Vacant lot behind house - no access

[chris moore]

I'm appraising a vacant lot behind a house in a residential area in a somewhat rural town. The improved properties range from $100,000 to $175,000. The vacant lot has a unique parcel number separate from the homestead. The zoning is agricultural; building a house would be legally permitted. Access to the lot (which is about an acre) would be by easement (which does not currently exist) through the borrower's property. Lots with road frontage are worth about $15,000-18,000.

I have several questions. First, do I consider the lot to have no access until an easement is granted? And, how much should I discount for lack of road frontage (no similar sales, of course). And I'm sure some of you smart appraisers have answers to questions I haven't even thought of yet.

 

[Pamela Crowley (Florida)]

Is there plenty of room on the front parcel to put in a driveway easement along one side?

If so, make the appraisal based on the hypothetical condition that this is complete and subject to the easement being legally completed and recorded. Determine exactly where this easement is going to be and explain it in your report.

Try to have at least 1 comp that has easement access. Go back in time and/or further in distance. Do your research to determine if there is a justifiable adjustment for this condition and what it would be.

 

[Verne Hebert]

Ditto.

I think Pam and I are related.

It will be a private road and utility easement--I'd spec it at 30 feet. So your site will be 1 acre gross and the net acreage will be less the area of the easement (example: 0.90 acres).

Place your hypothetical condition in the letter of transmittal and in the condition of appraisal, in bold.

Good Luck

 

[Karl]

The SECRET WORD being HYPOTHETICAL

 

[chris moore]

Thanks for the help. Glad ya'll are out there.

 

[Restrain]

Word of caution. Some communities do not allow for easement access. I would be sure that such an access would be allowable. Also, can the utilities be accessed to the rear site along the easement.

Roger

 

[Mike Garrett RAA]

We see these all the time in my market...commonly known as flag lots. My key question would be...who owns this lot? If it is the adjoining property...are they willing to grant an easement?

I have seldom found any appreciable difference in value for this type of building site. Privacy seems to over come the lack of street frontage. As my brother, the dean of residential appraisers in this market once said..."a building site is a building site". Don't try to tell that to the builders who are charging outragious "lot premiums" these days. Just remember each market is different and what applies here might not apply in your market.

 

[Blue1]

My 2 cents worth: Make your appraisal "subject to" adequate access via a legal easement......most "flag" lots in my area have an easment for access.