Putting a value on acreage adjustments, Questions

[Ray Miller]

I just had a reviewer call me about acreages adjustment being different for subject and comparables in a review of a property.

I don’t know how to ask this question so it makes any sense or get across what I am trying to say.

This is about small acreages values. I am doing several reviews that are homes on small acreages, five acres to 20 acre sizes. The same for the comparables except they range from 2 acres up to 40 acres.

Six out of seven appraisers gave the same general value per acre to the subject and the comparables... They did this regardless of where the subject and comparables were located. Just a brush stroke across the board of the same value on the acreages.

Yet when I do market extraction and raw lot sales I am finding depending on the location, amenities or features that the land has the values can be several thousands dollars in difference per acre. One appraisal they value the acreage at $3500 per acre yet some of the comparables land value was double that amount, some at half that amount.

I have always adjusted my acreages depended on what the land was selling for in the area. Some of my comparables may be adjusted at xxxx and others in the same report at ccccc against the subject. In other words some may be positive adjustment and some may be negative.

I told the reviewer land values different for several reason from township to township or location.

I guess I am asking for input from others on how they do it.

 

[Lee Lansford]

I just had a reviewer call me about acreages adjustment being different for subject and comparables in a review of a property.
...

I told the reviewer land values different for several reason from township to township or location.

I guess I am asking for input from others on how they do it.

Ray,

If you explained the logic of the adjustments in your report of the appraisal, shame on the reviewer for calling you.

Lee

 

[Ray Miller]

Ray,

If you explained the logic of the adjustments in your report of the appraisal, shame on the reviewer for calling you.

Lee

I sure did, but she seemed not able understand how the values could be different for the acreages due to the different factors. She tried to tell me that acre values in the rural area should be the same. It did matter that it back up to public land, or had a trout stream on it, on the soild is different, or the rock outcropings can make a difference, Dirt is dirt. I talked with her for about 15 minutes. then just ask her to have her chief appraiser call me.

 

[Mary Tiernan]

Why not make a location adjustment instead?

 

[DMZwerg]

Why not make a location adjustment instead?

Sounds to me that this may be what the reviewer was expecting, not for location to be adjusted in the acres directly.
On the other hand I can see type of land (swamp, wood, agriculture, residential, etc) being appraised at different rates not even considering location. Parcel size can also make a difference when there are no exact comps (say +/-25%). So given all those factors wouldn't varying adjustments (with lots of explanation) make the most sense in many cases?

 

[PropertyEconomics]

Ray .... I never make adjustments per acre for the exact reason you describe.

In the addenda I list the land values of each of the sales and then adjust on a dollar for dollar basis ... it seems if you set this out, and say it is based upon land analysis within each of the comparable areas, it works.

Too many factors affect the value of land on a per acre basis, thus I simply do it on a land value to land value basis and let it be done.

 

[PLCG]

You are dead on, Ray.

I am currently pulling my hair out over unimproved land sales. Too few sales too many variables. Some is currently farmland, all have varying amounts of trees, rock outcroppings, defunct slate mines, flood plain, easements. m2:

 

[The Bob]

You just need to 'splain what you are doing.

 

[Lee Lansford]

I sure did, but she seemed not able understand how the values could be different for the acreages due to the different factors. She tried to tell me that acre values in the rural area should be the same. It did matter that it back up to public land, or had a trout stream on it, on the soild is different, or the rock outcropings can make a difference, Dirt is dirt. I talked with her for about 15 minutes. then just ask her to have her chief appraiser call me.

Ray, the practice by others to consider differences in acreage equal on a per acre basis allows the unqualified to continue working as appraisers. Seriously. What other explanation might there be?

Lee

 

[Terrel L. Shields]

They did this regardless of where the subject and comparables were located. Just a brush stroke across the board of the same value on the acreages.

Land (site) should be valued as if vacant and therefore, site adjustments are dollar for dollar adjustments. Site A is worth X dollars and the subject site is worth B and B - X = Adjustment...