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"Strip" Appraisal??

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Frank Bertrand

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Aug 21, 2002
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Certified General Appraiser
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Pennsylvania
Nooooo, this isn't an appraisal you do with your clothes off, or of a strip club, but one appraiser called the type of report they prepared for appraising a piece of land 25 feet by 1200 feet for a right of way. I looked in my refernces, didn't find anything regarding a 'strip' appraisal. Anyone know of this??
 

Don Clark

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Virginia
8)
Frank,

It is a physical segmeny of usually a larger parcel. It is forming an opinion of value of that small portion, taken from the whole. Many appraiser who work for the state do this type of an appraisal on a regular basis. I suggest consulting with your state highway department for examples, or take a course offered by a professional organization that specializes in this type of an appraisal.

Don Clark IFA
 
A

Anonymous

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There is an organization of right of way appraisers, this is a specialty and perhaps you should refer the job to someone who normally does this type of work.
 

Restrain

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Jan 22, 2002
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Certified General Appraiser
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Florida
A quick suggestion. Look at the property value before the strip is removed, then look at the value of the property after the strip has been removed. The difference should be a supportable estimate of value for the strip as a vacant piece of land. Also, its going to depend on whether it's along the front, along the side, or through the middle of the property. The second question is, what is it going to be used for? If it's for an access drive to a property behind the property, you're going to have traffic that's going to affect the original tract. If it's for widening of the main road, you're going to have to look at traffic forecasts and how close the new ROW is going to be to the existing improvements.

In other words, a detailed analysis of the before and after is needed. That will give you your value.
 

Frank Bertrand

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Pennsylvania
I was retained to do an easement value on a plot of land that represents 0.003 per cent of the toal parcel, that's right, less than one-half of one percent. I call this an easement valuation because that's what it is. It will be the estimated value of a parcel held in less than fee simple absolute.
I was provided with a copy of a report that although the appraiser mentioned the 'before and after' technique that was described earlier in this thread, the appraiser did a 'strip appraisal' report, the definition of such a beast escapes me, thus the initial question posed to the forum.

Although I am a card-carrying member of the International Right of Way Association I could find no reference to the appraiser's 'strip report' in its archives.

The before and after technique I don't think is appropriate as the percentage impacted by the easement is EXTREMELY small and when one is dealing with inexpensive forestland to begin with
the 'before and after' technique looks kind of lame.

My valuation will probably be a percentage of the observed market value per acre of similar land in this area. Easement valuation is an interesting topic, since it seems easement prices have nothing to do with the actual value of the parcel and more to do with baragining, game theory and personalities.

Can't wait to get to court with this one!!! ;)
 

Fred

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Virgin Islands
Strip Appraisal appears in the Eaton book. I do not have the second edition. I suspect you will find that government reviewers will be familiar with the term.

You are right that the reason for doing a strip appraisal is generally to avoid unnecessary calculations. However, if you are in a before-and-after jurisdiction, you’re a strip appraisal would have to reach the same conclusion as before/after. That is, say you come to a value of $0.50 per square foot. As long as that is pro rata, it will not matter if you do a before-and-after or apply the rate to the strip, the answer will be the same. You should probably state that in the report.

Just to throw a little more wood on your fire -
I have only heard the term strip appraisal used for total takes, never for an easement. As you observe, the easement value (or possibly contributory value) you seek is actually a fraction of the whole property and a fraction of the strip. But the easement itself is not the strip, just a partial interest in the strip.

"easement prices have nothing to do with the actual value of the parcel and more to do with baragining, game theory and personalities."
That is because the actual easement itself is only part of what is conveyed. The rights connected to the easement may significantly increase in value to dominant property and decrease in value to the servient property. After all, very few buyers want an acre of residential property 5 feet wide and 8,000 feet long, unless the acquisition enhances some other holdking or activity.

Hope there is something in here that helps.
 
Joined
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North Carolina
Frank

Ditto what the other posters have said about strip appraisals.

In all cases I have heard reference to strip appraisals, it has been a small take of the parcel. The intent of the "strip appraisal" is to avoid the costs attendant with the more time consuming before and after valuation.

The assumption that is almost always made by the condemnor in these cases is that it is such a small part of the whole, that there can be no damages, or that damages are nominal. As Steve S. stated, they are asking you to do is come to a pro rata value of the land (per square foot or acre) valued as the whole and apply that the value of the take, but without consideration of damages or benifits to the remainder. Clearly this is a good procedure cost wise if there are no damages or benefits, but it leaves the appraiser on the hook for those assumptions.

In theory, whether to consider damages or benefits becomes a matter of statute. In North Carolina, damages and benifits suffered by a property owner by a NC DOT a road widenings would be treated differently than the same road widening by a city or county even for an otherwise identical project.

As another poster mentioned, the appraiser who undertakes one of these assignments needs to make sure that this underlying premise is valid before buying into this limited scope of work. You must make certain that the take (be it temporay or permanent) does not adversely impact the value. If there is substantive damages or befits occurr, before after valuations and the 9 part breakdown as described by Eaton is warranted.

If there is nominal damage, in addition to the value of the take, the market value of the acquisition is often shown as the value of the take plus damages. The most often seen example in my market is where a small strip is taken for a road widening by the city and there is some landscaping, fencing or some other minor improvement being taken. The land is valued pro rata, and some nominal charge is allocated for the landscaping.

Strip appraisals are generally not well recieved in litigation, except in the neogtiation phase. If you accept these assignments, be sure to advise your client you will need to update the report with a full blown appraisal for expert witness testimony.

Regards

Tom Hildebrandt GAA
 

Mike Garrett RAA

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Colorado
No reference to that term in the Languare of Real Estate Appraisal..(1991), Fundamentals of Real Estate Appraisal 1975 (I have the original + 2001 edition) or Real Estate Appraisal...1960. That is as far back as my library goes.
 

Mike Garrett RAA

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That is Language of Real Estate Appraisals...damn fingers don't work anymore!
 

Fred

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Retired Appraiser
State
Virgin Islands
Tom,
I do not see why a strip appraisal is a reducing any scope. Many reports go through the exercise of creating the appearance of before-after, by stating in the after section that except for the minor reduction of functional utility caused by a 0.25% reduction in size, the sales analysis and the conclusion of $0.50 per square foot developed in the before appraisal is fully applicable to the after parcel.

Strip Appraisals alsoderive credible and reasonable compensation estimates where before-after cannot. For example, suppose the taking is three feet of paved walkway from the edge of a 150,000 square-foot neighborhood center. Assume that a strip appraisal would indicate that the taking is 0.25% of the overall center value. It would be absurd to try to show that loss with direct capitalization, ie, that the loss of this three-foot walkway is going to reduce future net income by 0.25%.

Which would be a more accurate way of determining how much you spent on lunch:
1) look at the receipt
2) have your accountant produce a statement of net worth before you go to lunch and another one after lunch; and subtract one from the other?
I do not see any reason why a strip appraisal, when appropriate and used correctly, would not hold up in court; unless there is some other defect in the appraiser's work.

As a side note, a federal reviewer telling me that my strip appraisal had to be "limited" because I did not appraise the whole property and only used one approach is how I came to learn USPAP. Up to that point, keep a file for five years, was the only thing I knew.
 
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