Unique Private Lake property valuation justification

[Lake Lizton]

Before we put our house on the market, we had it professionally appraised by a certified appraiser who specializes in unique properties to establish current market value. We, and our friends who use the lake, thought it was low, but we understand these are difficult times. This property has always been a 'problem' to appraise because we are rural and there are no equivalent comps, ever.
We have a pristine 5 acre multiple spring fed lake on 6.9 acres with a 3 bed, 2.5 bath lodge style home. We only use copper sulfate, a safe mineral used to clean water pipes and prevent algae to keep the pond in it's healty state for about $300 on an annual basis. We own the adjoining properties on 2 sides which we will offer to the buyer, wooded neighbor who is not visible on the third, and road frontage on the fourth side. We are approximately 22 miles from a major metropolitan city.
I read that waterfrontage, proximity and water quality impacts the value of the property. Is there any documentation I can cite to the real estate agents and future appraisers the banks might choose of standards or percentages of increased vaule for our property's assets?
Our tax assessments do not differentiate between excess homesite acreage and water acreage, so I get beat up from the buyer's realtors when they comp assessed value.
I know of only 2 private lakes of our size or larger in the entire county. We jet ski on the lake, eat the fish from the lake and irrigate the garden from the lake. Most private ponds in the area are 1 acre or less and have weed and algae problems so they are ugly or require thousands of dollars of chemicals to maintain. Ours is the only property where the home is on the water's edge. Most of the large lakes and reservoirs are so far away that they can't be used as comps.
Our position is that we are selling a 5 acre lake that also has a house, whereas the realtors and appraisers are looking at it as a house with a lake.
If you could give me some professional guidelines, standards or any help to support or property value, it would be much appreciated.
It is listed with a realtor and at:
http://www.forsalebyowner.com/listing/217D1

 

[CANative]

Sounds sort of like a property I appraised 5 or 6 years ago in Northern California. Except it had about 200 acres with a private like like yours.

Very, very difficult to appraise. I reasoned that this private lake was large enough to attract buyers interested in lakefront properties and used those types of sales as comparable properties.

I was nervous about my opinion of value because I knew the lender and property owner might be disappointed (they were thinking $2.5 million and I was at $2 million). About a year later the property sold for $1.75 million.

 

[dobie]

Before we put our house on the market, we had it professionally appraised by a certified appraiser who specializes in unique properties to establish current market value. We, and our friends who use the lake, thought it was low, but we understand these are difficult times. This property has always been a 'problem' to appraise because we are rural and there are no equivalent comps, ever.
We have a pristine 5 acre multiple spring fed lake on 6.9 acres with a 3 bed, 2.5 bath lodge style home. We only use copper sulfate, a safe mineral used to clean water pipes and prevent algae to keep the pond in it's healty state for about $300 on an annual basis. We own the adjoining properties on 2 sides which we will offer to the buyer, wooded neighbor who is not visible on the third, and road frontage on the fourth side. We are approximately 22 miles from a major metropolitan city.
I read that waterfrontage, proximity and water quality impacts the value of the property. Is there any documentation I can cite to the real estate agents and future appraisers the banks might choose of standards or percentages of increased vaule for our property's assets?
Our tax assessments do not differentiate between excess homesite acreage and water acreage, so I get beat up from the buyer's realtors when they comp assessed value.
I know of only 2 private lakes of our size or larger in the entire county. We jet ski on the lake, eat the fish from the lake and irrigate the garden from the lake. Most private ponds in the area are 1 acre or less and have weed and algae problems so they are ugly or require thousands of dollars of chemicals to maintain. Ours is the only property where the home is on the water's edge. Most of the large lakes and reservoirs are so far away that they can't be used as comps.
Our position is that we are selling a 5 acre lake that also has a house, whereas the realtors and appraisers are looking at it as a house with a lake.
If you could give me some professional guidelines, standards or any help to support or property value, it would be much appreciated.
It is listed with a realtor and at:
http://www.forsalebyowner.com/listing/217D1

You don't say whether the appraiser used any lakefront comps or not and if not did they make any adjustment for the lake front location.

From the pictures it appears to a very attractive location. I would think that some adjustment would be warranted but then again I don't know the market.

Good luck

 

[CANative]

I didn't even see the link the OP posted.

$399,900? OMG. That seems like a steal. Beautiful property.

 

[Lake Lizton]

Indiana is not a high dollar real estate market. We have million $+ homes on Geist and Morse reservoirs, and in the Carmel area, but west of Indy is forgotten territory. We are lucky our property taxes don't include the value of the water, so we pay less than $3000 a year.
I just want some kind of references I can point to when bank appraisal time comes, so it doesn't get compared to the average 3 bed/2.5 bath home that sells for $101,500 around here. We do have a $700,000 house next door, so we aren't the most expensive in the area.
When we applied for a home equity line of credit last year the appraiser drove by and said yes the house exists, and yes it would be worth at least the $256,000 it is tax assessed at. I don't want that to happen again, either.

 

[AnonApprsr]

An appraisal is an opinion. Some times an opinion is based on nothing more than intuition. That does not mean a lender/bank will lend money based on that opinion. It is not necessary for someone to borrow money to buy something, keep that in mind.

 

[Webbed Feet]

I'd find a buyer with a large down and then carry the paper myself on a loan for the remainder.... that way I'd tell the banks/lenders and their bozos masquerading as real estate appraisers to sod off. I doubt there is one out of a thousand real estate appraisers actually qualified for such an assignment. ... my way of a compliment to one of the other posters...

 

[stangtime]

Location, location, location. $399,900? - not around here.

Beautiful place there.

Dan

 

[Lake Lizton]

Dobie asked if the original appraiser used lakefront comps, and the answer is no. I just reviewed the appraisal again, and the closest he came was to using a creek and a frogpond. He only made adjustments for size and age of comp houses, and lot size. And he went back 18 months to find those comps within a 10 mile radius. Unfortunately, he appraised it in December, which was when it is least appealing.
Our closest waterfront area is Eagle Creek Reservoir, which is in the next county, and approximately 16 miles away. It is closer to downtown Indianapolis, which would be a plus for it. It only allows kayaks, rowboats, sailboats and pontoon boats with under 10 horsepower motors. In comparison, our water would not be appropriate for sailboats, but we have a jet ski course, and jet skis are not allowed on Eagle Creek, so we make up for it.
Houses with waterfrontage on Eagle Creek sell for twice as much as equivalent homes one street back from the water. Most of those houses are 2-3 times the size of ours, so using them as comps would be tough. Using the waterfront vs. neighborhood statistics helps though.
Webbed Feet - in a perfect world, I would find a cash buyer or one with a hefty down payment and carry the note. But we've been trying to sell this for a year, and have not had a single offer.
Thanks for all of your input. We appreciate the information.

 

[CANative]

You might need to market the property with a company that has a nationwide clientele (like Sotheby's). Perhaps lower the offering to a point where you get a bidding war which may result in an offer than the current list price.

This seems like a good second home for a person of means who might not live locally.