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tentative tract

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Annelle

Thread Starter
Junior Member
Joined
Jan 26, 2004
Professional Status
Certified General Appraiser
State
Arizona
Hi, I've turned down this order primarily because 1)The owner/client only wanted to pay $500 for it and wanted it before the cashiers check would arrive 2) Getting intended use and user ( he really didn't want to tell me), and is apparently in litigation with partner suing for dissolution of joint biz and most importantly 3) I don't know how to do it, but could have gotten assistance, once I figured out more of what is needed to complete the job. I've talked to several people who had different theories.

So, having said, how would one do this job appropriately? It is a 19 acre parcel with a tentative tract map for 17 homes in a 2.5 acre min area. ( each lot has a 40,000sf minimum). It has a condition of 2 firehydrants from 2 directions (normal requirement here), is may be cost prohibitive in this case, althought I found one that might be 1/2 the distance- but unable so far to find who put it there, or where it is fed from. In any event I quit trying, since I declined the order. The local water district denied knowledge of it being there, and stated the proximal homes do not have pulbic water access--even though I saw a meter or two.

Since I was unable to find simlar vacant land comps with a tentative tract maps, would the next step be to look for simliar subdivision and do allocation with similar lot sizes to find the lot values ? Do an absortion study? Since it is not fully entitled, but I am pretty sure there would be a market reaction, what are the suggestions in case I run into something similar in the future. I.E How do I go about valuing it?

Please don't hesitate to ask questions, as I may have inadvertently omitted pertinent details.
 
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Artyman1200

Sophomore Member
Joined
Jun 21, 2004
Professional Status
Certified General Appraiser
State
Tennessee
Seems to me, it would be a hypothetical condition, and then do the best you could with the data available. Some kind of supportable adjustment would need to be made for the smaller than typical lot sizes. Support for making the adjustment could be an explanation of how market participants are requesting higher lot densities at county planning meetings, or something of that nature...
 

JT1974

Senior Member
Joined
Dec 16, 2006
Professional Status
Certified General Appraiser
State
Wisconsin
Sounds to me like you have a vacant 19-acre parcel and nothing more. Is the "tentative tract map" a proposed subdivision plat or is it an approved plat? We don't use the term "tentative tract map" here in Wisconsin so I may be missing something. However, from what I read it sounds like it's just another 19-acre tract with NO entitlements and the property owner is trying to get somebody to appraise it as if it is entitled.

Please clarify whether the parcel has an approved plat (i.e. paper lots).
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
Sounds like you may have a 19 acre tract with entitlements IF the lot division has been approved. This is sometimes a lenghty process and at least in my part of the country the "entitlements" to develompent have an additional value over and above just the land. The question is .. Is the "tentative" plat approved or just something they drew up? Answer that question and you have the answer as to how to do.
You still have the highest and best use issue regarding financially feasible but that is separate from how to appraise the property.
 

Annelle

Thread Starter
Junior Member
Joined
Jan 26, 2004
Professional Status
Certified General Appraiser
State
Arizona
Here, it means the owner spent about $100K + to get the county to approve the 17 lots (40,000 sf ft each) with a number of conditions to be met first. Once the conditions have been met (primary one is the 2 firehydrants per the fire marshal), then they have gained entitlement. The owner told me their engineers estimated it at $800K to met the firehydrant conditions, and it doesn't pencil out for them. Since I didn't see the information, I cannot verify that, but as I had mentioned before, I think I found a source much closer. That may affect the H & B U.

Naturally if I could have found similar properties, (expecially with the same distance for water access) then that would have given me a market reaction, and the job would have been much simplier. Since that is not the case, I wasn't sure where to start.

The market does show, tracts that have been recorded have a substancial value difference, so the value must be somewhere in between, unless with the conditions for approval at the present time make it finacially unfeasible, and then the current H & B U might be something entirely different. I think the game plan was to sell the individual lots off once entitlement/recording was finally approved.
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
Here, it means the owner spent about $100K + to get the county to approve the 17 lots (40,000 sf ft each) with a number of conditions to be met first. Once the conditions have been met (primary one is the 2 firehydrants per the fire marshal), then they have gained entitlement. The owner told me their engineers estimated it at $800K to met the firehydrant conditions, and it doesn't pencil out for them. Since I didn't see the information, I cannot verify that, but as I had mentioned before, I think I found a source much closer. That may affect the H & B U.

Naturally if I could have found similar properties, (expecially with the same distance for water access) then that would have given me a market reaction, and the job would have been much simplier. Since that is not the case, I wasn't sure where to start.

The market does show, tracts that have been recorded have a substancial value difference, so the value must be somewhere in between, unless with the conditions for approval at the present time make it finacially unfeasible, and then the current H & B U might be something entirely different. I think the game plan was to sell the individual lots off once entitlement/recording was finally approved.


If its a financially feasible issue then its a highets and best use issue. You may only have a vacant tract as of this time.
 

Vernon Martin

Senior Member
Joined
Jun 8, 2005
Professional Status
Certified General Appraiser
State
California
You didn't mention where in SoCal it is, but I've observed that tentative tract maps are rapidly diminishing in value, particularly in the Inland Empire and Antelope Valley. So are final maps. This means that market data that we might ordinarily use is probably outdated by now.

I recently appraised such a property in Winchester, where paper lot comps were selling for $100,000 a lot in 2006, and asking prices are now $35,000 per lot, and no one is buying. When you consider that homebuilders are the likely buyers for such a property, their only motivation to buy would be to get a great deal and hold the land until the market recovers.

Maybe you could use an extraction method on recently sold subdivision homes to back into land value?
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
A $5000 fee assignment to me...especially if going to court.
 

Abester

Senior Member
Joined
Jun 12, 2003
Professional Status
Certified General Appraiser
State
Florida
Terrel is leaving some money on the table!!
 

JT1974

Senior Member
Joined
Dec 16, 2006
Professional Status
Certified General Appraiser
State
Wisconsin
I heard a guy on CNBC a couple of weeks ago saying his private equity firm was buying large tracts (thousands of acres) of fully entitled subdivisions in CA for 20 to 40 cents on the dollar from 2006 prices. I didn't catch the exact location but that goes to show just how much land values can change in a short period of time.
 
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