• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Question About Comparable Sales

Status
Not open for further replies.

PropTaxMan

Thread Starter
Freshman Member
Joined
Feb 2, 2014
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
California
I am in training toward my Certified General license, and have 2 years previous experience doing property tax appraisals (specifically agricultural and commercial properties). I currently work in an institutional setting.

The lead appraiser on a project that I am working on has asked me to reclassify two comparable sales that I recently added to the database. The comparable sales are 96 acres and 269 acres respectively. The 96 acre piece sold for ~ $1,050 per acre and is unplatted. The 269 acre piece sold for ~$950 per acre and includes a developed gravel road and was partially platted at the time of the sale. Both pieces are classified as residential/rural residential by the Assessor's Office. The seller's realtor for the 269 acre piece specifically told me that the buyer(s) purchased it to develop into rural home sites, and looking at current records this seems legitimate as the entire piece is now platted. It seems reasonably clear, IMO, that these pieces were purchased with development in mind since there is a good deal of rural development happening in the general area.

The subject is ~450 acres of farmstead and dry range. The range is in very good condition, which is a reflection of the seller's management practices (obviously). I realize that we are not supposed to appraise management practices. The seller's realtor told us that several different buyers have made offers but were unable to secure financing.

My concern with changing the classification of the 2 comparable sales within our database is that it will look like even though we KNOW they were not purchased for range use, we are comparing apples to oranges and calling the orange an apple. I'm not sure what the reason might be for this, but we have discussed on two separate occasions that the current offer for the subject property maybe be quite a stretch for the buyer. I just don't want it to look like perhaps we're trying to expand our range on comparable sales in order to justify a higher price per acre on the range land.

The lead appraiser is quite knowledgeable and has many years of experience so far it be from me to second-guess them. I'm just wondering if I am over-thinking or being overly ethically sensitive (imagining an ethical quandry where none exists), or if I am correct to question this?
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
Your issue is one of Highest and Best Use.

The comparables purchased for development sites have (presumably) a H&BU as development sites. That is what they are and that is how they should be compared.

If your subject does not have the same H&BU, then those other sites can still be used as comparables, but their difference in H&BU has to be (a) identified and (b) analyzed to determine if the different H&BU requires an adjustment when compared to the subject.

The lead appraiser with many years of experience should acknowledge this.

Good luck!
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
The lead appraiser is quite knowledgeable and has many years of experience so far it be from me to second-guess them
Did you ask then to explain their decision to you so that you could understand the basis for their request?

I currently work in an institutional setting.
What is the intended use of the assignments that you are currently working on? If doing property tax work why would their be a desire to inflate the value unless you work at the assessor office?

classified as residential/rural residential by the Assessor's Office.
How the property is classified by the assessor office does not have much weight in and of itself

It seems reasonably clear, IMO, that these pieces were purchased with development in mind since there is a good deal of rural development happening in the general area.
You have provided no info about the 96 acre parcel other than the unit price. While there is "a good deal of rural development happening" what is the level of demand? How long into the future is this expected to continue? These are issues that are addressed in the highest and best use as noted by Denis above.
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
The subject is ~450 acres of farmstead and dry range

I don't think "farmstead" has a lot of meaning except a description of what it is being used for. "Dry range" might be a description of the RL zoning district which is a flavor of ag land and most of the time has 160 acre minimum lot sizes (but also comes in the 40 and 20 acre varieties.) They're usually in areas where people like to have bit lots with a few beeves and horses to ride around. They can be susceptible to "rural sprawl." I suppose some wise guy can try to carve out a few big lot tracts but that takes a lot of entrepreneurial effort.

Changing the comp data to suit this one sale is not working for the taxpayer in a fair way and in the spirit of Rule 2. It's what drives them to companies like the one I work for.
 

Gobears81

Senior Member
Joined
Nov 7, 2013
Professional Status
Certified General Appraiser
State
Illinois
The question I am wondering is, what sales do you have at your disposal that you would rather use, and why do the sales which are the topic of this thread conflict with them? I understand that they were not purchased for range use, but similar to what Denis mentioned, what is the highest and best use of the subject and the sales in question?
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
After re-reading the original post it doesn't appear that the OP is working as an appraiser for the assessor on this assignment. So my previous post may not apply.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks