Thank goodness for the Farmers Dog. Tasty compared to canned my fellow hobo

I think if there are no listings, sales or available data to use as a Land Value. Try to look nearby subdivision to represents as your comparable. Then, the appraiser’s analysis, experienced, knowledge and understand ratify the valuation. Using Abstraction or Allocation Method will appreciate your valuation. Although, that is part of valuation. My professional opinion using Market Data or Sales Comparison is reliable source of our valuation.

In addition, do not used hypothetical valuation that resulting into distorted the Market.

Land valuation method and cost approach typically are illuminated as illusionary methods in quickly moving markets.  Last year cost approach was how much and now 100k higher market it’s this much more?  Did contractors really raise rates that quickly and who drives the cost of service market and ensuing house pricing, the contractors or the purchasers? Answer is the servicers market is reactionary to home pricing market.  Contractors need places to live too.  So you stick with extraction and scale up the relative proportion of land worth to compensate to some degree, for increasing markets.

A good rule of thumb for site value is that if you’re even remotely close to being over 1/3rd total value in land value, that’s when you need to really put the work in and complete both MV of land and cost to extract reasonable allotments of land value, regardless if that’s in scope of work or not.  The failure of cost to build vs land value tables and tools is apparent in the diversity of markets.  Many ultra high price markets should have well over half of MV attributed to land.  A piece of wood is a piece of wood and costs the same online regardless of your location in the states.  Food for thought.

I CHOOSE to use the Cost Approach whenever I can simply because it helps avoid falling into the trap of circular thinking that can result from use of a single approach. Yes, I DO know how to properly apply extraction (abstraction) despite the change in terminology for what used to be two techniques having morphed into one over the years. I don’t care what you call it as long as you perform it properly.

With almost no exceptions, IF I wanted to ‘pick a part’ an appraisal there are two areas that (nearly) universally will NOT be properly completed: (1) Is the highest and best use “analysis”, and (2) is the determination of site value.

Stated another way, there are two areas in which State ‘regulators’ looking for easy money are almost guaranteed easy pickings. Of the two areas the cost approach is the easiest to develop and defend properly. It adds from 1/4 hour to an hour for each report to perform and summarize the results in the form report.

H&BU is a bit trickier. SOMETIMES it can be boiler-plated BUT if you have to ask how then you should NOT use BP for it because you’d likely not recognize those circumstances when the BP is inapplicable and actual analysis with appropriate commentary is needed.

Lastly, don’t forget that just because most of your work may be in a crowded city with no (few) land sales that it means when all of a sudden you do rural work with LOTS of land for sales, that you can use your crowded city extraction or abstraction approach.

Just a couple of the problems associated with ‘one size fits all’ fee arrangements. I charge for the extra time it takes to do it the right way. Its why I’ve done less and less loan production work each year over the past five. So far in 2017 I plan to do NO GSE loan related residential appraisal work.

Keeping my fingers crossed, and wondering if dog food can really taste all that bad?

Yes sir Retired Appraiser if some appraisers would Open there eyes they would see that…….Satan is real. 

Give them a week Jack!  Joan Trice & Donald Trump are two birds of the same feather; their vanity and ego are too fragile for criticism.

appraisal buzz I believe is allowing comments

Again , Lmfao

The comment about Extraction also contradicts the “Extraction Has No Traction” blog post that quotes The Dictionary of Real Estate saying “most effective when the improvements contribute little to the total sale price of the property.” Land is 18% so improvements = 82% of value. Sounds like direct contradiction to me.

Lastly, the article still doesn’t answer, or give any assistance to us appraiser’s stuck in the conundrum of lenders mandating the provision of a Site Value, even if the CA is not required, for properties where Site Values really aren’t easily or reliably (especially not within the time/money requirements of lender work) quantifiable or justifiable. So we appraisers remain either penniless (“You should just refuse to work for those lenders”) and out of work if we don’t or damned (USPAP violator & should lose your license) if we do.

I appreciate these blog posts but I could really use additional help solving this real world dilemma. How can I do the work so I can feed my kids while not being at high risk of losing my license.

You have been hired to opine MARKET VALUE.  The definition of MARKET VALUE is applicable.  IF there are no typical buyers or sellers for a component of the real estate being appraised, there is no MARKET VALUE.  In some areas, there are land sales, in some areas there sales of homes that are razed so that new homes can be built, in some areas there are damaged homes that are sold for the land to be rebuilt, and in some areas there are no sales of land, or homes that were razed.  Hence there is NO MARKET in those areas for vacant.

A Market might be created, if a tornado or some other natural disaster blew down several homes.  But that would be a HYPOTETICAL market if such a thing has not happened.

So after appraisers stop playing yes man, they need to converse with their client WHAT VALUE they are opining for a component parcel of property?  Value in Use, via extraction or allocation would be my assumption, if no market exists.

Oh but lenders “need” market value.

Sorry, per the definition of market value, there are no “typical” buyer’s or sellers, regardless to their motivations or knowledge, blah, blah, as of the effective date.

So try again.