Vacant Land USPAP Question

[Judy Whitehead (Florida)]

OK - perhaps I am the one with a mental block today. Using the recommended vacant land form, and to appraise vacant lots, is the appraisal a "limited" appraisal report, or a "summary" appraisal report?

The USPAP guidelines state that two approaches to value must be used to comply with the summary report guidelines. Of course a cost approach and a rental income approach are not considered in a vacant land appraisal.

What do you all identify your vacant site appraisals as?

 

[wyecoyote]

Judy,

My take on Vacant Land Appraisals. Since the Cost approach is not applicable you are not departing and typically the income approach is not applicable because most people do not rent vacant land (assuming for residential purposes) their may be cases of Leased land in commercial situations. Therefore, you are not departing from any of the applicable approaches to value and if you are not departing from anything else in standards 1 or 2 you are doing a "Complete Appraisal".

The content of the Report is up to you but IMHO the Vacant Land appraisal Report is that said report is a "Complete Appraisal Summary Report". Perhaps some other USPAP Guru will state differently.

The USPAP guidelines state that two approaches to value must be used to comply with the summary report guidelines.

I do not read this anywhere in USPAP Standards Rule 2-2 (B) unless I am seriously missing something here?

Look forward to others comments on this.

Ryan 8O

 

[Wally Jones]

Hi Judy!

I agree with Ryan. Income and cost approaches don't tyically apply, therefore, no departure.

I believe USPAP says we need to CONSIDER all the applicable approaches to value and then USE the ones that may apply. In this case, only one approach is relevant.


Wally <----- not a USPAP guru 8)

 

[Judy Whitehead (Florida)]

You both are absolutely right. I guess when your "mentor" trains you that you "must" have two approches to value in your file, then you tend to have that stick in your mind - i.e. do a cost approach for a 2055 even though you don't report it on the form.

I just re-read Standards 2-2 regarding a Summary Report and it does state that the information provided is sufficient for the client and intended users to adequatley understand the rationale for the opinion and conclusions. (when summarizing). For some reason this two approach thingy keeps sticking in my mine.....then my co-worker asked me the vacant land question this morning...oh well. Thanks, guys!