Land is basic to real estate appraisal. - Vermont...Land is basic to real estate appraisal. It is one of the essential components of property: land improvements to the land (site improvements)
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
0
Land is basic to real estate appraisalIt is one of the essential components of property
land improvements to the land (site
improvements) buildings comprise the total property
valueWhen using a cost approach to value a land
schedule is needed to allocate the amount of value attributable to the land When using the Cost Approach the land value is added to the site improvements (water septic driveway etc) and the cost of improvements (buildings) minus depreciation to indicate an overall value for the property
1
Land Schedules are an important component of a cost approach to value in a mass appraisal settingLand +Site Improvements +RCNLD (Replacement Cost New Less (Minus) ndashDepreciation) ----------------------------------------------------= Estimate of Value by the Cost Approach
2
(RCN)
(RCNLD)
You need to understand where your values came from ALL OF THESE COME FROM THE
MARKETWhile we do not have the time or resources to do an
individual sales comparison approach on every piece of land we will use sales to develop a schedule to apply to all land in town
In addition if you ldquoinheritedrdquo an existing land schedule it is important that you understand how this land schedule was derived and how it relates to your current valuation system and the current market
The basis of a land schedule is the market (sales) A full land analysis should be performed to determine what factors affected the sale of each parcel of land and how that information can be used to value each piece of land within a town
We are trying to project what we know (the market the sales information) onto what we do not know (land values for unsold properties)
In order to do this you must become a student of your market
3
Property Value = Bullrsquos Eye
Sales Information
STEP 1-bull Identification-
bull Define the Problem
STEP 2
bull Analysis-bull General Market Factorsbull Specific of sales amp then
subject(s)
STEP 3
bull Valuationbull Projectapply the results of your
analysis onto the subject property or properties
4
Identify what we are to valueWhat is the property we are valuing One parcel or several parcelsIn town assessment work typically we are valuing all
land town wide
How is land described and measured
Land Description Systems-The earliest form of land description was the ldquoboundedrdquo
description which described the property by reference to physical features or adjacent property owners Typical features included trees ridgelines streams and roads Little thought was given to the fact that a fence line or tree line might someday cease to exist
As land became more valuable and disputes over unclear ldquoboundsrdquo became more numerous better methods of description evolved It became a common surveying practice to measure the direction of property lines with compass bearings and the distance with measuring chains or tapes Property described in this manner became known as ldquometes and boundsrdquo
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
5
Metes and Bounds- although this is an older term for a description of property lines- ldquometesrdquo refers to measurement and ldquoboundsrdquo refers to boundaries including features of terrain and other markers
Most deeds that you will find today will have some sort of metes and bounds description although not all are thorough or conclusive
The bearing of a line is the angle between a north-south meridian and the line from north or south toward the east or west
In a metes and bounds description each property line is described with the beginning of each line being the end of the preceding line A proper metes and bounds description should ldquocloserdquo that is the last line should come back to the point of beginning
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
6
80 x 100 = 800020 x 100 = 2000 2 = 10008000 + 1000 = 9000 43560 =
2066 Acreage
80
100
100 If you know the square feet in an acre you can
calculate the square footage of any portion of an acre Conversely if you know the square footage of an area you can calculate the acreage or portion of an acreExample - 85 acres x 43560 sf per acre = 37026 sq ftExample - 37026 sq ft43560 sf per acre = 85 Acre
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
7
MEASUREMENTS (Interesting if not applicable)
1 MILE= 8 FURLONGS1 FURLONG= 660 FEET OR 10 CHAINS1 CHAIN= 66 FEET OR 4 RODS1 ROD= 16 12 FEET OR 25 LINKS1 LINK= 792 INCHES
1 LEAGUE= 3 MILES (OR 25 LABORS)1 LABOR= 17714 ACRES1 VARA= 33 13 INCHES (TEXAS)1 ARPENT= +-1918 FEET (LOUISIANA)1 POLE (AKA PERCH ROD)= 165 FEET1 SMOKE= THE DISTANCE A MAN TRAVELS
ON MULE BACK WHILE SMOKING A CIGARETTE
1 COLPA= OLD IRISH MEASURE OF LAND EQUAL TO THAT WHICH CAN SUPPORT A HORSE OR COW FOR A YEAR-APPROXIMATELY AN IRISH ACRE OF GOOD LAND
1 DAYS WORK= 4 SQUARE PERCHES40 DAYS WORK= 1 ACRE OR THE AMOUNT A TEAM OF OXEN
COULD WORK IN A DAY1 ACRE= 10 SQUARE CHAINS1 ACRE= 43560 SQUARE FEET
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
8
Other types of land identification systems Rectangular Survey System- 6 mile by 6 mile
townships 36 numbered sections and geographically referenced points This system is used in at least 30 states and was started by the government in 1785
Lot amp Block LongitudeLatitude References XY Coordinates Parcel ID Systems- Tie and Coordinate Land
Town wide property maps with integrated GIS can be very valuable in this process
Now that we have identified and defined what we are appraising we will begin our analysis
Acreage accuracy is typically accepted in the following order
a) Deed (If clear measurements and markers are described in deed)
b) Survey done by registered surveyor and recorded in town clerkrsquos office
(where no obvious errors are found)
c) Property map Topographic and flood plain maps are helpful also
12
STEP 2ANALYSIS -GENERAL
Analysis of the sale or sales and the subject property or properties
What are the factors and attributes that will affect the value or values of the property or properties that we are valuing These will be both general and town specific
Land supports all life and stands at the center of human cultures and institutions Wars have been waged over land and the rights to the ownership of land are embedded in the laws of all free nations and defended by their courts
Land uniqueness stems from its fixed supply and immobility Land cannot be manufactured or reproduced Also land is a factor of production required directly or indirectly in the production of all other goods Our most basic resource land is the source of all other wealth
STEP 2ANALYSIS -GENERAL
13
Land Valuation Theory
3Change
Balance
4Anticipation
Competition
Conformity
Constant Use
Contribution
Progressionand
Regression
Substitution
1Supply
and Demand
2Surplus
Productivity
Increasing and
Decreasing Returns
Appraisal Principles relating to land
STEP 2ANALYSIS -GENERAL
14
HIGHEST AND BEST
USE
A Principle of Supply and DemandSupply and demand has special significance in land
valuation because the supply of land is essentially fixed This means that the price of land in a particular area will be determined by demand factors such as population density and rate of growth local employment and income levels the capability of local transportation systems and mortgage interest rates
The supply of land for a particular use may increase or decrease
For example forest and farmland on the periphery of a city may be developed for residential use The increased supply slows price increases
STEP 2ANALYSIS -GENERAL
15
1 Appraisal Principles Relating to Land Schedule Derivation
A Principle of Supply and Demand
The principle of supply and demand explains the large differences in land values between urban and rural areas between different urban areas and even between different neighborhoods in the same urban or rural area No other commodity exhibits such large variations in price
(LOCATION LOCATION LOCATION)
Supply Increase- Demand Steady or Low- Prices Stabilize or Decrease
Supply Prices
DemandSupply Low- Demand High- Prices Increase
DemandPrices
Supply
STEP 2ANALYSIS -GENERAL
16
B Principle of Surplus ProductivityPrinciple of Surplus Productivity states that returns
attributable to land are what remain after returns to labor management and capital are satisfied
