Trust Appraisal question.

[mjcrodgers]

Try to get an idea about how to go about this one. I'm doing a Date of Death appraisal for a lawyer. The house is legal/non conforming (per the city) due to siting on a 1/2 acre lot that is zoned R3 and is able to have apartments or condos there. There are no comps sitting on a simlar sized lot with the same zoning. There are apartments/condos all around it. It was purchased back in the 60's as two seperate lots. At some point the lots were combined under one APN # (atleast the what it seems like). The Mother has three kids. She left the hosue with its portion of the lot to one of them and the "vacant lot" to the other two. The lot is a nice flat square so it was easy to figure out the part she was reffering to. At first the Lawyer was asking for an Appraisal "in Theory" of the "vacant lot" as if it were seperate and on it's own APN, however now that I found out the zoning it seems like thats not a good idea. The idea is for the kid who got the house to buy out the other two based on the "in Theroy" value of the "vacant lot" If the "vacant lot" were seperate it would only be an R2 lot due to the width. The house is nothing special and I have seen other houses being sold as tare downs with the value in the lots, also there are two listing near buy with similar zoning/size that are listed at over a $1mil. If I were to appraise it as it stands with the house the value would be far less than that. I am thinking I should give them a DOD appraisal as it stands and a vacant lot appraisal minus the tare down cost to figure out how to go about buying eachother out. Sorry for the long post, I have only done a few DOD's so far and not sure if this will be an issue.

 

[The Warrior Monk]

I am not sure what the intended use is? You mention DOD as well as people buying each other out.

I assume this is going to the IRS. I don't think IRS allows for Value in Use in this case (I'd have to check the regs), so make sure that the property HBU analysis is done.

 

[Ray Miller]

Has zoning changed since DOD?

I would look to it as HBU at the DOD.

If it means teardown and sell lots for more money at DOD that is what it would be. If it means left standing and that was the HBU at DOD that is what it would be.

 

[Terrel L. Shields]

Value the whole property. Allocate values to the respective portions. Adding the two parcels appraised separately will not total the same number likely. That is summation.

Nothing to do with value in use.

 

[Lloyd Bonafide]

It sounds like a HBU question, but the improvements are probably not legal non-conforming, because SFRs are typically allowed in multi-family zones.

This appears to be a complex property. If you are not now certified, then you should be working with a Certified or General appraiser, or else decline the assignment.