Weight of view on appraisal value?

[Terrel L. Shields]

You posted here that your own trainee for a residential license had her work come before the state board twice.

20 years after she went on her own... and the board dismissed the FNMA "tips" out of hand. She never went to the board. Her lawyer from her E & O got the investigator to throw out the complaints.

which is a different subject than view.

So you say there is no relationship between the land and the view but once a house is built "view" suddenly becomes part of the value. Please (once again I ask) show me the textbook that says that.

All you do is confuse people and get off topic

I understand it is easier to confuse you than most people. Truth often confuses you. Again. The challenge. Show me where a textbook says view is not an attribute of the land before the house is built. And pray tell again, how does changing the buyer make the value of the land change.

 

[CGinMN]

The F'n value (either stand alone or as part of a site for improvements) is exactly the same contribution. LAND IS VALUED AS IF VACANT AND AVAILABLE FOR ITS HIGHEST AND BEST USE... always. So, the contributory value of the building varies with the value of the land...not vice versa.

The buyer of the property does not make one d***ed bit of difference. It is what it is. There is only one price (value) to the land. Any defect accrues to the improvements (functional obsolescence) and while an externality (like a landfill next door) can impact both, it still does not DEPRECIATE the land. The land cannot move so its value is what its value is - period. There are no dual value lots.

You act like somehow that there is zero relationship between cost and sales when they are interlocked. And regardless vacant or developed, the "view" is an attribute of the land, not vice versa.

None of what you said is inconsistent with what I've said.

 

[Terrel L. Shields]

None of what you said is inconsistent with what I've said.

?

. The market for a vacant site is different than the market for a the same site with an improvement in it.

So, I ask again. How does a different buyer make the value of land under a lot change? Land is valued as if vacant even when it is not vacant. That's a tenant of the principle of HBU. Right? Land contributes one price. If the view is there from improved land, then the view was there when vacant, except when dealing with the 3rd dimension (height)

 

[CGinMN]

I never said a different buyer makes the value of the land under a lot change.

This is why it being argued that the view premium goes to the improvements, not the site. Within the cost approach, the builder’s ability to capture additional market value from the view is accounted for as entrepreneurial profit.

 

[J Grant]

20 years after she went on her own... and the board dismissed the FNMA "tips" out of hand. She never went to the board. Her lawyer from her E & O got the investigator to throw out the complaints.

So you say there is no relationship between the land and the view but once a house is built "view" suddenly becomes part of the value. Please (once again I ask) show me the textbook that says that.

I understand it is easier to confuse you than most people. Truth often confuses you. Again. The challenge. Show me where a textbook says view is not an attribute of the land before the house is built. And pray tell again, how does changing the buyer make the value of the land change.

Are you misstating what I wrote on purpose?

I never said there is no relationship between land and the view. I said ( same as Mich CG) that the view contribution to a land with an improvement can be different than the view contribution to land when it is vacant

 

[Terrel L. Shields]

the builder’s ability to capture additional market value from the view is accounted for as entrepreneurial profit.

So what is the accurate value of the land? And, why is it different in an improved property from the vacant site? Does the developer not realize a premium price from that lot? Is EP only realized with improvements, or can it be realized with a vacant but desirable lot sale? The time value of money means a person is more willing to pay above the cost plus land value in order to move in now instead of the six-12 months before it is finished. But that is part of the Entrepreneural incentive, isn't it?

I am simply arguing that if you estimate the full value of the land, then an additional adjustment for view risks double-dipping.

 

[CGinMN]

In the example I provided, both "identical" sites are worth $500,000. Once improved, the land value does not change. However, a view adjustment may still be warranted when both sites have identical characteristics. This is because of how the improvements are constructed.

Under a different scenario, when comparing sites with dissimilar characteristics, the land value might entirely account for the view. Assume for example, two identical 2-story homes were built instead, but one of the lots was worth $450,000 because it is slightly smaller. There is no view adjustment, and maybe the market values of the improved properties are $1,500,000 and $1,450,000, respectively. However that may also not always be the case. Maybe they're both worth $1,500,000 and whatever lot premium there was for size goes away. Or maybe the lot premium is magnified and the improved values are now $1,500,000 and $1,400,000. The point is that market participants for improved parcels can and do react differently than those for vacant land.

I am simply arguing that if you estimate the full value of the land, then an additional adjustment for view risks double-dipping.

One might risk that, or one might risk under-adjusting too. You can't always look only to the land for all the view adjustments. And if you do, that is where the risk comes in.

 

[alebrewer]

Got a multi state draw lake close to me. Many of the lots don't have views - that is, until someone builds a two story home with a rooftop deck - then they have views. And I can say emphatically that the market pays more for those homes than for the homes which were not built to accommodate a view. Land value is the same in both scenarios. It's like any other 'contributory value' item; the 'engineered' view provides greater contributory value than a home without an engineered view.

 

[djd09]

view adjustments seem to be very discriminatory against the seeing impaired...

 

[The Bob]

you sue them. Most towns have height restrictions anyway.

premiums? What textbook. Quote please.

If a lot sells for double because of its view, then that is built into the sale price of an improved lot. But that view is there even if the lot is vacant. Any idiot who prices a lot knows that. They are going to ask for a premium. So the "view" is baked into the cake. The house is the same regardless if it is on this lot or another. It will cost the same. The buyer of the improved property is paying a premium over that cost that is directly related to the VIEW, right? No view, no premium. Any other lot without a view, no premium. The premium is in the land. You cannot claim the house will sell for double or triple its cost to construct simply by saying that is the Replacement Cost New. RCN does not include "view". The premium is in the land.

That has not been my experience. The total market value of the view lot + improvements is hardly ever equal to the sum of the parts. It's always more. So the at least some value for view is accruing to the improvements.