Request to appraise a parking lot as a residential appraiser

[sputnam]

I think.. if you have to ask in the Forum... you aren't competent to do the appraisal.

 

[Tom D]

I think.. if you have to ask in the Forum... you aren't competent to do the appraisal.

be kind, them is a trainee. so asking a question is making you unqualified. smart enough to ask it here, might have a dope as a supervisor.

 

[Overimprovement]

I think.. if you have to ask in the Forum... you aren't competent to do the appraisal.

They weren't asking about competency (though that is also a valid point which others have addressed), but rather are they allowed to do it...which has also been addressed.

 

[Mark K]

I think.. if you have to ask in the Forum... you aren't competent to do the appraisal.

Disagree.

That's like saying that anyone that asks a question regarding a certain aspect of a property should decline the assignment.

To the OP: It all depends on the HBU of the site.

 

[Tom4value]

I think.. if you have to ask in the Forum... you aren't competent to do the appraisal.

Lighten up, Francis! (From the 1980 movie “Stripes”, for all you young’uns). The whole purpose of this forum is to ask questions on how to do things.

 

[Carnivore]

Who is the client and what is the purpose of the appraisal? The question of, “am I allowed to do the appraisal” (based upon license designation) only comes into play if the assignment is for a federally related transaction. If it is, and you determine that the HBU is for a commercial use, then no, you can’t.

If it is for just the owner for any non-federally related transaction (I.e., not for lending, tax purposes, etc.) then you can based upon if you are competent to do it.

This is the Best Answer above. The competency Rule is a Big Hurdle to overcome. Mow were getting

 

[Raven59]

When deciding whether a residential appraiser can or should appraise a parking lot, it is crucial to consider the client and the purpose of the appraisal. If the HBU of the parking lot is commercial, a residential appraiser may not be qualified due to licensing restrictions. The critical factor here is the competence of the appraiser. The appraiser must assess their skills and knowledge before accepting an assignment outside their usual scope. The phrase "you don't know what you don't know" comes into play here. Appraisers must ensure that they practice with competence. If you have helped with similar assignments, you may be able to be qualified. Your status tag says Appraiser Trainee.

 

[sputnam]

Disagree.

That's like saying that anyone that asks a question regarding a certain aspect of a property should decline the assignment.

To the OP: It all depends on the HBU of the site.

No... it isn't. Understanding what appraisal assignments you are competent to accept is very basic. The OP's concern is very basic... Is it a commercial property or not? If in doubt, decline or associate with a more experienced/qualified appraiser for the assignment.

 

[Surf Cat]

I think the question should be rephrased.

How would you go about and what steps would you take to appraise a parking lot in a small borough with commercial zoning?

The parking lot is in town, commercial zoning, and it appears the OP has assisted on other commercial projects. I'm assuming the OP's mentor is an AG. So, instead of a licensure question, it should be a "how to" question.

 

[George Hatch]

If the property is zoned for commercial and depending on that jurisdiction's zoning regs, it's possible 1-4 uses aren't legally permissible. Or, maybe they are and the potential for development as mixed use or multi-family is more valuable than for straight commercial development.

Not specific to this particular example, but when it comes to appraising commercial land values some of those sales may have existing improvements. Whether those sales represent the value of the existing use vs the underlying land value isn't always demonstrated by the buyer's motivations. They may continue the existing use in lieu of not having other choices in that area, even though the property is worth more for land value. The brokers don't always know what they're doing with commercial land values.

I inspected for 2 assignments yesterday. One of them is a small freestanding office building in Hollywood, just south of Hollywood Blvd. There is some question about whether/not the existing use is the HBU. Even though I'm only going to appraise it one way (based on whatever the HBU is, I can't get to that conclusion without understanding the values for both land and offices in that area. That means I need access and the ability to analyze both datasets. That includes analyzing sales that might not have been marketed for their land value but may still possibly be worth more on that basis. In effect, I'm also looking for land values among the properties that were marketed for their existing use. (I have already found 2 such "land comps" that way for this assignment).

My research has me going through sales on one screen and keeping the city's zoning map (ZIMAS) open on the other screen to see what their zoning and max residential densities are. I need to understand what all the different densities are for both the multi-family and commercial zoning regs because in the city of L.A. all of their commercial zoning allows for high density residential. Because C-1 zoning in LA has the same max residential densities as R3 zoning they are comps for each other. C2 zoning has the same residential development maximums as R4 zoning, so those are often directly comparable to each other. The reason they're comparable is because at the moment residential development is financially feasible whereas office/retail isn't always feasible.

My point is that when it comes to appraising land (especially) the appraiser needs to get a handle on all 4 elements of the HBU analysis because land is all about potential as well as the current market trends for what goes on that land.