Questions about outbuilding value

[JTip]

I wonder if the appraiser was competent with the assignment, being a commercial (ag) property.

Is the appraiser a Certified Residential or Certified General? You can tell on the signature page, revealing the type of certification.

 

[brokenokie]

Deleted

 

[brokenokie]

I wonder if the appraiser was competent with the assignment, being a commercial (ag) property.

Is the appraiser a Certified Residential or Certified General? You can tell on the signature page, revealing the type of certification.

Certified residential, however, the home is being sold as residential.

 

[JTip]

Certified residential, however, the home is being sold as residential.

What if I wanted to buy a McDonald's and live in it as my residential home? We, as appraisers, have what's called 'highest and best use'. Just because the Mcd's is being marketed as a residential doesn't mean that's the best use, most valuable use, the legal use and maximally productive use. Just saying it is residential doesn't automatically make it residential.

Said outbuildings include a 100'x30' 9 stall horse barn with 2 garage bays, an office, hot water, and electricity and a 30'x40' metal quonset hut in like new condition. There are a few other sheds on the property as well,

9 stalls? "Office"? Quonset hut? I could see one of those on a property, standalone, but having several buildings, supporting the 'use' of the property.......not a typical 'residential' property.......

Does it matter that the buyer is a large animal veterinarian that intends to use this property as her practice as it is connected to her home property?

It's all adding up.

 

[brokenokie]

What if I wanted to buy a McDonald's and live in it as my residential home? We, as appraisers, have what's called 'highest and best use'. Just because the Mcd's is being marketed as a residential doesn't mean that's the best use, most valuable use, the legal use and maximally productive use. Just saying it is residential doesn't automatically make it residential.



9 stalls? "Office"? Quonset hut? I could see one of those on a property, standalone, but having several buildings, supporting the 'use' of the property.......not a typical 'residential' property.......



It's all adding up.

You have a solid point. Not sure if it would be appropriate to list the address so that you could see what I'm talking about, but regardless, 20k seems very low and I'm working on how to respond.

 

[JTip]

Don't dox yourself since it is FSBO.

Perhaps the bank is balking issuing a residential loan when "the buyer is a large animal veterinarian that intends to use this property as her practice".

Is the property worth LESS as a residential property and MORE as a commercial property? If the buyer explores commercial financing, maybe the property is worth more as commercial (as the intended use by the buyer) but doesn't want to pay for commercial financing services (ie commercial appraisal, commercial lending options (higher rate, shorter term).

Something is fishy.

 

[J Grant]

Don't dox yourself since it is FSBO.

Perhaps the bank is balking issuing a residential loan when "the buyer is a large animal veterinarian that intends to use this property as her practice".

Is the property worth LESS as a residential property and MORE as a commercial property? If the buyer explores commercial financing, maybe the property is worth more as commercial (as the intended use by the buyer) but doesn't want to pay for commercial financing services (ie commercial appraisal, commercial lending options (higher rate, shorter term).

Something is fishy.

IDK wrt fishy, or the bank balking at a loan. .
This sounds like a hobby farm- a house on a 7.5-acre lot having equestrian amenities - assume the zoning allows it.

In my area, I have appraised 5-acre-plus lots where a house, a barn, and paddocks are present. However, if it is a boarding stable, or in this buyer's case, being used to house a vet practice, it could be borderline commercial purpose - though if her vet office is elsewhere and she uses the barn horses to lay up for recovery, the two are different. Regardless of the plan, the appraiser's job is to is to appraise what exists on the property- and appraise the property at its HBU.

If it is set up as a horse boarding facility with a small house on the property, that is different than a well-finished, larger house on 7.5 acres that has a barn on the property. Some areas have a maximum limit of horses allowed per acre.

The type of area, zoning, size, and quality of the house, and equesiran amenities enter into the HBU and how much value the outbuildings, such as the barn, might contribute.

 

[Mark K]

Sounds to me like you have an incompetent Appraiser, either that or a lazy one. Probably an Appraiser used to doing cookie cutter, vinyl village appraisals, and had no idea what to do when he got out in the country. I have seen it many, many times.

Personally, I would just stick with my price and tell the buyer to come up with the extra cash. I will guarantee you the buyer knows the value of that building.

 

[Tim Hicks (Texas)]

As an appraiser who does lots of residential rural properties, it is hard to determine contributory value of outbuildings in other states. Several things come to mind on these outbuildings. A Quonset building is typically a lower cost building around here with a lower contributory value, but Texas is long way from Virginia to determine that. Barns can have different value depending on construction, stalls, concrete or dirt flooring, age and useful life. Much like a pool, the contributory value can be much less than actual costs less physical depreciation. Paired sales comparison is the only way to determine contributory value of such improvements.

 

[Trihard]

As an appraiser who does lots of residential rural properties, it is hard to determine contributory value of outbuildings in other states. Several things come to mind on these outbuildings. A Quonset building is typically a lower cost building around here with a lower contributory value, but Texas is long way from Virginia to determine that. Barns can have different value depending on construction, stalls, concrete or dirt flooring, age and useful life. Much like a pool, the contributory value can be much less than actual costs less physical depreciation. Paired sales comparison is the only way to determine contributory value of such improvements.

The majority of pole barns and out buildings in my area sit empty. How do you figure out the contributory value of an empty outbuilding? Some can make the case that it isn't worth much,