Weight of view on appraisal value?

[J Grant]

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.

On what line do you adjust for view in the SCA grid? ( assuming you do any Res GSE work)

We all understand teh land value includes any contributory value of a view and take the implements away and the land is still there. But again, we are not doing a land appraisal,

We are appraising a house and land together. Take out the improvement per your reasoning, and the property might appraise for half the $ amount, which makes no sense.
When the assignment is MV for an improvement on the lot, the question is , what premium ( if any_) are buyers paying for the view?

 

[Tom4value]

When comparing properties in an appraisal, should a view add value? I reviewed an appraisal today on a property which has a spectacular view of San Francisco, including the city skyline and multiple bridges, from the entire first and second floors. The comps, while otherwise comparable, have no views and are adjusted on square footage alone. Am I off-base to think this should be another factor in appraising the propertie's value? Any insight here will be greatly appreciated.

Since this not your appraisal and you are asking us, I will forgive the obviously biased word, “spectacular”. (Tongue in cheek).

That being said and knowing that we are both human, yes, we should adjust for view. Why? Because that is what buyers do and our job as appraisers is to gauge what buyers and sellers would do.

This appraiser was either lazy, scared of being accused of being biased or just plain didn’t know the market.

 

[JTip]

On what line do you adjust for view in the SCA grid? ( assuming you do any Res GSE work)

That's a low key trick question......


Depreciated values of improvements can be quantitatively calculated. Sticks and bricks are worth $X and can be a mansion or mobile home. The land has factors, not the improvement.

You can take the view away from the improvement but you can't take it from the land. As in an oceanfront property, that million dollar home has a great view, but when the hurricane levels it, the land still enjoys the view and always will.

 

[Dublin ohio]

Hypothetically if you have two identical lots except one has a wooded view and one does not and the wooded view lot sells for $x more than the non wooded view lot. That difference in price would be attributable to the..............................

Had to edit it. Didn't consider waterfront "location"

 

[Dublin ohio]

Need to get rid of the location adjustment as well as it falls under the same logic

 

[Terrel L. Shields]

consist of similar, right?

At what point are 2 views identical? And how to you measure that? I mean that's the same issue for determining a land value that is unique in itself, but at least I can point to a tangible land sale and I've never seen a tangible view sell.

What does that have to do with anything?

Adjusting for land by extracting some "value" from some paired sales or whatever, means you are also incorporating the externalities and functional issues within the "View" or you are valuing the land as if it did not have a view that was special. And you risk double dipping if you accurately reflect the value by the traditional was (which was once in USPAP but removed 20+ years ago because they realized it was not appropriate for insurance value, etc. "Land is valued "as if vacant and available for its highest and best use." Textbook quote.

If not at its HBU its utility is something less than its potential. Right? And its value at this effective use is taking on obsolescences. Aren't we supposed to...."(a) be aware of, understand, and correctly employ those recognized methods and techniques..."

Then we need to value the land and its attributes. View is part of its attributes and not a separate tangible item.

 

[Terrel L. Shields]

Need to get rid of the location adjustment as well

Location can impact the improvements, view exists whether a house is there or not. I find it a stretch to claim a "Lakeview" lot where you can only see a tiny bit of the lake in winter from the second story dormer window.

 

[Overimprovement]

It's an interesting question because an oceanfront condo project has a singular location but only one side of the building has the view amenity; the difference being in how the building was designed and built.

I've never seen a view amenity alter the value of an industrial or a retail or an ag use. Office and residential and perhaps a (house of worship).

Moreover, if the structure isn't oriented to the view or isn't designed to "use" the view then its (location w/view) doesn't become a significant factor.

The Marin City property apparently has an obstructed view of the bay. 60ft elevation from ~1/2 mile to the east; but the design of the building and the windows in the living room weren't oriented to take full advantage of that view.

^^This.^^ Was going to post this similar thought. A view from a land-only perspective is a POTENTIAL view only. If the 'view' is to the west, and the neighbor builds a 15' wooden fence on their eastern boundary, what about that view? If the view is only visible from 12' high, and zoning allows it, but the site is improved with a one story SFR, what of that view? If the western wall of the house literally has no windows, what of that view?

View is potential until unlocked or properly utilized by the site owner. Value accordingly.

The exact same argument applies to inferior views--we call this external obsolescence, right? A home could be directly across from an auto scrapyard that does or does not have a high decorative fence and/or 15' ornamental bushes in front of it. The presence or lack of these items will very likely have an impact on the market value of that home.

If views can cause external obsolescence, can they not cause positive impacts on value as well?

In my avatar, you see a five story home that was built on the coast in the FL Panhandle. It is the basis for my name on this forum. The builders had city commission approval, but not subdivision association approval. Inland lot owners within the same subdivision sued, claiming greatly diminished home value because of....wait for it....view impedance.

I worked that property as an REO Asset Manager in 2010. It took five figures to an attorney and 9 months to win that case, but it was extremely contentious. None of that had anything to do with the site value of the complaining condo owners.

 

[Tiffany Gibbons]

No.... I wasn't saying double or triple the lot value. In my hypothetical example, I was just seeing where you would put the difference of 50K, attributable from "not" having the lake view in a 1004 report.....

I'm not trying to turn the screws on you or anything.... I was just trying to understand how you handled it.

I just don't see how you can get around it on a 1004 for the GSE's.

Or the condominium form, could this be a condominium?

 

[J Grant]

That's a low key trick question......
View attachment 91547

Depreciated values of improvements can be quantitatively calculated. Sticks and bricks are worth $X and can be a mansion or mobile home. The land has factors, not the improvement.

You can take the view away from the improvement but you can't take it from the land. As in an oceanfront property, that million dollar home has a great view, but when the hurricane levels it, the land still enjoys the view and always will.

I understand this, but we are not appraising raw land or vacant sites. It was not a trick question - we adjust for view as a premium, so we have to be consistent with that.c

Wrt the you can take the view away from the improvement but not the land reasoning - where does that leave you, giving no value to the improvement and just a land value? The improvement is affixed to the land, and the buyer purchases them as a single transaction and the view is part of it..

In the cost approach section the view effect on the land price is baked into the land value estimate, for those that accuse me of "ignoring" it .