The principle of surplus productivity underscores the unique position of land in production and helps explain why land values can vary dramatically If two parcels are used for identical purposes and are similar in their labor management and capital requirements but one because of its location produces greater gross income than the other then the difference in net income will be capitalized entirely into differences in land values
Example Cost to develop and market lots in a subdivision
C Principle of ChangeThe principle of change states that market value is
determined by dynamic economic political and demographic factors such as zoning rent controls interest rates transportation and local economic conditions
Due to the fact that the supply of land is relatively fixed its value is affected by changes in economic political and demographic market forces
Example - Interest rates businesswork 911
STEP 2ANALYSIS -GENERAL
17
D Principle of AnticipationThe principle of anticipation which underlies the income
approach to value states that market value equals the present value of future benefits
What does the person expect to get when buying the property
In the case of vacant commercial land this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land Similarly the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land The principles of anticipation and change underscore the need to estimate market value as of a given date
HIGHEST amp BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND
Highest amp Best Use is the reasonable probable and legal use of vacant land or improved property that is physically possible legally permissible appropriately supported financially feasible and that results in the highest value
STEP 2ANALYSIS -GENERAL
18
Highest amp Best Use
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
Land is basic to real estate appraisalIt is one of the essential components of property
land improvements to the land (site
improvements) buildings comprise the total property
valueWhen using a cost approach to value a land
schedule is needed to allocate the amount of value attributable to the land When using the Cost Approach the land value is added to the site improvements (water septic driveway etc) and the cost of improvements (buildings) minus depreciation to indicate an overall value for the property
1
Land Schedules are an important component of a cost approach to value in a mass appraisal settingLand +Site Improvements +RCNLD (Replacement Cost New Less (Minus) ndashDepreciation) ----------------------------------------------------= Estimate of Value by the Cost Approach
2
(RCN)
(RCNLD)
You need to understand where your values came from ALL OF THESE COME FROM THE
MARKETWhile we do not have the time or resources to do an
individual sales comparison approach on every piece of land we will use sales to develop a schedule to apply to all land in town
In addition if you ldquoinheritedrdquo an existing land schedule it is important that you understand how this land schedule was derived and how it relates to your current valuation system and the current market
The basis of a land schedule is the market (sales) A full land analysis should be performed to determine what factors affected the sale of each parcel of land and how that information can be used to value each piece of land within a town
We are trying to project what we know (the market the sales information) onto what we do not know (land values for unsold properties)
In order to do this you must become a student of your market
3
Property Value = Bullrsquos Eye
Sales Information
STEP 1-bull Identification-
bull Define the Problem
STEP 2
bull Analysis-bull General Market Factorsbull Specific of sales amp then
subject(s)
STEP 3
bull Valuationbull Projectapply the results of your
analysis onto the subject property or properties
4
Identify what we are to valueWhat is the property we are valuing One parcel or several parcelsIn town assessment work typically we are valuing all
land town wide
How is land described and measured
Land Description Systems-The earliest form of land description was the ldquoboundedrdquo
description which described the property by reference to physical features or adjacent property owners Typical features included trees ridgelines streams and roads Little thought was given to the fact that a fence line or tree line might someday cease to exist
As land became more valuable and disputes over unclear ldquoboundsrdquo became more numerous better methods of description evolved It became a common surveying practice to measure the direction of property lines with compass bearings and the distance with measuring chains or tapes Property described in this manner became known as ldquometes and boundsrdquo
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
5
Metes and Bounds- although this is an older term for a description of property lines- ldquometesrdquo refers to measurement and ldquoboundsrdquo refers to boundaries including features of terrain and other markers
Most deeds that you will find today will have some sort of metes and bounds description although not all are thorough or conclusive
The bearing of a line is the angle between a north-south meridian and the line from north or south toward the east or west
In a metes and bounds description each property line is described with the beginning of each line being the end of the preceding line A proper metes and bounds description should ldquocloserdquo that is the last line should come back to the point of beginning
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
6
80 x 100 = 800020 x 100 = 2000 2 = 10008000 + 1000 = 9000 43560 =
2066 Acreage
80
100
100 If you know the square feet in an acre you can
calculate the square footage of any portion of an acre Conversely if you know the square footage of an area you can calculate the acreage or portion of an acreExample - 85 acres x 43560 sf per acre = 37026 sq ftExample - 37026 sq ft43560 sf per acre = 85 Acre
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
7
MEASUREMENTS (Interesting if not applicable)
1 MILE= 8 FURLONGS1 FURLONG= 660 FEET OR 10 CHAINS1 CHAIN= 66 FEET OR 4 RODS1 ROD= 16 12 FEET OR 25 LINKS1 LINK= 792 INCHES
1 LEAGUE= 3 MILES (OR 25 LABORS)1 LABOR= 17714 ACRES1 VARA= 33 13 INCHES (TEXAS)1 ARPENT= +-1918 FEET (LOUISIANA)1 POLE (AKA PERCH ROD)= 165 FEET1 SMOKE= THE DISTANCE A MAN TRAVELS
ON MULE BACK WHILE SMOKING A CIGARETTE
1 COLPA= OLD IRISH MEASURE OF LAND EQUAL TO THAT WHICH CAN SUPPORT A HORSE OR COW FOR A YEAR-APPROXIMATELY AN IRISH ACRE OF GOOD LAND
1 DAYS WORK= 4 SQUARE PERCHES40 DAYS WORK= 1 ACRE OR THE AMOUNT A TEAM OF OXEN
COULD WORK IN A DAY1 ACRE= 10 SQUARE CHAINS1 ACRE= 43560 SQUARE FEET
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
8
Other types of land identification systems Rectangular Survey System- 6 mile by 6 mile
townships 36 numbered sections and geographically referenced points This system is used in at least 30 states and was started by the government in 1785
Lot amp Block LongitudeLatitude References XY Coordinates Parcel ID Systems- Tie and Coordinate Land
Town wide property maps with integrated GIS can be very valuable in this process
Now that we have identified and defined what we are appraising we will begin our analysis
Acreage accuracy is typically accepted in the following order
a) Deed (If clear measurements and markers are described in deed)
b) Survey done by registered surveyor and recorded in town clerkrsquos office
(where no obvious errors are found)
c) Property map Topographic and flood plain maps are helpful also
12
STEP 2ANALYSIS -GENERAL
Analysis of the sale or sales and the subject property or properties
What are the factors and attributes that will affect the value or values of the property or properties that we are valuing These will be both general and town specific
Land supports all life and stands at the center of human cultures and institutions Wars have been waged over land and the rights to the ownership of land are embedded in the laws of all free nations and defended by their courts
Land uniqueness stems from its fixed supply and immobility Land cannot be manufactured or reproduced Also land is a factor of production required directly or indirectly in the production of all other goods Our most basic resource land is the source of all other wealth
STEP 2ANALYSIS -GENERAL
13
Land Valuation Theory
3Change
Balance
4Anticipation
Competition
Conformity
Constant Use
Contribution
Progressionand
Regression
Substitution
1Supply
and Demand
2Surplus
Productivity
Increasing and
Decreasing Returns
Appraisal Principles relating to land
STEP 2ANALYSIS -GENERAL
14
HIGHEST AND BEST
USE
A Principle of Supply and DemandSupply and demand has special significance in land
