Weight of view on appraisal value?

[Terrel L. Shields]

It's just that I've never seen view adjustments or differences accounted for, especially with an SFR on a 1004, in the site area on the grid.

Both privacy and view are intangible property rights that can be improved via improvements.

So, you too don't adjust land value, right? I mean OK no problem with adjusting for "view" but if you are giving the LAND a higher price, then don't you have to be careful adding even more for view? Sounds more like waiting until you get semi-close then plug the valuation hole with an ephemeral adjustment.

Any view impact on land value itself is handed in the cost approach.

If it applies in the CA, then it applies in the SA - there is a line for site too, right?


My point is pretty simple. Land is the basis of the property and suffers no functional obsolescence. Improvements can suffer. So, what happens when the "view" is obstructed by the neighbor's new 3 story house? How do you measure that impact? It's unique to one property. How do you support that? The infamous "paired sale." - betcha ain't got more than one that is truly similar and more likely, its only vaguely similar. As for view, it seems easier for me to quantify the land value than it would be to quantify the nuances of "view."

On lake properties, here at least, many homes have a far superior "view" back from the lake than some of the lake front lots. But which sells higher? And why? Dockable or not? I mean docks are generally personal property but the right to have a dock is an attribute of the lot, not the improvements. Same issue.

 

[alebrewer]

Personally, for me it is not only or always about changing the mind of another appraiser here - it is so that others, including the newbies, can learn the correct or better way to do things vs a stinky bad POS way to do things - and I have sometimes been wrong here too, but I try to learn from that (really) and I try to give advice that lines up with practice and USPAP-

And sometimes I learn by participating in these threads vs jus treading them - and being appraisal needs we also enjoy discussing theory)

Not arguing with you at all, just wanted to add that as we know, peer practice is a recognized standard in USPAP, so what the majority does can matter. Assuming the majority is competent...

I agree to the idea that offering alternate views can help newbies think through their own opinions about stuff, although I would still disagree that our job is to change their minds - just offer alternative views and allow them to make up their own minds. I disagree with the majority being peers stuff, though. I'm sure Terrel considers very few people to be his 'peer' (as do I). And even if someone's peers ARE doing something (or believing something), if you hold a strong opinion about something - and you're able to defend why you hold that opinion - then it doesn't matter what they do. All my peers may believe that the CA is a valid approach to valuing residential real property - doesn't mean I'm going to weigh that approach in any reconciliation I do.

 

[alebrewer]

Disclaimer; Dude, I'm not against you. As a matter of fact, I hold you in high regard.

haha - I love going at it with Terrel - just because I value his insight.

 

[Surf Cat]

On lake properties, here at least, many homes have a far superior "view" back from the lake than some of the lake front lots. But which sells higher? And why? Dockable or not? I mean docks are generally personal property but the right to have a dock is an attribute of the lot, not the improvements. Same issue.

Dude that's location.... you can't compare Lakefront homes to the ones up on the hill..... we were talking about views... your sidestepping like Kamala!

 

[Terrel L. Shields]

Dude that's location

No it isn't. A lake is a beneficial view. That "view" may be superior to a lakeshore lot, but the lakeside lot will probably sell higher. "Location" refers to something of larger scale like the different parts of town or making a location adjustment between a lakeview lot and a lot far from the lake or between school districts.

But if we cannot differentiate between view, location, site value, and then the question is what else is being rolled up into the mystery adjustments? When are they overlapping and what is tangible and what is intangible?

 

[J Grant]

I agree to the idea that offering alternate views can help newbies think through their own opinions about stuff, although I would still disagree that our job is to change their minds - just offer alternative views and allow them to make up their own minds. I disagree with the majority being peers stuff, though. I'm sure Terrel considers very few people to be his 'peer' (as do I). And even if someone's peers ARE doing something (or believing something), if you hold a strong opinion about something - and you're able to defend why you hold that opinion - then it doesn't matter what they do. All my peers may believe that the CA is a valid approach to valuing residential real property - doesn't mean I'm going to weigh that approach in any reconciliation I do.

USPAP says that peer practice is a standard - as it should be. The clients and users have to know that when they order an appraisal, whether they order it from appraiser A, B, or C, certain accepted methodologies will be used - otherwise, one appraisal can have wildly different results than the other. The idea of public trust is based on that.

