All,
I am a writer and citizen of Bend, OR, where we have had a bit of a run-up in values that is now reversing itself. I have a question concerning how you use an adjacent parcel purchased by the buyer in an excess land value in use appraisal.
At our last City Council meeting a buyer approached the Council with a request, supported by staff, to purchase a 4400 sq ft property on the corner of a roundabout in an up and coming commercial area close in to the river and downtown. His appraiser valued the property at $91K and the Council approved the sale for $100K.
In Nov. 06 the buyer purchased the adjacent 5500 sq ft property, with an 80 year old 725 sq ft house and 500 sq ft garage, for $439K. His proposal submitted to the city, as well as the appraisal's HBU scenario, requires the demolition and asbestos abatement of this improvement.
In the appraisal, the appraiser listed five raw land sales scattered around the city, ranging from 23087 sq ft to 174012 sq ft. Only one parcel, the 174K one, even has the same zoning, Commercial Convenience.
Even though the appraiser noted that the HBU would be combining the two parcels, and that doing so would enhance the value of the buyers adjacent parcel, the appraiser made no mention or calculation regarding the parcel in determining the valuation.
In looking over the appraisal, it seems that although "...the value reflected in this report is Value In Use and not Market Value", he used "comparables" to determine the valuations. But not the adjacent parcel's purchase price, which to me seems the most obvious comparable. And just across the street, on another corner of the roundabout, a 10,500 sq ft property with a restaurant of 1000 sq ft sold for $620K in Jan, 08.
Is this a feasible appraisal? I've questioned the appraiser about it, and when I detailed these facts to him he replied by saying:
"By the nature of your questions and tone of your messages, you obviously have no understanding or background in complex commercial real estate valuation. I don't know who you are or what your objectives or motivations are. I have no obligation to spend an in-depth amount of time explaining any more of this to you. If you would like me to explain all of this in intimate detail to you I would be glad to do so. I charge $250 per hour for consultation services with a minimum of four hours."
I am considering writing an article about this purchase for the local weekly, since it was preceded by several hours of public debate over $140K in monies for maintaining our bus system at current levels. This sale took all of 15 minutes, even though I expressed my concerns and listed the surrounding land values. At least two of the seven councilors also expressed some concern.
Any input is greatly appreciated.
I am a writer and citizen of Bend, OR, where we have had a bit of a run-up in values that is now reversing itself. I have a question concerning how you use an adjacent parcel purchased by the buyer in an excess land value in use appraisal.
At our last City Council meeting a buyer approached the Council with a request, supported by staff, to purchase a 4400 sq ft property on the corner of a roundabout in an up and coming commercial area close in to the river and downtown. His appraiser valued the property at $91K and the Council approved the sale for $100K.
In Nov. 06 the buyer purchased the adjacent 5500 sq ft property, with an 80 year old 725 sq ft house and 500 sq ft garage, for $439K. His proposal submitted to the city, as well as the appraisal's HBU scenario, requires the demolition and asbestos abatement of this improvement.
In the appraisal, the appraiser listed five raw land sales scattered around the city, ranging from 23087 sq ft to 174012 sq ft. Only one parcel, the 174K one, even has the same zoning, Commercial Convenience.
Even though the appraiser noted that the HBU would be combining the two parcels, and that doing so would enhance the value of the buyers adjacent parcel, the appraiser made no mention or calculation regarding the parcel in determining the valuation.
In looking over the appraisal, it seems that although "...the value reflected in this report is Value In Use and not Market Value", he used "comparables" to determine the valuations. But not the adjacent parcel's purchase price, which to me seems the most obvious comparable. And just across the street, on another corner of the roundabout, a 10,500 sq ft property with a restaurant of 1000 sq ft sold for $620K in Jan, 08.
Is this a feasible appraisal? I've questioned the appraiser about it, and when I detailed these facts to him he replied by saying:
"By the nature of your questions and tone of your messages, you obviously have no understanding or background in complex commercial real estate valuation. I don't know who you are or what your objectives or motivations are. I have no obligation to spend an in-depth amount of time explaining any more of this to you. If you would like me to explain all of this in intimate detail to you I would be glad to do so. I charge $250 per hour for consultation services with a minimum of four hours."
I am considering writing an article about this purchase for the local weekly, since it was preceded by several hours of public debate over $140K in monies for maintaining our bus system at current levels. This sale took all of 15 minutes, even though I expressed my concerns and listed the surrounding land values. At least two of the seven councilors also expressed some concern.
Any input is greatly appreciated.