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Vacant land question

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Aletheia

Thread Starter
Freshman Member
Joined
Feb 29, 2008
Professional Status
Licensed Appraiser
State
Indiana
While researching a order, public records has 8 of the 9+ acres as tillable crop land, it looks like the residence is a finished pole barn, with the the majority of the land being farmland, does this need to be a commercial appraisal? I havent ran into this before and I would appreciate all comments. Thanks
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
While researching a order, public records has 8 of the 9+ acres as tillable crop land, it looks like the residence is a finished pole barn, with the the majority of the land being farmland, does this need to be a commercial appraisal? I havent ran into this before and I would appreciate all comments. Thanks

I'm no farmer, but 8-9 acres of ag. land doesn't sound like an economically feasible lot for any commercial harvesting of legal crops. :) If an ag. use exists on-site, then that must be disclosed in the appraisal- whether it has any meaningful value influence is up to you to determine.

Here's my advice: It sounds to me like you have an HBU to determine first. Once you do that, then find out if there is anything being grown on the land. If the HBU is residential and there is some ag. application being done on the site, I'd call my client and let them know before going any further. One thing for sure: If there is a non-residential/ag. use occurring on site, I'd disclose it in my report.

Good luck!
 

stefan olafson

Senior Member
Joined
Apr 2, 2003
Professional Status
Certified General Appraiser
State
North Dakota
Trust Denis on this one. I'm not sure what you mean by a finished pole barn? Is that in fact the residence? They you probably have an assignment you don't want to get too far into before you request a meeting with your client and discuss the appraisal problem and increase the fee.
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
What is your assignment? To do an "as is" appraisal?

What is it currently being used as? Farm? Industrial? Residential? Commercial?

If it is being used as residential, then appraise it as such.

Nobody is going to make a living off of 8 acres of tillable land. What that means is that the trees and stumps were removed at some time in the past and the swamp drained before the tree huggers found out about it.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Do not get confused with tax assessments vs. Highest and Best Use. Such assessments are often used for ag assessments, etc to reduce taxes. In Texas, it is common for a 10 acre site to have 9 acres in some form of ag exemption, and 1 acre for the homesite. Cuts the assessments tremendously.

Look at the highest and best use of the property. Legally allowable, economically feasible, returning the highest income to the property. In this case, unless the property is used for a high-intensity truck garden operation, the H&B use will be most likely for single family residential (hobby-ranch), non-commercial.
 

Terrel L. Shields

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Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Is it a barn? or is it a residence? What is the dominate portion of the estate? The land? The barn? If the land then its a land appraisal with a barn on it. If the 'barn' that costs $300,000 and includes a living quarters, its a SF residence. It is not commercial unless its an Auction Barn, Barn Dance Hall, or some retail/commercial utility.
 

Mike Boyd

Elite Member
Joined
Jan 18, 2002
Professional Status
Retired Appraiser
State
California
Is it a barn? or is it a residence? What is the dominate portion of the estate? The land? The barn? If the land then its a land appraisal with a barn on it. If the 'barn' that costs $300,000 and includes a living quarters, its a SF residence. It is not commercial unless its an Auction Barn, Barn Dance Hall, or some retail/commercial utility.

A stable for horses, milking stalls for cows, shearing station for sheep, "open range" for chickens, etc. etc. etc.
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
Is it a barn? or is it a residence? What is the dominate portion of the estate? The land? The barn? If the land then its a land appraisal with a barn on it. If the 'barn' that costs $300,000 and includes a living quarters, its a SF residence. It is not commercial unless its an Auction Barn, Barn Dance Hall, or some retail/commercial utility.
Sounds like one I'm working on right now. It's 76 x 160 pole construction with enclosed riding stable, 8 box stalls, 4 standing stalls, workshop, bath, tack room, exercise room and very nice 1800 SF 6/3/2 living quarters on the upper level.

Thankfully, it's for a portfolio loan. Not a comp within 150 miles.
 

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