Subject is across the street from an auto junk yard

[chris moore]

I have just been assigned a pre-foreclosure appraisal order on a 7 acre parcel with a 2000 sf brick home that is across the street from an automobile junk yard. Of course, sales that are across the street from a junk yard are kind of hard to find. Also, realtors don't often include the phrase "beautiful view of junkyard/landfill/county jail" in their MLS listings. Obviously there will be some external obsolescence, but without sales data, what can I do?

Any suggestions would be greatly appreciated.

Chris Moore

 

[Ross (CO)]

Chris, ...... When you say pre-foreclosure appraisal does that mean that you are not going to be getting an inside look at the property, as in....don't contact the owner and do drive-by observations only ? That is an unfortunate reality of this sort of assignment but be sure to acknowledge that as part of your client's "scope" for your reporting. Investigate the zoning details around this home as it may be an "island" amidst commercial stuff, whereby H.a. B.U. may not be residential but another commercial business, especially if it has 7 acres! Be sure you capture several photo views with house and part of junkyard if possible or stop and take direct shot of just what one would see if looking toward the place from the front yard of house. The lack of other junkyard-proximate home sales may be limited so you can certainly give consideration to other sorts of commercial operations like (new) car dealerships, garbage and sanitation truck yard, construction companies, etc. While your view may be mostly the unattractive look of dead cars there is similar disfavor with plenty of lights and active vehicle traffic of other businesses to throw an effect upon a home value. True, usually an MLS listing which speaks of views only mentions the good ones, but make those calls and find out. Good luck.

 

[Anonymous]

Chris,
What is the zoning of this property? What is the highest and best use? Perhaps the subject has value as a junkyard.

 

[chris moore]

Thanks for the replies...

The subject is in an area where small acreage tracts are quite common. Zoning in the area is either non-existent or recently zoned agricultural, in which case the junk yard was grandfathered in. The HBU could be as a junk yard, but really only as an expansion of the existing business. To the majority of potential buyers, this property will be thought of as residential with a bad view. This property, by the way, is a few miles outside the city limits in an area of mostly residential properties. It is, however, at the corner of a somewhat busy intersection, but could not be described as a busy commercial area. Therefore, my conclusion is that the HBU is residential; and, there is a certain amount of external obsolescence due to the presence of the junk yard. Now I have to throw a dart at my trusty dartboard to determine what kind of adjustment to make.

 

[Terrel L. Shields]

The junk yard is an eyesore. The buyer will likely only buy if the property is discounted ...a bargain. Marketing time will be extended because of the lack of buyers who like junk yards and/or because the discount is not high enough. Zip for comparable sales even 10 year old ones.

Measurability? I think the only defensible way is to do a semi-formal polling of Real estate brokers and appraisers to ask them what their opinion is..or ask homeowner who live near junkyards..Ask them if they think their own property will sell for less and how much. I would poll 10 - 20.

I will bet you come up with an estimate of 10 - 25% discount for selling within 6 mo.

Ter

 

[Restrain]

You might take a quick look at other intersections in the general area that are similar and see what the uses are. That might give you guidance as to the use for the subject.

 

[Caterina Platt]

Highest and Best Use= trailer park. :lol:

Seriously, though. Your area sounds a bit like mine. Ross has the right idea. Look for sales near a dairy, sewage disposal plant, abut highways and light commercial, anything outside of your finer restricted residential developments. Also, look for vacant land sales in the immediate area that have taken place since the junk yard has been in existance. (or if none exist, try looking for sales that also abut undesireable examples above) Compare those land sales to those without the ugly/smelly/noisy neighbor in the same time period. Viola! Your adjustment for external depreciation.

I have one of those lovelys about a mile from me. Like your area, we didn't have zoning until 1991. The original land owner sold off the property with no concern over what would develop. Nearby are what could have been prime irrigated residential sites. What developed in that area has turned out to be a real eye sore. Delapidated trailer park, junk yard, abandoned, run down homes.... a real shame.

 

[Tim The Enchanter]

Echo - look for comps with similar level of external ob. Industrial adjacent? major traffic? You'll be lucky if you have a junkyard adjacent comp, much less the same junkyard. Echo off. :lol:

This property needs a buyer who is a gearhead, and would love to be close to the junkyard. Talk about a small specialized pool of potential buyers. :lol:

good luck. 8)