Weight of view on appraisal value?

[Surf Cat]

So, why delve into the intangible of the view and concentrate upon the lot value?

Because of that pesky line item within the grid on the forms is why. Red flags will be thrown if you have a view property subject, and a comp without a view with no adjustment or explanation as to why there's no adjustments.

I mean, even the rookie OP is questioning it. Which is why I questioned how it even got by underwriting. We haven't heard back from the OP (as usual) and there's a lot of context missing. I'm wondering if the OP is reviewing the report, or was given an old report and is doing an appraisal on said View property Or..... is the homeowner wondering why their view wasn't given any consideration.

To your point about the view being baked into the land, if I was appraising a property such as the one I've attached here, you have no other choice but to use similar Estates with similar Vantage points. You wouldn't use a sale without this view. Within the report, it would be across the board B;CtySky
(Beneficial, City Skyline) with no "adjustments" as its "baked in".

Without the OP chiming back in, we're just left with assumptions.

 

[J Grant]

No. It has one value...by the very MV definition you oft quote.

Yes you are. The improvements are temporary. The land is permanent and you are valuing the worth of the rights to own that property.

MV for the house that is the subject of the appraisal is valuing the rights of the improvement on the land, not just rights to the land.

 

[JTip]

The land value will reflect the view's contributory value, if any.

Take the improvements away and the view is still there, just like the land.

Edit: It's easier to support improvement adjustments (offering similar lots with similar views) vs extracting a view adjustment.

 

[Terrel L. Shields]

The improvement is expected to last 60-100 plus years, not temporary, as long as the HBU retains it.

That is not classical appraisal theory....nor even practical theory. 60 years, 500 years - improvements deteriorate - even the Pyramids...

"Real Estate is immobile and tangible." View, per se, therefore is not real estate as it is not tangible, but value of the site is based upon attributes of the site - which includes location and view- location being both regional position and attributes of the precise location.
"Real Estate is the physical land and appurtenances (improvements) affixed to the land"

There is nothing tangible about view. It is an attribute of the site (land) whether bare land or improved. And land is impacted by its surroundings for sure. Build a bigger house in front of yours and a lawsuit is liable to be filed because it impacts the value of your lot. But that impact is due to the nature of the construction. And, that impact is applied to the improvements, not the land. It is an external obsolescence when the view gets blocked by new construction (off site), and again, the book says, "In the cost approach, the total loss in value due to external obsolescence is allocated to the improvements."

The above in quotes are from 10th Ed of The Appraisal of Real Estate. So what text are you referencing?

pesky line item within the grid on the forms

Is it required to be filled? Does it trump USPAP?

ou have no other choice but to use similar Estates with similar Vantage points.

Even if they do not exist?

not just rights to the land.

Real property includes improvements, but land still does not depreciate. And view remains an intangible but is an attribute along with location of the land value. Thus, it belongs in the land value adjustment.

 

[J Grant]

Terrel, belive what you want but the majority of res appraisers are adjusted for view because the market pays for it. You are out of step with peers on it but do whatever you want

 

[Terrel L. Shields]

the majority of res appraisers are adjusted for view because the market pays for it.

No. They are adjusting for the land attribute that view offers. Call it what they want. But they do need to know the differnce. No bank lends on an intangible asset. This value is baked into the land. And if they are valuing the land AND adding the view, then they are double-dipping.

 

[Surf Cat]

Real property includes improvements, but land still does not depreciate. And view remains an intangible but is an attribute along with location of the land value. Thus, it belongs in the land value adjustment.

So.... you have a subject property with a beautiful Lake View and comps 1 and 2 are of similar location and lake views. However, comps 3 and 4 are around the bend, are of similar Construction, similar GLA and site area yet, no Lake View.

You have a GSE assignment, 1004 UAD request, ordered by Swindler AMC.

You note the lake view on page one of the report and in the grid, the "view" section....from the drop-down menu you choose Beneficial;Lake.....same for comps 1 & 2. Comps three and four however, in the view section, you have Neutral;Residential. You've determined from your analysis that the properties with the lake views indicate a premium of $50K.

Correct me if I'm wrong, but what you're saying is that you would put "0" ( the requirement for a uad report if the rating is different from the subject and no adjustment) and in the site area of comps 3 & 4, put +$50k?

 

[Tiffany Gibbons]

Views such as you describe command a premium. How much depends on the sales of similar homes with the same views in comparison to homes without the views.

I'm surprised that appraisal went through underwriting without comparables of similar vantage points.

So, are you doing a review? Or, have you been given this report from your client as a reference and are doing an appraisal on this property with the skyline view?

Have you ever heard an appraiser descrbe a view as spectacular on an appraisal? Or a review appraiser or underwriter? That sounds more like a listing agent or the owner's description of a view, especially since OP has not weighed back in on any of the comments. Just a thought.

 

[Terrel L. Shields]

a beautiful Lake View

Call it what you want. But view is intangible. And so view is an attribute of the land. Describe it as it is. Just because you comment on the view does not mean you are forced to adjust for it. And, again, I bet the evidence is going to be that the lot (which in many cases may not have sold in the past 40 years) is worth one whale of a lot more than some nearby without a "beneficial" view.

So, are you saying that the land value is double or triple that of other lots then you plunk on an additional $50 for view??? Double dipping is a real risk. But saying that lot is only worth what the lot on the other side of the hill is, well, that's probably not right either.

 

[Surf Cat]

Have you ever heard an appraiser descrbe a view as spectacular on an appraisal? Or a review appraiser or underwriter? That sounds more like a listing agent or the owner's description of a view, especially since OP has not weighed back in on any of the comments. Just a thought.

I was focusing more on "City Skyline" "seen from both first and second floors"....not the flowery realtor speak..... I imagined views that I see in Los Angeles like the one I posted in post #21....an over the top example for sure....but many lesser homes with much smaller lots have these views.