valuation because the supply of land is essentially fixed This means that the price of land in a particular area will be determined by demand factors such as population density and rate of growth local employment and income levels the capability of local transportation systems and mortgage interest rates
The supply of land for a particular use may increase or decrease
For example forest and farmland on the periphery of a city may be developed for residential use The increased supply slows price increases
STEP 2ANALYSIS -GENERAL
15
1 Appraisal Principles Relating to Land Schedule Derivation
A Principle of Supply and Demand
The principle of supply and demand explains the large differences in land values between urban and rural areas between different urban areas and even between different neighborhoods in the same urban or rural area No other commodity exhibits such large variations in price
(LOCATION LOCATION LOCATION)
Supply Increase- Demand Steady or Low- Prices Stabilize or Decrease
Supply Prices
DemandSupply Low- Demand High- Prices Increase
DemandPrices
Supply
STEP 2ANALYSIS -GENERAL
16
B Principle of Surplus ProductivityPrinciple of Surplus Productivity states that returns
attributable to land are what remain after returns to labor management and capital are satisfied
The principle of surplus productivity underscores the unique position of land in production and helps explain why land values can vary dramatically If two parcels are used for identical purposes and are similar in their labor management and capital requirements but one because of its location produces greater gross income than the other then the difference in net income will be capitalized entirely into differences in land values
Example Cost to develop and market lots in a subdivision
C Principle of ChangeThe principle of change states that market value is
determined by dynamic economic political and demographic factors such as zoning rent controls interest rates transportation and local economic conditions
Due to the fact that the supply of land is relatively fixed its value is affected by changes in economic political and demographic market forces
Example - Interest rates businesswork 911
STEP 2ANALYSIS -GENERAL
17
D Principle of AnticipationThe principle of anticipation which underlies the income
approach to value states that market value equals the present value of future benefits
What does the person expect to get when buying the property
In the case of vacant commercial land this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land Similarly the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land The principles of anticipation and change underscore the need to estimate market value as of a given date
HIGHEST amp BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND
Highest amp Best Use is the reasonable probable and legal use of vacant land or improved property that is physically possible legally permissible appropriately supported financially feasible and that results in the highest value
STEP 2ANALYSIS -GENERAL
18
Highest amp Best Use
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
Land Schedules are an important component of a cost approach to value in a mass appraisal settingLand +Site Improvements +RCNLD (Replacement Cost New Less (Minus) ndashDepreciation) ----------------------------------------------------= Estimate of Value by the Cost Approach
2
(RCN)
(RCNLD)
You need to understand where your values came from ALL OF THESE COME FROM THE
MARKETWhile we do not have the time or resources to do an
individual sales comparison approach on every piece of land we will use sales to develop a schedule to apply to all land in town
In addition if you ldquoinheritedrdquo an existing land schedule it is important that you understand how this land schedule was derived and how it relates to your current valuation system and the current market
The basis of a land schedule is the market (sales) A full land analysis should be performed to determine what factors affected the sale of each parcel of land and how that information can be used to value each piece of land within a town
We are trying to project what we know (the market the sales information) onto what we do not know (land values for unsold properties)
In order to do this you must become a student of your market
3
Property Value = Bullrsquos Eye
Sales Information
STEP 1-bull Identification-
bull Define the Problem
STEP 2
bull Analysis-bull General Market Factorsbull Specific of sales amp then
subject(s)
STEP 3
bull Valuationbull Projectapply the results of your
analysis onto the subject property or properties
4
Identify what we are to valueWhat is the property we are valuing One parcel or several parcelsIn town assessment work typically we are valuing all
land town wide
How is land described and measured
Land Description Systems-The earliest form of land description was the ldquoboundedrdquo
description which described the property by reference to physical features or adjacent property owners Typical features included trees ridgelines streams and roads Little thought was given to the fact that a fence line or tree line might someday cease to exist
As land became more valuable and disputes over unclear ldquoboundsrdquo became more numerous better methods of description evolved It became a common surveying practice to measure the direction of property lines with compass bearings and the distance with measuring chains or tapes Property described in this manner became known as ldquometes and boundsrdquo
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
5
Metes and Bounds- although this is an older term for a description of property lines- ldquometesrdquo refers to measurement and ldquoboundsrdquo refers to boundaries including features of terrain and other markers
Most deeds that you will find today will have some sort of metes and bounds description although not all are thorough or conclusive
The bearing of a line is the angle between a north-south meridian and the line from north or south toward the east or west
In a metes and bounds description each property line is described with the beginning of each line being the end of the preceding line A proper metes and bounds description should ldquocloserdquo that is the last line should come back to the point of beginning
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
6
80 x 100 = 800020 x 100 = 2000 2 = 10008000 + 1000 = 9000 43560 =
2066 Acreage
80
100
100 If you know the square feet in an acre you can
calculate the square footage of any portion of an acre Conversely if you know the square footage of an area you can calculate the acreage or portion of an acreExample - 85 acres x 43560 sf per acre = 37026 sq ftExample - 37026 sq ft43560 sf per acre = 85 Acre
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
7
MEASUREMENTS (Interesting if not applicable)
1 MILE= 8 FURLONGS1 FURLONG= 660 FEET OR 10 CHAINS1 CHAIN= 66 FEET OR 4 RODS1 ROD= 16 12 FEET OR 25 LINKS1 LINK= 792 INCHES
1 LEAGUE= 3 MILES (OR 25 LABORS)1 LABOR= 17714 ACRES1 VARA= 33 13 INCHES (TEXAS)1 ARPENT= +-1918 FEET (LOUISIANA)1 POLE (AKA PERCH ROD)= 165 FEET1 SMOKE= THE DISTANCE A MAN TRAVELS
ON MULE BACK WHILE SMOKING A CIGARETTE
1 COLPA= OLD IRISH MEASURE OF LAND EQUAL TO THAT WHICH CAN SUPPORT A HORSE OR COW FOR A YEAR-APPROXIMATELY AN IRISH ACRE OF GOOD LAND
1 DAYS WORK= 4 SQUARE PERCHES40 DAYS WORK= 1 ACRE OR THE AMOUNT A TEAM OF OXEN
COULD WORK IN A DAY1 ACRE= 10 SQUARE CHAINS1 ACRE= 43560 SQUARE FEET
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
8
Other types of land identification systems Rectangular Survey System- 6 mile by 6 mile
townships 36 numbered sections and geographically referenced points This system is used in at least 30 states and was started by the government in 1785
Lot amp Block LongitudeLatitude References XY Coordinates Parcel ID Systems- Tie and Coordinate Land
Town wide property maps with integrated GIS can be very valuable in this process
Now that we have identified and defined what we are appraising we will begin our analysis
Acreage accuracy is typically accepted in the following order
a) Deed (If clear measurements and markers are described in deed)
b) Survey done by registered surveyor and recorded in town clerkrsquos office
(where no obvious errors are found)
c) Property map Topographic and flood plain maps are helpful also
12
STEP 2ANALYSIS -GENERAL
Analysis of the sale or sales and the subject property or properties
What are the factors and attributes that will affect the value or values of the property or properties that we are valuing These will be both general and town specific
