Unique Private Lake property valuation justification

[Craig in Oregon]

Privacy, rarity, exclusivity

terrific real property attributes
but nasty appraisal units of comparison to support with recent market evidence

I'm thinking high(er) rollers and/or a corporate, family, religious, affinity group, fraternal retreat,

Maybe a group of flush Subaru execs from LaFayette?

Best wishes

 

[Webbed Feet]

If there was a higher and better use (i.e. an "enjoyment stop" for the public) one would think they would have sold the property already.

<....snip.....>

With the current market conditions, why would one think that?

 

[Lake Lizton]

I had the realtor check average days on market for 2011 sales and active listings for values $300k-$450k, average days for sold properties - 161. Average days for active listings - 161 days. Our house is listed at 156 days. We had it on FSBO, and still do, but the realtor has had it the shorter period. One home has been listed for over 450 days. I know of another lake property within 10 miles that has been listed for over 2 years.
We have had a couple of freinds recently say they would buy it in a heartbeat if they had more faith in the economy, which I think is our root problem.

 

[Mark K]

I checked out the county website and found the aerial map of your property. Your lake is, in all likelyhood, what's known as a "borrow pit", dug when they built the CR 200 W overpass over I-74. This also means that you are located approximately 100 yards from the interstate highway. The noise from the highway could be the cause of some of the market resistance. It won't bother some folks at all and others will not consider purchasing it.

I've driven past your property on many occasions and agree; you have a very attractive property. Its location is a drawback for some potential buyers. Your asking price is significantly above the local average and right now, homes in the rural areas are experiencing very extended marketing times.

It takes a special buyer for a property such as yours and these buyers are few and far between today.

Lake property - special buyer needed.
Near I-74 - limited market
Contemporary/stone design - again, special buyer
In the country - special buyer

Combine these things in conjunction with the price being 2-3 times the average results in a difficult to sell property.

I say these things because I owned a real estate brokerage in Plainfield before getting into the appraisal business. All of those things mentioned above limit the potential buyers. I don't mean to offend so don't take what I've said the wrong way. We appraisers can be painfully objective. I'd love your house but I'm happy living about 15 miles south of you on my own 5 acres.

I don't know about the asking price or property value but if its priced right, it will still probably take 1-2 years to sell. Another thing I found in my selling days was that, in your area, if someone wanted 6-7 acres it was so they could raise a few cows or horses. You have 5 ac. of water (or ice), again limited appeal.

Good luck on it; I wish I was in the market because its something that would interest me. I'm familiar with many/most of this type of property that has sold in Hendricks Co. in the past few years and you're right; there are no good comps.

 

[stangtime]

I checked out the county website and found the aerial map of your property. Your lake is, in all likelyhood, what's known as a "borrow pit", dug when they built the CR 200 W overpass over I-74. This also means that you are located approximately 100 yards from the interstate highway. The noise from the highway could be the cause of some of the market resistance. It won't bother some folks at all and others will not consider purchasing it.

I've driven past your property on many occasions and agree; you have a very attractive property. Its location is a drawback for some potential buyers. Your asking price is significantly above the local average and right now, homes in the rural areas are experiencing very extended marketing times.

It takes a special buyer for a property such as yours and these buyers are few and far between today.

Lake property - special buyer needed.
Near I-74 - limited market
Contemporary/stone design - again, special buyer
In the country - special buyer

Combine these things in conjunction with the price being 2-3 times the average results in a difficult to sell property.

I say these things because I owned a real estate brokerage in Plainfield before getting into the appraisal business. All of those things mentioned above limit the potential buyers. I don't mean to offend so don't take what I've said the wrong way. We appraisers can be painfully objective. I'd love your house but I'm happy living about 15 miles south of you on my own 5 acres.

I don't know about the asking price or property value but if its priced right, it will still probably take 1-2 years to sell. Another thing I found in my selling days was that, in your area, if someone wanted 6-7 acres it was so they could raise a few cows or horses. You have 5 ac. of water (or ice), again limited appeal.

Good luck on it; I wish I was in the market because its something that would interest me. I'm familiar with many/most of this type of property that has sold in Hendricks Co. in the past few years and you're right; there are no good comps.

