Site Adjustments

[Hoosier Country]

To address some questions: I have comps of houses less than 20 years old on 20-50 acres, but the improvements don't bracket GLA. I included some new builds of rural subdivision sales just to reflect that feature of the subject as well. Kind of attacking it from all angles. The rural subdivision sales line up with the subject dwelling very well except in terms of site size.

 

[J Grant]

To address some questions: I have comps of houses less than 20 years old on 20-50 acres, but the improvements don't bracket GLA. I included some new builds of rural subdivision sales just to reflect that feature of the subject as well. Kind of attacking it from all angles. The rural subdivision sales line up with the subject dwelling very well except in terms of site size.

How large are the lots on the new subdivision sales?

I personally doubt I would ever use new home sales on a smaller lot ( assuming ) just to bracket GLA. A totally different buyer -I'd rather use a 3-year-old rural acrage home sale than do that.

How much different GLA is there between your rural houses on 20-50 acres?

 

[Gobears81]

It's also possible that the valuation of the 120 acres is just not that accurate. The data is just not that good for something like that.

Inaccurate isn't a term that applies to my appraisals

 

[Hoosier Country]

How large are the lots on the new subdivision sales?

I personally doubt I would ever use new home sales on a smaller lot ( assuming ) just to bracket GLA. A totally different buyer -I'd rather use a 3-year-old rural acrage home sale than do that.

How much different GLA is there between your rural houses on 20-50 acres?

 

[Hoosier Country]

All large acreage sales are 700-1100 SF larger. No applicable sales that bracket.

 

[J Grant]

All large acreage sales are 700-1100 SF larger. No applicable sales that bracket.

What size is the sites for the new subdivision homes?

I would not bracket the sf and simply adjust, or I would use a 2-3 year old large acre site to bracket rather than new construction.
700- 1100 larger - one can always expand a house by building an addition depreciated-cost to build is a credible way to adjust for sf in a situation like this

 

[NC Appraising]

I have gone around and around this with appraisers in my office for years.

New construction on 40 acres in the country. I have comps on acreage but am also including new builds in rural subdivisions. The site adjustment:

I was taught to do about half what the per acre value of land is, as the first 5 acres is the most valuable. So a $3000 adjustment when land is selling for ~$6000/acre. For my current appraisal that leaves my subdivision comps showing way low. Common sense tells me the site adjustment should roughly be the difference between the site value for each property. So if the subdivision site is worth $30k and my subject site is valued at $287k, shouldn't the site adjustment equal roughly $257,000? If i make a $6000/acre site adjustment then the subdivision comps' adjusted value is in line with my other sales.

Make it make sense.

The theory is somewhat accurate. Law of Diminishing Returns.

Most UWs question me if I make the same site adjustment for a home that is on 2 acres and a home that is on 20 acres.

Same for vacant land.

It also depends on your market. Most owners tap out on 5 acres in my market. 5 acres offers just the right amount for privacy and their desired use for the site. More taxes.

 

[Joe Flacco]

It sounds like the situation is that what you have available is older home comps on acreage and new construction on subdivision lots. So all comps will probably have positive net adjustments.

You can estimate the adjustment for condition comparing older home and new construction on subdivision lots.

You can estimate the adjustment for the acreage based on difference in the value of the land.

Put the data in the report.

I wouldn't base the adjustment on $ per acre. Just compare value of 40 acre vs value of subdivision lot and adjust the difference. You don't want to do the adjustments on a per acre basis.

 

[J Grant]

It sounds like the situation is that what you have available is older home comps on acreage and new construction on subdivision lots. So all comps will probably have positive net adjustments.

You can estimate the adjustment for condition comparing older home and new construction on subdivision lots.

You can estimate the adjustment for the acreage based on difference in the value of the land.

Put the data in the report.

I wouldn't base the adjustment on $ per acre. Just compare value of 40 acre vs value of subdivision lot and adjust the difference. You don't want to do the adjustments on a per acre basis.

A sale in a new home subdivision is not a comp for a larger acreage existing home.

Typically it is a completely different buyer.

 

[Joe Flacco]

A sale in a new home subdivision is not a comp for a larger acreage existing home.

Typically it is a completely different buyer.

What would you do when there is no new or recent construction on 40 acres then?

He is saying the site adjustment is $250k. Probably about the same adjustment when comparing new or recent construction with a 30-40 year old home.

Is a sale of a 30-40 year old home on 40 acres also not a comp for new construction on 40 acres?

What would you do?