Land supports all life and stands at the center of human cultures and institutions Wars have been waged over land and the rights to the ownership of land are embedded in the laws of all free nations and defended by their courts
Land uniqueness stems from its fixed supply and immobility Land cannot be manufactured or reproduced Also land is a factor of production required directly or indirectly in the production of all other goods Our most basic resource land is the source of all other wealth
STEP 2ANALYSIS -GENERAL
13
Land Valuation Theory
3Change
Balance
4Anticipation
Competition
Conformity
Constant Use
Contribution
Progressionand
Regression
Substitution
1Supply
and Demand
2Surplus
Productivity
Increasing and
Decreasing Returns
Appraisal Principles relating to land
STEP 2ANALYSIS -GENERAL
14
HIGHEST AND BEST
USE
A Principle of Supply and DemandSupply and demand has special significance in land
valuation because the supply of land is essentially fixed This means that the price of land in a particular area will be determined by demand factors such as population density and rate of growth local employment and income levels the capability of local transportation systems and mortgage interest rates
The supply of land for a particular use may increase or decrease
For example forest and farmland on the periphery of a city may be developed for residential use The increased supply slows price increases
STEP 2ANALYSIS -GENERAL
15
1 Appraisal Principles Relating to Land Schedule Derivation
A Principle of Supply and Demand
The principle of supply and demand explains the large differences in land values between urban and rural areas between different urban areas and even between different neighborhoods in the same urban or rural area No other commodity exhibits such large variations in price
(LOCATION LOCATION LOCATION)
Supply Increase- Demand Steady or Low- Prices Stabilize or Decrease
Supply Prices
DemandSupply Low- Demand High- Prices Increase
DemandPrices
Supply
STEP 2ANALYSIS -GENERAL
16
B Principle of Surplus ProductivityPrinciple of Surplus Productivity states that returns
attributable to land are what remain after returns to labor management and capital are satisfied
The principle of surplus productivity underscores the unique position of land in production and helps explain why land values can vary dramatically If two parcels are used for identical purposes and are similar in their labor management and capital requirements but one because of its location produces greater gross income than the other then the difference in net income will be capitalized entirely into differences in land values
Example Cost to develop and market lots in a subdivision
C Principle of ChangeThe principle of change states that market value is
determined by dynamic economic political and demographic factors such as zoning rent controls interest rates transportation and local economic conditions
Due to the fact that the supply of land is relatively fixed its value is affected by changes in economic political and demographic market forces
Example - Interest rates businesswork 911
STEP 2ANALYSIS -GENERAL
17
D Principle of AnticipationThe principle of anticipation which underlies the income
approach to value states that market value equals the present value of future benefits
What does the person expect to get when buying the property
In the case of vacant commercial land this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land Similarly the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land The principles of anticipation and change underscore the need to estimate market value as of a given date
HIGHEST amp BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND
Highest amp Best Use is the reasonable probable and legal use of vacant land or improved property that is physically possible legally permissible appropriately supported financially feasible and that results in the highest value
STEP 2ANALYSIS -GENERAL
18
Highest amp Best Use
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
You need to understand where your values came from ALL OF THESE COME FROM THE
MARKETWhile we do not have the time or resources to do an
individual sales comparison approach on every piece of land we will use sales to develop a schedule to apply to all land in town
In addition if you ldquoinheritedrdquo an existing land schedule it is important that you understand how this land schedule was derived and how it relates to your current valuation system and the current market
The basis of a land schedule is the market (sales) A full land analysis should be performed to determine what factors affected the sale of each parcel of land and how that information can be used to value each piece of land within a town
We are trying to project what we know (the market the sales information) onto what we do not know (land values for unsold properties)
In order to do this you must become a student of your market
3
Property Value = Bullrsquos Eye
Sales Information
STEP 1-bull Identification-
bull Define the Problem
STEP 2
bull Analysis-bull General Market Factorsbull Specific of sales amp then
subject(s)
STEP 3
bull Valuationbull Projectapply the results of your
analysis onto the subject property or properties
4
Identify what we are to valueWhat is the property we are valuing One parcel or several parcelsIn town assessment work typically we are valuing all
land town wide
How is land described and measured
Land Description Systems-The earliest form of land description was the ldquoboundedrdquo
description which described the property by reference to physical features or adjacent property owners Typical features included trees ridgelines streams and roads Little thought was given to the fact that a fence line or tree line might someday cease to exist
As land became more valuable and disputes over unclear ldquoboundsrdquo became more numerous better methods of description evolved It became a common surveying practice to measure the direction of property lines with compass bearings and the distance with measuring chains or tapes Property described in this manner became known as ldquometes and boundsrdquo
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
5
Metes and Bounds- although this is an older term for a description of property lines- ldquometesrdquo refers to measurement and ldquoboundsrdquo refers to boundaries including features of terrain and other markers
Most deeds that you will find today will have some sort of metes and bounds description although not all are thorough or conclusive
The bearing of a line is the angle between a north-south meridian and the line from north or south toward the east or west
In a metes and bounds description each property line is described with the beginning of each line being the end of the preceding line A proper metes and bounds description should ldquocloserdquo that is the last line should come back to the point of beginning
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
6
80 x 100 = 800020 x 100 = 2000 2 = 10008000 + 1000 = 9000 43560 =
2066 Acreage
80
100
100 If you know the square feet in an acre you can
calculate the square footage of any portion of an acre Conversely if you know the square footage of an area you can calculate the acreage or portion of an acreExample - 85 acres x 43560 sf per acre = 37026 sq ftExample - 37026 sq ft43560 sf per acre = 85 Acre
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
7
MEASUREMENTS (Interesting if not applicable)
1 MILE= 8 FURLONGS1 FURLONG= 660 FEET OR 10 CHAINS1 CHAIN= 66 FEET OR 4 RODS1 ROD= 16 12 FEET OR 25 LINKS1 LINK= 792 INCHES
1 LEAGUE= 3 MILES (OR 25 LABORS)1 LABOR= 17714 ACRES1 VARA= 33 13 INCHES (TEXAS)1 ARPENT= +-1918 FEET (LOUISIANA)1 POLE (AKA PERCH ROD)= 165 FEET1 SMOKE= THE DISTANCE A MAN TRAVELS
ON MULE BACK WHILE SMOKING A CIGARETTE
1 COLPA= OLD IRISH MEASURE OF LAND EQUAL TO THAT WHICH CAN SUPPORT A HORSE OR COW FOR A YEAR-APPROXIMATELY AN IRISH ACRE OF GOOD LAND
1 DAYS WORK= 4 SQUARE PERCHES40 DAYS WORK= 1 ACRE OR THE AMOUNT A TEAM OF OXEN
COULD WORK IN A DAY1 ACRE= 10 SQUARE CHAINS1 ACRE= 43560 SQUARE FEET
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
8
Other types of land identification systems Rectangular Survey System- 6 mile by 6 mile
townships 36 numbered sections and geographically referenced points This system is used in at least 30 states and was started by the government in 1785
Lot amp Block LongitudeLatitude References XY Coordinates Parcel ID Systems- Tie and Coordinate Land
Town wide property maps with integrated GIS can be very valuable in this process
Now that we have identified and defined what we are appraising we will begin our analysis
Acreage accuracy is typically accepted in the following order
