Appraisers' Free Forum

Hey rogeryodamilt! Thanks for popping up. How you been?

Jim,

The first question I would ask is, "marketable for what?"

The answer requires some judgment on my part rather than analysis, but if you wanted a trail 20 ft wide why would you buy 65 ft or 750 ft if you had a seller who would carve off 20 ft for you?
Kind of brings me back to value in use rather than market value. Very unique transaction that doesn't compare well with the market dynamics, but then you are supposed to have some data to back up value and the cost approach is, well, something only Denis might consider.

The best I can do is to figure out what the per acre price similar acreage as the larger parcels is selling for and apply it to the trail. May not include the exercises everybody wants to see, but it has adequate support to my way of thinking. Actually it is the only market support.

It's a location thing too. If this 20 ft strip was in the middle of your septic field or needed for an interchange, different enchilada. But here it is out there in the boonies, pretty much not being used for anything, but the larger parcel does have a market according to the data I found. And most likely the trail has a zippy de do da market value, but it has value to the owner and the Town. Voilà a transaction that we want to know the market value of. Hoc-us pocus. Maybe no can do?

I'm gonna do what we call value in use and call it a market of one. Does that misrepresent it? I think it is pretty accurate. Do you think anybody but an appraiser would care?

Oh, I forgot rogeryodamilt showed up. Now we need to discuss the income approach, subdivision development analysis and yield rates.

I suspicioned when rogeryodamilt surfaced things would go off in some tangent. Then when we got the input of pineapple logic the sky becomes the limit. OK, back to the issue.

Some real estate may have zero value, but be prepared to be demonized if you say so. If, in the trail case, one pins one's appraisal to market value the conclusions based on data could well be zero. But then that requires the rather simplistic conclusion that lack of data means there is no value. Sort of a surrender, wouldn't yo agree?

Thanks goodness though that appraisal doesn't require one to completely divest oneself from common sense. Consider the situation. One guy owns the property, somebody else wants it. Maybe their transaction is worth two horses. Bang we got market evidence because they said it wasn't zero. Difference here is that they asked the appraiser, "how many horses?"

Now and only now we have the problema. If they had done it themselves it would count, but if the appraiser does it, the results are suspect and constrained by theory, convention and fear of folly.

Hey,

Don't go away mad PC. In fact, don't go away at all. I think the issue of 0 value is worth talking about. I have never seen it, but that value may be warranted. Some of the conservation easement appraisals I have seen recently absolutely invent H&BU "before" when there is no probable use that would bring anywhere near the value that the land owner wants the appraiser to believe in.

I suppose one question that is begged by a conclusion of 0 value is, "Who needs an appraiser for that?" So tell me how does one support a 0 value, if indeed anyone ever had to do so? Isn't there some kind of assumption in there that no market will develop? Also, I guess since we are stuck with expressing value in dollars, if it won't sell for dollars or the equivalent in kind then it isn't worth anything.

Having raised the question, you now have me thinking I believe there is value of some amount in all land.

End of the trail?