I don't mean an appraisal should be micromanaged to be identical to another, but the principals and methods should be the standard for the kind of assignment it is and unless peers share the same standard, it is not a profession -

-The expectations of parties who are regularly intended users for similar assignments and what an appraiser’s peers’ actions would be in performing the same or a similar assignment.

 

[jay trotta]

No it isn't. A lake is a beneficial view. That "view" may be superior to a lakeshore lot, but the lakeside lot will probably sell higher. "Location" refers to something of larger scale like the different parts of town or making a location adjustment between a lakeview lot and a lot far from the lake or between school districts.

But if we cannot differentiate between view, location, site value, and then the question is what else is being rolled up into the mystery adjustments? When are they overlapping and what is tangible and what is intangible?

So in our area, a waterfront lot Sold for $2.5M - no dwelling, when researching assessor records, when one finds similar value given to other similar lots/sites (+/-) IMO it adds to market acceptable indicators (based in part on prior supporting sales). When a dwelling is added, the overall value increases as supported by market sale indicators and I would concur with Terrell, the view, location and site value are supporting factors.

 

[J Grant]

No it isn't. A lake is a beneficial view. That "view" may be superior to a lakeshore lot, but the lakeside lot will probably sell higher. "Location" refers to something of larger scale like the different parts of town or making a location adjustment between a lakeview lot and a lot far from the lake or between school districts.

But if we cannot differentiate between view, location, site value, and then the question is what else is being rolled up into the mystery adjustments? When are they overlapping and what is tangible and what is intangible?

You've just made the argument against your own argument (admitting that the view is a differential from the site value

The view is a differential from the site value when we are appraising an improvement, and is a lot TOGETHER. It is not a land appasial , it is a package deal appraisal - so, other than teh cost approach, the value of the land alone is no longer the question asked in the appraisal.

The question is what the MV of the whole is —and the view contribution to the whole is what we adjust for and what the market reacts to. It is what the buyer pays for when similar sales show an indicator for a postive view adjustment.

 

[J Grant]

No it isn't. A lake is a beneficial view. That "view" may be superior to a lakeshore lot, but the lakeside lot will probably sell higher. "Location" refers to something of larger scale like the different parts of town or making a location adjustment between a lakeview lot and a lot far from the lake or between school districts.

But if we cannot differentiate between view, location, site value, and then the question is what else is being rolled up into the mystery adjustments? When are they overlapping and what is tangible and what is intangible?

I agree, location typically means the property;s location in a certain subdivion or town, as well as if it is near the beach , or near commeical use etc..

We have already covered, numerous times here, that the view is baked into teh lot or land price when VACANT. That is a given if we are doing a vacant lot appraisal, and shows up in the cost approach of res appraisals in the site estimate.

But the valuation question is not what value view brings to vacant land or a vacant lot, even though you seem unable to get beyond that.

The appraisal question is what contribution the view makes to the value of a house or condo. In a dwelling on a lot, The improvement has its own separate value, and so does the lot, but we are not separating them out in the appraisal. We appraise them as a package because they are bought and sold as a package. What you keep calling intangibles, such as view, can impact value and need their own adjustment because buyers do pay for them.

 

[J Grant]

So, you too don't adjust land value, right? I mean OK no problem with adjusting for "view" but if you are giving the LAND a higher price, then don't you have to be careful adding even more for view? Sounds more like waiting until you get semi-close then plug the valuation hole with an ephemeral adjustment.

If it applies in the CA, then it applies in the SA - there is a line for site too, right?
View attachment 91634

Another argument you just made against your own prior arguments?

Above, the land estimate in the cost approach is for vacant lot or site

Now, after the cost approach, we MOVE ON TO THE SALES COMPARISION APPROACH. The buyer is not buying vacant land, or separting out what the house cost, what the pool cost, what the lot cost. Those re analysis for the cost approach, but when we do the sCA, the buyer is buying the land, pool, and house as a package, and if a view is present, they might pay more for the view.

Above the grid, the line is where we adjust for the size of the site or the topography of the site.e

And the view is where we adjust for view. At this point, we are in the SCA, and the view is its contribution to the whole, not a percent to the land and a percent to the house.