a) Deed (If clear measurements and markers are described in deed)
b) Survey done by registered surveyor and recorded in town clerkrsquos office
(where no obvious errors are found)
c) Property map Topographic and flood plain maps are helpful also
12
STEP 2ANALYSIS -GENERAL
Analysis of the sale or sales and the subject property or properties
What are the factors and attributes that will affect the value or values of the property or properties that we are valuing These will be both general and town specific
Land supports all life and stands at the center of human cultures and institutions Wars have been waged over land and the rights to the ownership of land are embedded in the laws of all free nations and defended by their courts
Land uniqueness stems from its fixed supply and immobility Land cannot be manufactured or reproduced Also land is a factor of production required directly or indirectly in the production of all other goods Our most basic resource land is the source of all other wealth
STEP 2ANALYSIS -GENERAL
13
Land Valuation Theory
3Change
Balance
4Anticipation
Competition
Conformity
Constant Use
Contribution
Progressionand
Regression
Substitution
1Supply
and Demand
2Surplus
Productivity
Increasing and
Decreasing Returns
Appraisal Principles relating to land
STEP 2ANALYSIS -GENERAL
14
HIGHEST AND BEST
USE
A Principle of Supply and DemandSupply and demand has special significance in land
valuation because the supply of land is essentially fixed This means that the price of land in a particular area will be determined by demand factors such as population density and rate of growth local employment and income levels the capability of local transportation systems and mortgage interest rates
The supply of land for a particular use may increase or decrease
For example forest and farmland on the periphery of a city may be developed for residential use The increased supply slows price increases
STEP 2ANALYSIS -GENERAL
15
1 Appraisal Principles Relating to Land Schedule Derivation
A Principle of Supply and Demand
The principle of supply and demand explains the large differences in land values between urban and rural areas between different urban areas and even between different neighborhoods in the same urban or rural area No other commodity exhibits such large variations in price
(LOCATION LOCATION LOCATION)
Supply Increase- Demand Steady or Low- Prices Stabilize or Decrease
Supply Prices
DemandSupply Low- Demand High- Prices Increase
DemandPrices
Supply
STEP 2ANALYSIS -GENERAL
16
B Principle of Surplus ProductivityPrinciple of Surplus Productivity states that returns
attributable to land are what remain after returns to labor management and capital are satisfied
The principle of surplus productivity underscores the unique position of land in production and helps explain why land values can vary dramatically If two parcels are used for identical purposes and are similar in their labor management and capital requirements but one because of its location produces greater gross income than the other then the difference in net income will be capitalized entirely into differences in land values
Example Cost to develop and market lots in a subdivision
C Principle of ChangeThe principle of change states that market value is
determined by dynamic economic political and demographic factors such as zoning rent controls interest rates transportation and local economic conditions
Due to the fact that the supply of land is relatively fixed its value is affected by changes in economic political and demographic market forces
Example - Interest rates businesswork 911
STEP 2ANALYSIS -GENERAL
17
D Principle of AnticipationThe principle of anticipation which underlies the income
approach to value states that market value equals the present value of future benefits
What does the person expect to get when buying the property
In the case of vacant commercial land this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land Similarly the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land The principles of anticipation and change underscore the need to estimate market value as of a given date
HIGHEST amp BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND
Highest amp Best Use is the reasonable probable and legal use of vacant land or improved property that is physically possible legally permissible appropriately supported financially feasible and that results in the highest value
STEP 2ANALYSIS -GENERAL
18
Highest amp Best Use
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
STEP 1-bull Identification-
bull Define the Problem
STEP 2
bull Analysis-bull General Market Factorsbull Specific of sales amp then
subject(s)
STEP 3
bull Valuationbull Projectapply the results of your
analysis onto the subject property or properties
4
Identify what we are to valueWhat is the property we are valuing One parcel or several parcelsIn town assessment work typically we are valuing all
land town wide
How is land described and measured
Land Description Systems-The earliest form of land description was the ldquoboundedrdquo
description which described the property by reference to physical features or adjacent property owners Typical features included trees ridgelines streams and roads Little thought was given to the fact that a fence line or tree line might someday cease to exist
As land became more valuable and disputes over unclear ldquoboundsrdquo became more numerous better methods of description evolved It became a common surveying practice to measure the direction of property lines with compass bearings and the distance with measuring chains or tapes Property described in this manner became known as ldquometes and boundsrdquo
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
5
Metes and Bounds- although this is an older term for a description of property lines- ldquometesrdquo refers to measurement and ldquoboundsrdquo refers to boundaries including features of terrain and other markers
Most deeds that you will find today will have some sort of metes and bounds description although not all are thorough or conclusive
The bearing of a line is the angle between a north-south meridian and the line from north or south toward the east or west
In a metes and bounds description each property line is described with the beginning of each line being the end of the preceding line A proper metes and bounds description should ldquocloserdquo that is the last line should come back to the point of beginning
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
6
80 x 100 = 800020 x 100 = 2000 2 = 10008000 + 1000 = 9000 43560 =
2066 Acreage
80
100
100 If you know the square feet in an acre you can
calculate the square footage of any portion of an acre Conversely if you know the square footage of an area you can calculate the acreage or portion of an acreExample - 85 acres x 43560 sf per acre = 37026 sq ftExample - 37026 sq ft43560 sf per acre = 85 Acre
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
7
MEASUREMENTS (Interesting if not applicable)
1 MILE= 8 FURLONGS1 FURLONG= 660 FEET OR 10 CHAINS1 CHAIN= 66 FEET OR 4 RODS1 ROD= 16 12 FEET OR 25 LINKS1 LINK= 792 INCHES
1 LEAGUE= 3 MILES (OR 25 LABORS)1 LABOR= 17714 ACRES1 VARA= 33 13 INCHES (TEXAS)1 ARPENT= +-1918 FEET (LOUISIANA)1 POLE (AKA PERCH ROD)= 165 FEET1 SMOKE= THE DISTANCE A MAN TRAVELS
ON MULE BACK WHILE SMOKING A CIGARETTE
1 COLPA= OLD IRISH MEASURE OF LAND EQUAL TO THAT WHICH CAN SUPPORT A HORSE OR COW FOR A YEAR-APPROXIMATELY AN IRISH ACRE OF GOOD LAND
1 DAYS WORK= 4 SQUARE PERCHES40 DAYS WORK= 1 ACRE OR THE AMOUNT A TEAM OF OXEN
COULD WORK IN A DAY1 ACRE= 10 SQUARE CHAINS1 ACRE= 43560 SQUARE FEET
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
8
Other types of land identification systems Rectangular Survey System- 6 mile by 6 mile
townships 36 numbered sections and geographically referenced points This system is used in at least 30 states and was started by the government in 1785
Lot amp Block LongitudeLatitude References XY Coordinates Parcel ID Systems- Tie and Coordinate Land
Town wide property maps with integrated GIS can be very valuable in this process
Now that we have identified and defined what we are appraising we will begin our analysis
Acreage accuracy is typically accepted in the following order
a) Deed (If clear measurements and markers are described in deed)
b) Survey done by registered surveyor and recorded in town clerkrsquos office
(where no obvious errors are found)
c) Property map Topographic and flood plain maps are helpful also
12
STEP 2ANALYSIS -GENERAL
Analysis of the sale or sales and the subject property or properties
