Remaining Economic Life

[Mejappz]

You can see all the vacant site sales returned...

Where are they?

 

[alebrewer]

Where are they?

 

[Mejappz]

I get it there are none.

 

[George Hatch]

Just for demonstration purposes, I selected 'Residential' as the only criteria, and searched back to 1/1/2015 for the section of McKinney, TX below - said section being roughly 2 miles x 3.5 miles. You can see all the vacant site sales returned...

View attachment 49748

So, while in your experience, the answer isn't 'always', I must say that, in some cases, the answer is, in fact, never.

We have those areas, too, and it's never stopped me yet. I might have to go further out to find sales and I might have to go further back in time and I might have to use other data sources besides the MLS to find them.


As for "never" in this situation, I'm not sure I'd automatically agree with that. I'm pretty sure that if I had access to the local data I could put something together. It probably just wouldn't look like the appraisal of a subdivision home with model matches and such.

 

[George Hatch]

Anyways, if you're so confident in the credibility of your CA's, extraction should be a breeze, and should return site values that are spot on accurate...

Extraction is simple enough. After all, it's the first thing the sweatshops teach their trainees, right after telling them "forget everything you learned in your classes, I'ma show you how it's REALLY done".

I'm curious what you're going to do when your assignment is to appraise the orphan lot in one of those subdivisions 'cause the house burned down or was demoed due to being used as a crack factory or got hit with the killer mold from Mars. Skip the SCA because it will take too much work compared to what you're accustomed to doing for your SFR assignments? I can't see you doing that.

 

[alebrewer]

We have those areas, too, and it's never stopped me yet. I might have to go further out to find sales and I might have to go further back in time and I might have to use other data sources besides the MLS to find them.


As for "never" in this situation, I'm not sure I'd automatically agree with that. I'm pretty sure that if I had access to the local data I could put something together. It probably just wouldn't look like the appraisal of a subdivision home with model matches and such.

View attachment 49749

Do you realize how big an area that is?... For clarification, the area east of 75 is 'old' McKinney - a market in which there are, in fact, vacant site sales. You'll notice that in the roughly 10 mile radius of geography south of 380, east of 2478, and west of 75, there is one site offered for sale. Don't know what site that is, but it's in a neighborhood where there are acreage properties. So, while you might be comfortable making that leap, I would not. Kind of a stickler for credible results...

 

[alebrewer]

Extraction is simple enough. After all, it's the first thing the sweatshops teach their trainees, right after telling them "forget everything you learned in your classes, I'ma show you how it's REALLY done".

That's not been my experience, although - like RE - all appraisers are local I guess. My experience is that few folks actually know how to perform extraction - although many 'say' they did extraction (or allocation) in estimating the subject site value.

 

[alebrewer]

We have those areas, too, and it's never stopped me yet. I might have to go further out to find sales and I might have to go further back in time and I might have to use other data sources besides the MLS to find them.


As for "never" in this situation, I'm not sure I'd automatically agree with that. I'm pretty sure that if I had access to the local data I could put something together. It probably just wouldn't look like the appraisal of a subdivision home with model matches and such.

View attachment 49749

Also - just for grins, reduce your Zillow search to lots < 1/2 acre. I think most of the ones north of 380 will probably disappear...

 

[George Hatch]

Also - just for grins, reduce your Zillow search to lots < 1/2 acre. I think most of the ones north of 380 will probably disappear...

I have no idea so I'll take your word for it, but it doesn't matter. I can develop adjustments for size and location. I don't need the model match for that parcel in order to get to a value conclusion. It's not that I would volunteer to add difficulty to my assignment because I'm just as much a fan of expediency as anyone else. But if (as is often the case) I run into an appraisal problem that involves a property type that's thinly traded I'm still going to work the program until I run into something I'm simply unable to do.

Which in the case of valuing SFR lots leaves 'extraction' as a last resort for me. i'm not afraid of it, I just don't think its usually necessary.

I'm sure that you understand that the typical buyer for a vacant lot isn't they same type of buyer as for an existing SFR, right? The datasets they're looking at in their analyses and their decision making is going to be driven by different parameters than a happy homeowner would use. Etc, etc. If they don't have land sales nearby they'll expand their radius and add more modes of analyses to compensate.

 

[alebrewer]

I'll take your word for it, but it doesn't matter. I can develop adjustments for size and location. I don't need the model match for that parcel in order to get to a value conclusion.

I'm sure that you understand that the typical buyer for a vacant lot isn't they same type of buyer as for an existing SFR, right? The datasets they're looking at in their analyses and their decision making is going to be driven by different parameters than a happy homeowner would use. Etc, etc.

One more thing I forgot to mention, in reference to real estate being local. While I would assume that in California, which is a disclosure state, you can get sales information even for non MLS sales, Tis not the case in the great Lonestar state. Texas is a non-disclosure state, so if it's not listed on MLS, you don't get the sales price...