Valuing un-buildable land

[bodenstein]

I've been asked to appraise a parcel of land that is a proposed conservation easement of approximately 14.5 acres surrounding an approved commercial development. The owner wants to donate the site to the township for tax purposes, and the township is agreeable to receiving it. The site consists primarily of wetlands and wetlands buffers, and is a narrow meandering configuration with virtually no development capacity on a stand alone basis. I am unsure how to approach this valuation and tempted to just pass on it, but it was a referral from a valued contact, so we would like to be of service, if possible. Any advice/guidance would be much appreciated.

 

[Tom D]

Don't forget to take off the 100 year maintenance cost of unusable ground. I don't want it, give it them. Same with this appraisal.

 

[TerryRohrer]

Short of finding data, there is no credible or reliable way to accomplish the task (other than flat out guessing). I wouldn't want to do that when IRS scrutiny is in the cards. You might find the following thread useful.

Post in thread 'Land Appraisal for Charitable Donation'

Jun 24, 2024

First, be careful. This type of assignment puts you in the IRS's crosshairs along with the owner.

If you find nothing locally, you can look anywhere for unbuildable tracts (terrian, flood, etc) and compare those to buildable tracts in their area to develop a discount percentage that can be applied to local to your subject, buildable comps. Some will argue (often just for the sake of arguing), but I don't feel bound by any time or geographic restrictions when looking for such data. Toward that end, I could provide you one pair (my own transaction) and know of another.

Again, others will...

• TerryRohrer

• 

 

[bodenstein]

Thank you. I appreciate the cautionary advice!

 

[JTip]

https://www.nrcs.usda.gov/programs-initiatives/wetland-mitigation-banking-program

Did one years ago, yes yes under a CG, I did 99% of the work and the CG signed it, the land has value albeit not much.

 

[Terrel L. Shields]

but it was a referral from a valued contact, so we would like to be of service, if possible. Any advice/guidance would be much appreciated.

Do these occasionally. Just use land comps from other conservation parcels. Check for Nature Conservancy as a buyer, or a Land Trust - these are your comps.

 

[Tom D]

Do a mental test run. Pretend you're standing in from of the state board, or irs. Please give us the wrong data that you used to determine this value. And your answer would be?

Why risk any potential liability for what small fee you are getting. Once the state has you, they will find little mistakes in your report to fine you to death.

 

[KHS445]

Competency Rule: Mandates that appraisers possess the knowledge and experience to complete an assignment competently or disclose the lack of expertise.

Do you meet this standard? If not what will you do to become competent?

I would strongly recommend finding some one who competent and then work with them on completing the assignment. It will probably be more of an educational experience than a profitable assignment.

 

[Zoe]

Could you hunt or fish on it? What about wildlife refuge? I don't know. Government owns some wildlife refuge land. It is there to serve wildlife. I don't think you can hunt or fish on some of them. I don't know about sight seeing or something.

Sometimes the highest and best use of a property is to hold it. The owner probably don't want to pay taxes on it anymore. I don't know if the city might be able to improve it as a visual improvement to the area. Like green space the City owns.

Like a city park maybe. If all that is there is walking paths and benches, they don't care if it floods. If it is all under water, then maybe clean it up some and have a nice water view for the City.

Water don't really hurt like a nature park if a big rain comes or something. It will drain off after the big rain leaves.

 

[Zoe]

Like Tennessee Valley Authority owns certain easements and you are not supposed to touch anything on the easement without TVA approval. Who owns the easement?