What are the factors and attributes that will affect the value or values of the property or properties that we are valuing These will be both general and town specific
Land supports all life and stands at the center of human cultures and institutions Wars have been waged over land and the rights to the ownership of land are embedded in the laws of all free nations and defended by their courts
Land uniqueness stems from its fixed supply and immobility Land cannot be manufactured or reproduced Also land is a factor of production required directly or indirectly in the production of all other goods Our most basic resource land is the source of all other wealth
STEP 2ANALYSIS -GENERAL
13
Land Valuation Theory
3Change
Balance
4Anticipation
Competition
Conformity
Constant Use
Contribution
Progressionand
Regression
Substitution
1Supply
and Demand
2Surplus
Productivity
Increasing and
Decreasing Returns
Appraisal Principles relating to land
STEP 2ANALYSIS -GENERAL
14
HIGHEST AND BEST
USE
A Principle of Supply and DemandSupply and demand has special significance in land
valuation because the supply of land is essentially fixed This means that the price of land in a particular area will be determined by demand factors such as population density and rate of growth local employment and income levels the capability of local transportation systems and mortgage interest rates
The supply of land for a particular use may increase or decrease
For example forest and farmland on the periphery of a city may be developed for residential use The increased supply slows price increases
STEP 2ANALYSIS -GENERAL
15
1 Appraisal Principles Relating to Land Schedule Derivation
A Principle of Supply and Demand
The principle of supply and demand explains the large differences in land values between urban and rural areas between different urban areas and even between different neighborhoods in the same urban or rural area No other commodity exhibits such large variations in price
(LOCATION LOCATION LOCATION)
Supply Increase- Demand Steady or Low- Prices Stabilize or Decrease
Supply Prices
DemandSupply Low- Demand High- Prices Increase
DemandPrices
Supply
STEP 2ANALYSIS -GENERAL
16
B Principle of Surplus ProductivityPrinciple of Surplus Productivity states that returns
attributable to land are what remain after returns to labor management and capital are satisfied
The principle of surplus productivity underscores the unique position of land in production and helps explain why land values can vary dramatically If two parcels are used for identical purposes and are similar in their labor management and capital requirements but one because of its location produces greater gross income than the other then the difference in net income will be capitalized entirely into differences in land values
Example Cost to develop and market lots in a subdivision
C Principle of ChangeThe principle of change states that market value is
determined by dynamic economic political and demographic factors such as zoning rent controls interest rates transportation and local economic conditions
Due to the fact that the supply of land is relatively fixed its value is affected by changes in economic political and demographic market forces
Example - Interest rates businesswork 911
STEP 2ANALYSIS -GENERAL
17
D Principle of AnticipationThe principle of anticipation which underlies the income
approach to value states that market value equals the present value of future benefits
What does the person expect to get when buying the property
In the case of vacant commercial land this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land Similarly the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land The principles of anticipation and change underscore the need to estimate market value as of a given date
HIGHEST amp BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND
Highest amp Best Use is the reasonable probable and legal use of vacant land or improved property that is physically possible legally permissible appropriately supported financially feasible and that results in the highest value
STEP 2ANALYSIS -GENERAL
18
Highest amp Best Use
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
Identify what we are to valueWhat is the property we are valuing One parcel or several parcelsIn town assessment work typically we are valuing all
land town wide
How is land described and measured
Land Description Systems-The earliest form of land description was the ldquoboundedrdquo
description which described the property by reference to physical features or adjacent property owners Typical features included trees ridgelines streams and roads Little thought was given to the fact that a fence line or tree line might someday cease to exist
As land became more valuable and disputes over unclear ldquoboundsrdquo became more numerous better methods of description evolved It became a common surveying practice to measure the direction of property lines with compass bearings and the distance with measuring chains or tapes Property described in this manner became known as ldquometes and boundsrdquo
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
5
Metes and Bounds- although this is an older term for a description of property lines- ldquometesrdquo refers to measurement and ldquoboundsrdquo refers to boundaries including features of terrain and other markers
Most deeds that you will find today will have some sort of metes and bounds description although not all are thorough or conclusive
The bearing of a line is the angle between a north-south meridian and the line from north or south toward the east or west
In a metes and bounds description each property line is described with the beginning of each line being the end of the preceding line A proper metes and bounds description should ldquocloserdquo that is the last line should come back to the point of beginning
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
6
80 x 100 = 800020 x 100 = 2000 2 = 10008000 + 1000 = 9000 43560 =
2066 Acreage
80
100
100 If you know the square feet in an acre you can
calculate the square footage of any portion of an acre Conversely if you know the square footage of an area you can calculate the acreage or portion of an acreExample - 85 acres x 43560 sf per acre = 37026 sq ftExample - 37026 sq ft43560 sf per acre = 85 Acre
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
7
MEASUREMENTS (Interesting if not applicable)
1 MILE= 8 FURLONGS1 FURLONG= 660 FEET OR 10 CHAINS1 CHAIN= 66 FEET OR 4 RODS1 ROD= 16 12 FEET OR 25 LINKS1 LINK= 792 INCHES
1 LEAGUE= 3 MILES (OR 25 LABORS)1 LABOR= 17714 ACRES1 VARA= 33 13 INCHES (TEXAS)1 ARPENT= +-1918 FEET (LOUISIANA)1 POLE (AKA PERCH ROD)= 165 FEET1 SMOKE= THE DISTANCE A MAN TRAVELS
ON MULE BACK WHILE SMOKING A CIGARETTE
1 COLPA= OLD IRISH MEASURE OF LAND EQUAL TO THAT WHICH CAN SUPPORT A HORSE OR COW FOR A YEAR-APPROXIMATELY AN IRISH ACRE OF GOOD LAND
1 DAYS WORK= 4 SQUARE PERCHES40 DAYS WORK= 1 ACRE OR THE AMOUNT A TEAM OF OXEN
COULD WORK IN A DAY1 ACRE= 10 SQUARE CHAINS1 ACRE= 43560 SQUARE FEET
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
8
Other types of land identification systems Rectangular Survey System- 6 mile by 6 mile
townships 36 numbered sections and geographically referenced points This system is used in at least 30 states and was started by the government in 1785
Lot amp Block LongitudeLatitude References XY Coordinates Parcel ID Systems- Tie and Coordinate Land
Town wide property maps with integrated GIS can be very valuable in this process
Now that we have identified and defined what we are appraising we will begin our analysis
Acreage accuracy is typically accepted in the following order
a) Deed (If clear measurements and markers are described in deed)
b) Survey done by registered surveyor and recorded in town clerkrsquos office
(where no obvious errors are found)
c) Property map Topographic and flood plain maps are helpful also
12
STEP 2ANALYSIS -GENERAL
Analysis of the sale or sales and the subject property or properties
What are the factors and attributes that will affect the value or values of the property or properties that we are valuing These will be both general and town specific
Land supports all life and stands at the center of human cultures and institutions Wars have been waged over land and the rights to the ownership of land are embedded in the laws of all free nations and defended by their courts
Land uniqueness stems from its fixed supply and immobility Land cannot be manufactured or reproduced Also land is a factor of production required directly or indirectly in the production of all other goods Our most basic resource land is the source of all other wealth
