Site Vs. Location

[Mike Garrett RAA]

In answer to Bill's question about Fee Simple vs Leasehold, I would not attempt to compare the two IN MY MARKET; however (and there is always a however in life), there probably situations and markets where it might be necessary. I did not invent the form and I have no intention on trying to "re-invent" it.

 

[Willie]

Originally posted by moh malekpour@Nov 14 2005, 11:21 AM
How can you ignore the lot size adjustments when everything else is equal? A typical lot size in my area for detached SFR is +/_ 6000 sqft but nowadays is getting smaller down to +/- 4000 sqft. If tow houses that have everything the same but one has 2000 sqft lager than the other, the one with larger lot doesn’t have more value? Can’t the owner of larger lot built a swimming pool, a playground for kids, a mother in law, a little garden on that extra 2000 sqft? Aren’t those extra potential valuable and couldn’t be considered H&BU of extra lot size?

Location adjustment is for lot location not lot size, so I adjust for both. When I adjust a comp to the subject for its location, I make the location value for these two homes equal. If they are equal in location but one has larger size the other, then the larger one has more value because the possibilities and potential that are in the H&BU of that extra lot size

moh, and you have the data to prove it, so that is fine.

In Jim's example, he had large tracts with many various charachterics, and very little data.

On that one he has just turned in, I hope his wife can bat her eyes and look pretty, because she may find herself having to do so, at some point.

I would rather be defending my postion on one issue, that being site value, than site size/location/topography/timber/road frontage/water availabitly/soils/view etc. Again, you may be able to break all these out and adjust for them. I can not, on larger complex parcels, on the subject nor the comps.

Jim is right, on his given example. It sure does simplify things.

 

[Mike Boyd]

Scene: Superior Court, Anyplace USA

Case: Jones Buyer v William Appraiser.

Plaintiff Attorney: "William; you are familiar with the appraisal form you used when you appraised Mr. Buyers house, would that be safe to assume.

William: Yessir. I have used this form on 5,000+-reports.

Attorney: Well then, in this report form about halfway down on page 1 there is a section for market analysis, is that right?

William: Yessir.

Attorney: And within that market analysis there are various items of comparision. That is, to compare Mr. Buyer's house with others that have recently sold nearby. Is that right?

William: Yessir.

Attoreny: (hands a copy of report to William and announces to court.) I would like to present exhibit A, your honor, the appraisal report that identifies Mr. Buyer's property. Is this the report you completed and signed, William?

William: Yessir.

Attorney: If you look at the comparison grid it appears that almost all the features of Mr. Buyer's house are equal in value to ALL the properties used in the comparison analysis, is that what YOU see, William?

William: Well, uh, not exactly, you see I........

Attorney: YES OR NO, WILLIAM !

Judge: WILL THE DEFENDANT PLEASE ANSWER THE QUESTION.

William: I lumped the adjustments for different features together. You see? Location and site. I have brackets tying the two together and made a single adjustment.

Attorney: From that I take it that your answer is NO, that they are NOT all equal.
So, William, are you saying all the features are NOT equal but you elected not to adjust the individual features but arbitrarily lumped two or more features together? How many other features do you show as equal but have lumped with other features so you would only have to make one adjustment?

Defense attorney requests a 15 minute bathroom break.

Now it's me asking, William, how does lumping adjustments together make it more clear if you are challenged?

 

[Don Miller]

I often run into the following in small towns: Subject is on the highway a half mile from town on one acre. Sale is in town on a 75 X 140 city lot. This is a small town so you have to use the comp.

Both sites are worth $18,000 based on tons of data.

Someone posted this earlier, and I also have the same problem.

Now it's me asking, William, how does lumping adjustments together make it more clear if you are challenged

How do you adjust them? The only way that makes sense to me is just one overall net adjustment.

Or, like many I have reviewed, just say "similar" on everything and make no adjustments.

 

[hastalavista]

Originally posted by Don Miller@Nov 14 2005, 01:48 PM
How do you adjust them? The only way that makes sense to me is just one overall net adjustment.

Or, like many I have reviewed, just say "similar" on everything and make no adjustments.

I think that is acceptable as long as there is sufficient explanation as to how the adjustment analysis was completed. The grid shows the "results" of the adjustment analysis. The addendum needs to provide the "whys/wherefores".

 

[Willie]

Mike, so long as you discuss it, and explain what you did, there will be no problem.

If can prove view adjustments or location ones, topo, soil, frontage, etc go for it. They all make up what is described as the site, and the comparables will have these features too.

 

[incognito]

Because, as William explained, as did I in my "bracket" example, that the adjustment is explained in the text of the report.

"Barrister, Appraisal is an art, not a science." Become cocky and say "In an effort to not mislead the reader, as is required by USPAP, which incidently is FEDERAL LAW, I did not want to confuse the reader with the really difficult task of support individual adjsutments for many different site items, including width, depth, topography, view, frontage, etc., etc., etc.".

Pause, then state "the client ordered a summary report. As such, in depth discussions of such matters as derivation of individual adjustments for all of the site features was not within the scope of the appraisal."

Go on to say "the principal of substitution is what these adjustments are based on, and it is quite easy to see here that no 2 sites are completely similar in all aspects, yet similar overall appeal sites with differing attributes have been seen to sell for similar prices, and additionally have been seen to contribute similar value to the overall property value. "

Turn abrubtly to the jury, and say with a smirk "Therefore, Sherlock Holmes, the answer to your question is No, they are not equal, but they have equal contributory value."

 

[Mike Garrett RAA]

Ahhhh .... USPAP is not federal law.

 

[Mike Boyd]

With THAT reasoning, William, why not make only one large adjustment in the grid and then explain what you have done. I maintain each item in the analysis calls for and adjustment or an indication that it is equal. I would rather provide proof or my subjective reasoning for an adjustment rather than lumping two amenities together.

Whatever works, I guess. I have always kept them separate.

 

[Big ole Boy]

Whatever model you use - simply explain its weaknesses and its strengths and WHY you believe what you are saying is interpreting DEMAND with a higher possibility of accuracy verses an alternative method of measurement.

For every argument you will find a second or a third likely possibility depending on the symmetry of your metrics.