Vacant Land Appraisal

[JEFF HERUTH]

I have a new customer that was inquering if I could do a vacant land appraisal, and for how much? I have never done a vacent land appraisal for the 2 years I was with my supervisor appraser. I need some help and advice before asking any questions to my old supervisor.
Any avice what be greatly appreciated, because I want to informed enought to be able to take on this job.
The guy explained to me that he bought a vacent unimproved lot (abouth 4 acres) that he is dividing up into sixteen lots. Half of the lots he is gifting out to the city habitat.. or something. the rest has been being improverd with city water, electricity etc.
questions I should know:

1. What form do you use?
2. How much to charge
3. How many different appraisals to do ( the whole subdivision, each lot, half and the half gifted)?
4. what to take note of during the inspection?
5. What are good comp guidlines, and adjustments?

Please reply with only information that will help become informed enough to take on these new assignments.

 

[Pamela Crowley (Florida)]

Jeff,

Sometimes - or even very often - a vacant land appraisal is/can be much more difficult than most SFRs.

My #1 questions to you are who is the client and why do they want this?

 

[Restrain]

Sounds like a complex appraisal, definitely more than a lot appraisal. As to what to charge, it's your business, your fee.

Set down and define the problem with the client. Find out exactly what they want and that will define what you need to appraise. As to what to note, it's just like a residential appraisal. Neighborhood, utiilties, trends in the area, topography of the site, any landscaping or fencing, etc. Then look at your HBU analysis. You may be doing a residential lot, land for future development, or a commercial site. Each of which will be analyzed differently.

Look at your site analysis section on your appraisal books.

Roger

 

[Mark K]

This is a project, not merely an appraisal. Also, subdivision analysis appraisals in many states are restricted to appraisers with commercial licenses, for good reason. Check the regs to see if you can legally perform this type before spending anymore time.

This is not a good place to start with vacant land appraising.

 

[Pamela Crowley (Florida)]

Originally posted by Mark Keutzer@Jun 18 2004, 04:11 PM
This is a project, not merely an appraisal. Also, subdivision analysis appraisals in many states are restricted to appraisers with commercial licenses, for good reason. Check the regs to see if you can legally perform this type before spending anymore time.

This is not a good place to start with vacant land appraising.

In Florida, you had better have your Certified General license to do this.

 

[Chris Colston]

From your description, this sounds too complex for a residential appraiser, especially one who never did one with their supervisor. This sounds like it will involve a feasibility study and subdivision analysis. It's going to involve conversations with planning and zoning and finding out the value of the land as a whole and then each individual lot (which is NOT the whole divided by 16). You need a commercial appraiser to mentor you on this one. The form will probably be narrative.

PS....you will need a really good spell checker, too.

 

[Randy Beigh]

This is an example of what's wrong with the training of appraisers in this country. Jeff, what I am about to say is not an indictment on you, but your trainer, who probably didn't know any better. Nobody taught him to be a teacher.

How can anyone be appraising with the license/certification and not know how to do all the types of residential appraising out there? It is wrong to send someone to take his test without having done vacant land, condos, 2-4's and whatever else residential appraisers do.

Now that I'm done ranting, I will try to answer the questions.

I wouldn't do this assignment, as from my perspective, this is a commercial project. You have whole lot of things to do dealing with, highest and best use, and build out times, just being 2 of them.

You could appraise the individual lots after they are completed and you could appraise the 4 acre parcel in its "as is" state, but the commercial project would best be turned over to somebody with the knowledge and experience.

If you want to do it, then you need to associate yourself with someone with that experience and license and they would sign off with you. That helps get you the experience you need.

I would not use a form. Well, maybe there is a commercial form, but I don't know what that is. I would do a narrative.

The residential form for vacant land should be in your software package and should be titled something along the lines of "Vacant land form". It is a very old form and was made long before any of us knew how to spell USPAP, so you will have to update it with addendums.

 

[Otis Key]

Originally posted by JEFF HERUTH@Jun 18 2004, 02:43 PM
I have never done a vacent land appraisal for the 2 years I was with my supervisor appraser. I need some help and advice before asking any questions to my old supervisor.
Any avice what be greatly appreciated, because I want to informed enought to be able to take on this job.
The guy explained to me that he bought a vacent unimproved lot (abouth 4 acres) that he is dividing up into sixteen lots. Half of the lots he is gifting out to the city habitat.. or something. the rest has been being improverd with city water, electricity etc.

Okay Jeff - go back to USPAP - right behind the Definitions and several other sections is the first answer/question:

COMPETENCY RULE

You already stated that you haven't done and don't know - so be careful.

Next one is in your own question: He's subdividing and developing. That exceeds most qualifications of residential appraisers. That should be referred to a commercial certified appraiser - maybe one you could work with to learn a little bit about what and how to do it. You might have to do some freebie stuff but it's an excellent learning experience.

Good luck - don't get yourself into trouble by taking on something you don't know how to do.

 

[George Hatch]

Please don't take it the wrong way, but this assignment is way beyond the technical competency of most residential appraisers. It's beyond the competency of some commercial appraisers, too. This assignment is not about a piece of dirt, it's about the development potential. That's the thing about land - it's always about potential. Just identifying exactly what the property itself is all about will require more research than you've probably ever done on any project thus far.

Seriously, you should pass on this. You'll make more money by just sticking with what you already know. There are several issues at play in this assignment and you don't have the depth on these issues to adequately deal with them. Some fees just aren't worth earning.

 

[Mountain Man]

Agree with the others..... it's a very complex job. You will be dealing with a subdivision appraisal which entails things like the cost of development, analyzing municipal requirements, developing an adsorption rate analysis, discounting a projected cash flow, etc. The last one I had the privilege of assisting on took 3 months, and was not a cheap job. $XX,zzz.