Valuing un-buildable land

[JTip]

Thanks for this! This is the most concrete information I've found. That said, I'm still inclined to pass on the assignment

LOL! Nothing concrete about AI. I wouldn't sacrifice the cert on that data.

Mark K nailed it above. It is an 'easement' and the land owner retains the underlying ownership.

We deal with easements and donations at the DOT. Donations typically show minimal values, ie small takes or low worth land (floodway/floodzone) and are transferred with a single piece of paper. The cost of the appraisal is more than the land is worth, and simply closed with a handshake, thank you, and deed. The donation is a way to save on processing the transfer; no need for an appraisal, no required negotiations, just a simple 'here you go', no more tax burden for the seller and the municipality gets to maintain it. Spending $xxxx to receive a $zzz write off isn't logical.

I put the land bank link up earlier as this is a good use for similar properties (not easement sales). There are sales out there, find them and you can get an idea of potential unit values.

 

[KHS445]

How do you do your first appraisal for anything if "experience" is required? Only FNMA requires experience and who wants to work for them, really?

Take it up with the authors of USPAP.

 

[Elliott]

I'd suggest calling your local/state environmental groups since they frequently 'receive' land donations. In my area, if its wetland it can be mitigated for other wetland. In the Portland area an acre might be worth $100,000, while out in the sticks only $2,000. Funny stuff that land donation stuff.

Want to talk about donating a house to a fire department for a practice burn? : )

 

[Terrel L. Shields]

Take it up with the authors of USPAP.

Actually, they do not require experience. They require you to gain competency via education or working with those who are experienced.

 

[Terrel L. Shields]

I doubt a client would approve for this type of assignment

These are not complex assignments. The HBU is conservation. Find comps with the same conservation issues.

a stand alone basis. I am unsure how to approach this valuation

The issue is are you asked to value an EASEMENT? Or a property encumbered with an easement? If valuing the whole, just find comps that are candidates for easements or were sold with an easement. And who is the client? Private? Bank? A highway or ROW taking?

 

[Mark K]

These are not complex assignments. The HBU is conservation. Find comps with the same conservation issues.

The issue is are you asked to value an EASEMENT? Or a property encumbered with an easement? If valuing the whole, just find comps that are candidates for easements or were sold with an easement. And who is the client? Private? Bank? A highway or ROW taking?

If you put some thought into the assignment, this and others similar are not that complicated or difficult. I don't understand the reluctance of some appraisers to reject these. I picked up quite a few good, long-term clients over the years because I was willing to take the time to learn or get the assistance needed to complete them when other appraisers ran away . Completing this and similar atypical assignments is what helps an appraiser wean themselves away from mortgage appraising.

We deal with easements and donations at the DOT. Donations typically show minimal values, ie small takes or low worth land (floodway/floodzone) and are transferred with a single piece of paper. The cost of the appraisal is more than the land is worth, and simply closed with a handshake, thank you, and deed.

They don't allow that in this state, luckily. LOL! I can't tell you how many times my appraisal fee exceeded the landowner's compensation. I think my smallest parcel appraised was 37 s.ft. of ag. land; compensation for quite a few was less than $500, my fee was about 2X that amount. I loved those.

Designers/engineers like to draw straight lines when a bit of a jog in the line could save thousands; they don't care, its only taxpayer $$.

 

[JTip]

If you put some thought into the assignment, this and others similar are not that complicated or difficult. I don't understand the reluctance of some appraisers to reject these. I picked up quite a few good, long-term clients over the years because I was willing to take the time to learn or get the assistance needed to complete them when other appraisers ran away . Completing this and similar atypical assignments is what helps an appraiser wean themselves away from mortgage appraising.



They don't allow that in this state, luckily. LOL! I can't tell you how many times my appraisal fee exceeded the landowner's compensation. I think my smallest parcel appraised was 37 s.ft. of ag. land; compensation for quite a few was less than $500, my fee was about 2X that amount. I loved those.

Designers/engineers like to draw straight lines when a bit of a jog in the line could save thousands; they don't care, its only taxpayer $$.

Donations are rare. Good example would be a municipal bridge project where the municipality owns the land, they would simply donate the land to the project. In PA any landowner can donate (land to a project) but when you can get a minimum of $500 they always take it.

 

[Charles Badell]

I worked on something similar recently. Designated wetland with a strict conservation easement on top in an area with no available wetland mitigation credits. CE said you could literally do nothing on the land, including you could not even walk on it. Plus you had to incur the cost of eradicating any evasive species. Concluded no value and HBU was to donate to a state or federal agency with the budget and mission of caring for such lands.

 

[Terrel L. Shields]

incur the cost of eradicating any evasive species.

What law forces that?

 

[Charles Badell]

If memory serves, it was in the easement.