CHAPTER # Contents Lists of Figures and Tables... xi About the Author... xiii Foreword...xv Acknowledgments...xvi Part I Introduction... 1 1 Overview of Land Valuation Assignments and Adjustment Procedures... 3 2 Economic Significance of Land... 11 Importance of Real Estate to Top Wealthholders Private Sector Land Holdings 3 Locating Properties in the Field... 15 Assessor s Section Sheet Scaled Distances and Odometer Computer-Generated Maps U. S. Geological Survey Maps Utility Pole Markers Aerial Photography Deed Book References Using a Compass Global Positioning System 4 Site Analysis... 25 Purpose of Site Analysis Identifying Rights to be Appraised Zoning Private Restrictions Determining Boundary Lines Easements Terrain Soil Conditions Flood Hazards
5 Judging Highest and Best Use... 39 Available Uses Legal Uses Probability of Rezoning Physically Permitted Uses Sufficiency of Demand Duration and Intensity of Parcel Uses Most Probable Site Value Excess and Surplus Land Most Probable Use Highest and Best Use Studies Part II Adjustment Procedures...47 6 Adjusting for Size Differences... 49 Avoid Sales That Differ Widely in Size Supported Size Adjustments 7 Adjusting for Changing Market Conditions... 55 Analyze Resales of the Same Sites Analyze Sales of Similar Sites at Different Times Indexed Time/Price Changes Straight-Line or Exponential Rate of Change 8 Using Property Listings... 61 Benefits of Using Listings for Sale Compare Pattern of Sale Prices to Listing Prices Apply Findings to Appraised Parcel 9 Handling Improved Property Sales... 63 Land Value Extraction Method 10 Paired Sales Analysis... 67 Identify Similar Features of Sales Isolate a Value-Influencing Difference Adjust Price to Reflect a Single Feature Apply Adjustment to Reflect Subject s Value 11 Sale Units of Comparison... 73 Density Units Productive Units Physical Units 12 Accessibility Adjustments... 79 Corner Versus Interior Sites Median Strips vi Land Valuation: Adjustment Procedures and Assignments
Speed Limit Traffic Volume Proximity of Site to Expressways 13 Adjusting for Public Utilities... 85 Influences on Site Size Compare Sales With and Without Utilities Compute Cost of Extending Utilities to Subject or Sale Parcel 14 Location Adjustments for Resort Lots... 91 Interview Brokers, Buyers, and Sellers Array Lot Sales by Proximity to Amenities Plot Unit Price Pattern Apply Price Pattern to Appraised Lot 15 Depth Adjustments... 99 Earlier Depth-Value Estimation Method Comparative Depth of Sales and Subject Parcel Part III Land Valuation Assignments... 105 16 Sites in Mature Neighborhoods... 107 Insufficiency of Lot Sales Establish Neighborhood Lot Value-to-Property Value Ratio Apply Neighborhood Ratio to Appraised Property 17 Prospective Subdivisions... 111 Create a Sound Development Plan Forecast a Realistic Pricing Schedule Forecast the Lot Absorption Rate and Price Mix Estimate the Staging of Land Development and Related Expenses Forecast Marketing and Related Expenses Estimate the Annual Real Estate Taxes Estimate Overhead and Profit Allowance Determine the Expected Discount Rate Select a Discount Rate That Reflects the Timing of Lot Sales 18 Residential Waterfront Property... 119 Driving Time From Population Centers Elevation and Slope of Lot Beach Versus Marsh Frontage Beach Width Direction of Prevailing Winds/Shoreline Erosion Variance Between High and Low Water Levels Access From Water and Land Pier Construction Cost Contents vii
Valuation Techniques 19 Office, Retail, and Industrial Land... 133 Office Land Retail Land Industrial Land Access to Rail, Airports, Interstate Highways, Expressways, and Ports Freestanding Sites Versus Business Park Sites Industrial Land Classification Size and Shape of Site Jurisdictional Taxes Units of Comparison Reliability of the Comparable Sales Method 20 Agricultural Land... 143 Definitions Classifying Soil Types and Land Categories Comparable Sales Land Value by Extraction Income Capitalization Approach Capitalization Rate Selection Appraising Farmland in Suburbanizing Areas 21 Forestland... 163 Definitions Influences on Timber Value Highest and Best Use Bare Land Valuation 22 Scenic Land Conservation Easements... 175 Charitable Gift Law Circumstances Requiring an Appraisal Overvaluation Penalty Valuation Techniques 23 Floodplains and Wetlands... 185 Detection of Floodplains Appraisal of Floodplains Wetlands Trends and Significance Identification of Wetlands Estimating Value of Wetlands Cost of Mitigation viii Land Valuation: Adjustment Procedures and Assignments
24 Contaminated Sites... 197 Appraiser s Responsibilities Working with Environmental Professionals Environmental Site Assessment Stigma Specifying the Problem Contaminated Property Market Data Measures of Impaired Value Valuation Techniques 25 Eminent Domain: Partial Takings... 215 Distinction Between Compensable and Noncompensable Actions Basis for Payment of Just Compensation Valuation Procedure Odd-Shaped Remainders Diminished Size and Road Frontage Isolated Remainders Land-Locked Remainders Impaired Access Grade Change Trees and Landscaping Temporary Easements Analysis of Benefits from Public Improvements Trial Preparation and Testimony Appendices... 235 A Glossary...237 B Internet Web Site Addresses... 245 C Maps... 249 Federal Emergency Management Agency Map Service Center U.S. Department of Interior, Geological Survey National Oceanic and Atmospheric Administration, National Ocean Service Coast Survey U.S. Army Corps of Engineers Soil Maps in County Units U.S. Fish and Wildlife Service Maps, National Wetlands Inventory National MUIR Database Data Access Map Stats U.S. Census Bureau TIGER Mapping Service USGS Node of the National Geospatial Data Clearinghouse DeLorme D Aerial Photography... 255 E Land Measurement and Conversion Tables... 257 F Types of Soil... 261 Contents ix
G Agricultural Land Values...267 H Property Observation Checklist...273 I Advisory Opinion 9... 279 J Guide Note 8, The Consideration of Hazardous Substances in the Appraisal Process... 283 x Land Valuation: Adjustment Procedures and Assignments