STEP 2ANALYSIS -GENERAL
13
Land Valuation Theory
3Change
Balance
4Anticipation
Competition
Conformity
Constant Use
Contribution
Progressionand
Regression
Substitution
1Supply
and Demand
2Surplus
Productivity
Increasing and
Decreasing Returns
Appraisal Principles relating to land
STEP 2ANALYSIS -GENERAL
14
HIGHEST AND BEST
USE
A Principle of Supply and DemandSupply and demand has special significance in land
valuation because the supply of land is essentially fixed This means that the price of land in a particular area will be determined by demand factors such as population density and rate of growth local employment and income levels the capability of local transportation systems and mortgage interest rates
The supply of land for a particular use may increase or decrease
For example forest and farmland on the periphery of a city may be developed for residential use The increased supply slows price increases
STEP 2ANALYSIS -GENERAL
15
1 Appraisal Principles Relating to Land Schedule Derivation
A Principle of Supply and Demand
The principle of supply and demand explains the large differences in land values between urban and rural areas between different urban areas and even between different neighborhoods in the same urban or rural area No other commodity exhibits such large variations in price
(LOCATION LOCATION LOCATION)
Supply Increase- Demand Steady or Low- Prices Stabilize or Decrease
Supply Prices
DemandSupply Low- Demand High- Prices Increase
DemandPrices
Supply
STEP 2ANALYSIS -GENERAL
16
B Principle of Surplus ProductivityPrinciple of Surplus Productivity states that returns
attributable to land are what remain after returns to labor management and capital are satisfied
The principle of surplus productivity underscores the unique position of land in production and helps explain why land values can vary dramatically If two parcels are used for identical purposes and are similar in their labor management and capital requirements but one because of its location produces greater gross income than the other then the difference in net income will be capitalized entirely into differences in land values
Example Cost to develop and market lots in a subdivision
C Principle of ChangeThe principle of change states that market value is
determined by dynamic economic political and demographic factors such as zoning rent controls interest rates transportation and local economic conditions
Due to the fact that the supply of land is relatively fixed its value is affected by changes in economic political and demographic market forces
Example - Interest rates businesswork 911
STEP 2ANALYSIS -GENERAL
17
D Principle of AnticipationThe principle of anticipation which underlies the income
approach to value states that market value equals the present value of future benefits
What does the person expect to get when buying the property
In the case of vacant commercial land this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land Similarly the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land The principles of anticipation and change underscore the need to estimate market value as of a given date
HIGHEST amp BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND
Highest amp Best Use is the reasonable probable and legal use of vacant land or improved property that is physically possible legally permissible appropriately supported financially feasible and that results in the highest value
STEP 2ANALYSIS -GENERAL
18
Highest amp Best Use
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
Metes and Bounds- although this is an older term for a description of property lines- ldquometesrdquo refers to measurement and ldquoboundsrdquo refers to boundaries including features of terrain and other markers
Most deeds that you will find today will have some sort of metes and bounds description although not all are thorough or conclusive
The bearing of a line is the angle between a north-south meridian and the line from north or south toward the east or west
In a metes and bounds description each property line is described with the beginning of each line being the end of the preceding line A proper metes and bounds description should ldquocloserdquo that is the last line should come back to the point of beginning
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
6
80 x 100 = 800020 x 100 = 2000 2 = 10008000 + 1000 = 9000 43560 =
2066 Acreage
80
100
100 If you know the square feet in an acre you can
calculate the square footage of any portion of an acre Conversely if you know the square footage of an area you can calculate the acreage or portion of an acreExample - 85 acres x 43560 sf per acre = 37026 sq ftExample - 37026 sq ft43560 sf per acre = 85 Acre
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
7
MEASUREMENTS (Interesting if not applicable)
1 MILE= 8 FURLONGS1 FURLONG= 660 FEET OR 10 CHAINS1 CHAIN= 66 FEET OR 4 RODS1 ROD= 16 12 FEET OR 25 LINKS1 LINK= 792 INCHES
1 LEAGUE= 3 MILES (OR 25 LABORS)1 LABOR= 17714 ACRES1 VARA= 33 13 INCHES (TEXAS)1 ARPENT= +-1918 FEET (LOUISIANA)1 POLE (AKA PERCH ROD)= 165 FEET1 SMOKE= THE DISTANCE A MAN TRAVELS
ON MULE BACK WHILE SMOKING A CIGARETTE
1 COLPA= OLD IRISH MEASURE OF LAND EQUAL TO THAT WHICH CAN SUPPORT A HORSE OR COW FOR A YEAR-APPROXIMATELY AN IRISH ACRE OF GOOD LAND
1 DAYS WORK= 4 SQUARE PERCHES40 DAYS WORK= 1 ACRE OR THE AMOUNT A TEAM OF OXEN
COULD WORK IN A DAY1 ACRE= 10 SQUARE CHAINS1 ACRE= 43560 SQUARE FEET
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
8
Other types of land identification systems Rectangular Survey System- 6 mile by 6 mile
townships 36 numbered sections and geographically referenced points This system is used in at least 30 states and was started by the government in 1785
Lot amp Block LongitudeLatitude References XY Coordinates Parcel ID Systems- Tie and Coordinate Land
Town wide property maps with integrated GIS can be very valuable in this process
Now that we have identified and defined what we are appraising we will begin our analysis
Acreage accuracy is typically accepted in the following order
a) Deed (If clear measurements and markers are described in deed)
b) Survey done by registered surveyor and recorded in town clerkrsquos office
(where no obvious errors are found)
c) Property map Topographic and flood plain maps are helpful also
12
STEP 2ANALYSIS -GENERAL
Analysis of the sale or sales and the subject property or properties
What are the factors and attributes that will affect the value or values of the property or properties that we are valuing These will be both general and town specific
Land supports all life and stands at the center of human cultures and institutions Wars have been waged over land and the rights to the ownership of land are embedded in the laws of all free nations and defended by their courts
Land uniqueness stems from its fixed supply and immobility Land cannot be manufactured or reproduced Also land is a factor of production required directly or indirectly in the production of all other goods Our most basic resource land is the source of all other wealth
STEP 2ANALYSIS -GENERAL
13
Land Valuation Theory
3Change
Balance
4Anticipation
Competition
Conformity
Constant Use
Contribution
Progressionand
Regression
Substitution
1Supply
and Demand
2Surplus
Productivity
Increasing and
Decreasing Returns
Appraisal Principles relating to land
STEP 2ANALYSIS -GENERAL
14
HIGHEST AND BEST
USE
A Principle of Supply and DemandSupply and demand has special significance in land
valuation because the supply of land is essentially fixed This means that the price of land in a particular area will be determined by demand factors such as population density and rate of growth local employment and income levels the capability of local transportation systems and mortgage interest rates
The supply of land for a particular use may increase or decrease
For example forest and farmland on the periphery of a city may be developed for residential use The increased supply slows price increases
STEP 2ANALYSIS -GENERAL
15
1 Appraisal Principles Relating to Land Schedule Derivation
A Principle of Supply and Demand
The principle of supply and demand explains the large differences in land values between urban and rural areas between different urban areas and even between different neighborhoods in the same urban or rural area No other commodity exhibits such large variations in price
(LOCATION LOCATION LOCATION)
Supply Increase- Demand Steady or Low- Prices Stabilize or Decrease
Supply Prices
DemandSupply Low- Demand High- Prices Increase
DemandPrices
Supply
STEP 2ANALYSIS -GENERAL
16
