one this week where the Ag field was worth $85K/acre (HBU light industrial development ground). In this case I did not use a % of the land value but instead used typical crop rent for the loss of income in the easement areas (perm and temp easements for sewer line).

 

[Tiffany Gibbons]

You can put bonus on it for being frontage on the land most likely. That depends too. Tiffany and Jtip know a bunch about it.

You have to be concerned about the remainder as much as the take.

Yes, just not enough information, post the aerial shot, lol