This is exactly why local appraisers are hired. Very well written response. I'd hire you in a heartbeat.

Dan

 

[Lake Lizton]

Mark K - No offence taken for good information. Glad to hear your opinion on sales time and, unfortunately, that you agree there are no good comps in the area. We really are trying to sell a lake with house, not a house with a lake. It will take a special buyer for the property, just as it was what we were looking for 20 years ago.
We hired an appraiser in December 2009 that specialized in unique properties. Winter is not the most auspicious time to appraise ours, but we did use his value to price the property. There are other homes for sale in NW Hendricks County in the same price range as ours. There is even one 3 bed, 2.5 bath on 3 acres in Pittsboro that is asking $10,000 more than ours. So we are not completely out of the ballpark on price. The house next to us appraised at $700,000, so we’re not the most expensive in the neighborhood, either.
The lake is a borrow pit from the early ‘60s when I-74 was put in. It is 29’ deep on the north end and about 15’ on the south with 6-7 springs feeding it. Because I-74 runs at an angle to the property, we are a little further than the norm on borrow pits. The highway traffic isn’t visible, the noise isn’t offensive, but it is there.
We own the adjacent farmhouse and barns on the 3.1 acres to the north, and the adjacent 2.27 acres of farm ground to the south. We’d like to sell all of it, but the primary house and lake are the first priority. We feel it would be a mistake to sell either of the others first. If someone is looking for additional acreage for animals or workshop, it is available. We tried once to list the entire 12.27 acres, lake, both houses, detached garage and 2 barns as one listing, but that didn’t work out well. We were told it was because of MIBOR/MLS rules about not being able to list multiple legal descriptions. We originally listed the property with the additional 2.27 acres of farm ground, but dropped it to the 6.9 acres to a) lower the asking price and b) because most banks would not write a mortgage on 3 parcels of land, just the one the house sits on.
The realtor has us on lakehouse.com. I have us on indianasportsman.com to attract the fishermen and pwctoday.com for the jet skiers. We get lots of hits. Additionally, we put up signs on I-74, SR-39, 136 and on the property. This gives us a lot of drive by traffic. I’d like a way to target people who are also looking at Eagle Creek, or retirees, since the house is one level and little maintenance. The realtors are reluctant to advertise in print.
Thanks for the information from everyone. It is appreciated.

 

[Lake Lizton]

Question - the appraisal we had done was in December 2009. How do I find out, in general, if values have increased, decreased or stayed relatively the same since that time for my area?

 

[Mark K]

Question - the appraisal we had done was in December 2009. How do I find out, in general, if values have increased, decreased or stayed relatively the same since that time for my area?

In general, values have stayed relatively flat in your area, possibly dropped a bit but not dramatically, since Dec. 2009 . The big drop was from early 2007 thru 2009.

Your problem today is not falling prices as much as the steadily decreasing number of potential buyers. Additionally, unique properties are difficult to sell in good times; in bad times, its more than difficult.

 

[Lake Lizton]

Thanks for the info. We had been discussing our situation with an friend who is a realtor in Arizona, and she was the one who questioned if we should have another appraisal done, or if the valuation from December '09 was relatively accurate. Since we thought the appraisal was a bit low to begin with, and we have the property priced at his appraisal, I can report back to her that we should be safely priced.
We figured it would sell very quickly, or take a long time. Unfortunately, we get to wait for the right fisherman or jet skier to come along.

 

[Tim The Enchanter]

Nice looking place. I wish California prices were remotely close.

Sounds like your marketing efforts have been more than enough.
If you need or really want to move the place, apparently you'll need to cut the price. I hope you can afford and don't mind waiting.

I don't see what good another appraisal will do you at this point. Your listing history is a good indicator that it's maybe not worth as much as the list price. If you find a buyer their lender may want an appraisal, but you won't have to pay for it.

As for appraising it, I don't know Indy, but you if there are no good local comps even in the last 2, 3, even 5 years or so, I'd think the search for something similar in a different area would be in order. Maybe in a ring around Indy, maybe just the adjoining counties to yours will find enough.

That's where local knowledge comes in, and it sounds like Mark K had a very good response for you. Good luck.