Single Family Acreage or Farm Property?

[Westside]

I have a new order for purchase of a rural acreage...first checked assessor and showed 14 acres. Then noticed that the MLS listing shows multi parcel sale and includes a total of 33 acres. Aerial map shows the extra land to be vacant, terraced fields, MLS photos show corn fields in the distance of the improvements. But the lender and the realtors are saying that this is not a farm and it is just excess land. I have plenty of experience with acreage properties, but this is very rare to find a simple "acreage" with this much land. And researching sales, I am seeing that the next highest site size for an acreage sale is 20 acres. Any advice? Is this truly to be considered an acreage property and not a farm property? Thanks.

 

[Michigan CG]

Well the Realtor and the lender are kind of correct, it is excess land (land that has its own highest and best use) vs. surplus land. It is two separate parcels and needs two separate appraisals.

From what I can remember, the Iowas board takes farmland very seriously and has considered agricultural land to fall under the license of a certified general, but don't quote me.

20 acres of farmland might be OK for cert res as long as you have farm sales and know how to value the land.

I still maintain my Iowa CG license.

 

[J Grant]

Mich is the expert so follow his advice.

But, I did want to add my thoughts...Is this truly to be considered an acreage property and not a farm property? Thanks.

YOU have to decide that! (and it will be your judgment after inspecting property or doing research per out buildings, planting, acreage/use of similar properties, zoning, HBU etc

The fact that the RE agent and lender are telling you what THEY classify the property as is a red flag. May want to pass on it?..

 

[sail143]

You are the one to classify the property based on highest and best use. The agent and lender are classifying for their convenience and fee making opportunity.

 

[J Grant]

You are the one to classify the property based on highest and best use. The agent and lender are classifying for their convenience and fee making opportunity.

Exactly. Brings to mind posts where people ask "The subject is a condo but lender wants me to appraise it as as a single family since it has a yard in back. Can I do that?", or, "The subject is a duplex and zoned multi family but client says appraise it as a single family because there are single family houses on the street. Is that okay?"

 

[Terrel L. Shields]

What is the utility? If it is cropland, it is farmland. If it is pasture, it is ranchland. If it a bunch of woods then it is recreational land. What it isn't is residential land "AS IS"...

It may be proposed as a subdivision or whatever, but "AS IS", it is likely some form of farmland and the USDA defines a "Farm" as producing or capable of producing $1000 worth of agricultural goods. That's a very low bar. Two acres of veggies can produce that much.

 

[Elliott]

What's the H/B use of the property? What is the zoning? When you find comparables with the same H/B use and zoning, what do they indicate the use of the property is?

I wouldn't really care what the realtor and lender say it "is."

 

[BRCJR]

Could be classified as a Rural Residential Lifestyle Farm.

 

[Vermonter]

Interesting how things differ from place to place. In my coverage area it's easier to find SFR comps on 10+ acres than it is on 1 acre.

 

[Terrel L. Shields]

Could be classified as a Rural Residential Lifestyle Farm

"Hobby Farm" - very common in this area. Arbitrary standards set by boards are unfortunate and ill-advised. It is the utility (HBU) that counts.

In my coverage area it's easier to find SFR comps on 10+ acres than it is on 1 acre.

It was my impression that Vermont is composed entirely of calendar scenes, a capitol, and no other towns actually exist there ...a sort of Northern extension of West Virginia...