B Principle of Surplus ProductivityPrinciple of Surplus Productivity states that returns
attributable to land are what remain after returns to labor management and capital are satisfied
The principle of surplus productivity underscores the unique position of land in production and helps explain why land values can vary dramatically If two parcels are used for identical purposes and are similar in their labor management and capital requirements but one because of its location produces greater gross income than the other then the difference in net income will be capitalized entirely into differences in land values
Example Cost to develop and market lots in a subdivision
C Principle of ChangeThe principle of change states that market value is
determined by dynamic economic political and demographic factors such as zoning rent controls interest rates transportation and local economic conditions
Due to the fact that the supply of land is relatively fixed its value is affected by changes in economic political and demographic market forces
Example - Interest rates businesswork 911
STEP 2ANALYSIS -GENERAL
17
D Principle of AnticipationThe principle of anticipation which underlies the income
approach to value states that market value equals the present value of future benefits
What does the person expect to get when buying the property
In the case of vacant commercial land this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land Similarly the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land The principles of anticipation and change underscore the need to estimate market value as of a given date
HIGHEST amp BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND
Highest amp Best Use is the reasonable probable and legal use of vacant land or improved property that is physically possible legally permissible appropriately supported financially feasible and that results in the highest value
STEP 2ANALYSIS -GENERAL
18
Highest amp Best Use
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
80 x 100 = 800020 x 100 = 2000 2 = 10008000 + 1000 = 9000 43560 =
2066 Acreage
80
100
100 If you know the square feet in an acre you can
calculate the square footage of any portion of an acre Conversely if you know the square footage of an area you can calculate the acreage or portion of an acreExample - 85 acres x 43560 sf per acre = 37026 sq ftExample - 37026 sq ft43560 sf per acre = 85 Acre
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
7
MEASUREMENTS (Interesting if not applicable)
1 MILE= 8 FURLONGS1 FURLONG= 660 FEET OR 10 CHAINS1 CHAIN= 66 FEET OR 4 RODS1 ROD= 16 12 FEET OR 25 LINKS1 LINK= 792 INCHES
1 LEAGUE= 3 MILES (OR 25 LABORS)1 LABOR= 17714 ACRES1 VARA= 33 13 INCHES (TEXAS)1 ARPENT= +-1918 FEET (LOUISIANA)1 POLE (AKA PERCH ROD)= 165 FEET1 SMOKE= THE DISTANCE A MAN TRAVELS
ON MULE BACK WHILE SMOKING A CIGARETTE
1 COLPA= OLD IRISH MEASURE OF LAND EQUAL TO THAT WHICH CAN SUPPORT A HORSE OR COW FOR A YEAR-APPROXIMATELY AN IRISH ACRE OF GOOD LAND
1 DAYS WORK= 4 SQUARE PERCHES40 DAYS WORK= 1 ACRE OR THE AMOUNT A TEAM OF OXEN
COULD WORK IN A DAY1 ACRE= 10 SQUARE CHAINS1 ACRE= 43560 SQUARE FEET
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
8
Other types of land identification systems Rectangular Survey System- 6 mile by 6 mile
townships 36 numbered sections and geographically referenced points This system is used in at least 30 states and was started by the government in 1785
Lot amp Block LongitudeLatitude References XY Coordinates Parcel ID Systems- Tie and Coordinate Land
Town wide property maps with integrated GIS can be very valuable in this process
Now that we have identified and defined what we are appraising we will begin our analysis
Acreage accuracy is typically accepted in the following order
a) Deed (If clear measurements and markers are described in deed)
b) Survey done by registered surveyor and recorded in town clerkrsquos office
(where no obvious errors are found)
c) Property map Topographic and flood plain maps are helpful also
12
STEP 2ANALYSIS -GENERAL
Analysis of the sale or sales and the subject property or properties
What are the factors and attributes that will affect the value or values of the property or properties that we are valuing These will be both general and town specific
Land supports all life and stands at the center of human cultures and institutions Wars have been waged over land and the rights to the ownership of land are embedded in the laws of all free nations and defended by their courts
Land uniqueness stems from its fixed supply and immobility Land cannot be manufactured or reproduced Also land is a factor of production required directly or indirectly in the production of all other goods Our most basic resource land is the source of all other wealth
STEP 2ANALYSIS -GENERAL
13
Land Valuation Theory
3Change
Balance
4Anticipation
Competition
Conformity
Constant Use
Contribution
Progressionand
Regression
Substitution
1Supply
and Demand
2Surplus
Productivity
Increasing and
Decreasing Returns
Appraisal Principles relating to land
STEP 2ANALYSIS -GENERAL
14
HIGHEST AND BEST
USE
A Principle of Supply and DemandSupply and demand has special significance in land
valuation because the supply of land is essentially fixed This means that the price of land in a particular area will be determined by demand factors such as population density and rate of growth local employment and income levels the capability of local transportation systems and mortgage interest rates
The supply of land for a particular use may increase or decrease
For example forest and farmland on the periphery of a city may be developed for residential use The increased supply slows price increases
STEP 2ANALYSIS -GENERAL
15
1 Appraisal Principles Relating to Land Schedule Derivation
A Principle of Supply and Demand
The principle of supply and demand explains the large differences in land values between urban and rural areas between different urban areas and even between different neighborhoods in the same urban or rural area No other commodity exhibits such large variations in price
(LOCATION LOCATION LOCATION)
Supply Increase- Demand Steady or Low- Prices Stabilize or Decrease
Supply Prices
DemandSupply Low- Demand High- Prices Increase
DemandPrices
Supply
STEP 2ANALYSIS -GENERAL
16
B Principle of Surplus ProductivityPrinciple of Surplus Productivity states that returns
attributable to land are what remain after returns to labor management and capital are satisfied
The principle of surplus productivity underscores the unique position of land in production and helps explain why land values can vary dramatically If two parcels are used for identical purposes and are similar in their labor management and capital requirements but one because of its location produces greater gross income than the other then the difference in net income will be capitalized entirely into differences in land values
Example Cost to develop and market lots in a subdivision
C Principle of ChangeThe principle of change states that market value is
determined by dynamic economic political and demographic factors such as zoning rent controls interest rates transportation and local economic conditions
Due to the fact that the supply of land is relatively fixed its value is affected by changes in economic political and demographic market forces
Example - Interest rates businesswork 911
STEP 2ANALYSIS -GENERAL
17
D Principle of AnticipationThe principle of anticipation which underlies the income
approach to value states that market value equals the present value of future benefits
What does the person expect to get when buying the property
In the case of vacant commercial land this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land Similarly the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land The principles of anticipation and change underscore the need to estimate market value as of a given date
HIGHEST amp BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND
Highest amp Best Use is the reasonable probable and legal use of vacant land or improved property that is physically possible legally permissible appropriately supported financially feasible and that results in the highest value
STEP 2ANALYSIS -GENERAL
18
Highest amp Best Use
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
1 LEAGUE= 3 MILES (OR 25 LABORS)1 LABOR= 17714 ACRES1 VARA= 33 13 INCHES (TEXAS)1 ARPENT= +-1918 FEET (LOUISIANA)1 POLE (AKA PERCH ROD)= 165 FEET1 SMOKE= THE DISTANCE A MAN TRAVELS
ON MULE BACK WHILE SMOKING A CIGARETTE
1 COLPA= OLD IRISH MEASURE OF LAND EQUAL TO THAT WHICH CAN SUPPORT A HORSE OR COW FOR A YEAR-APPROXIMATELY AN IRISH ACRE OF GOOD LAND
1 DAYS WORK= 4 SQUARE PERCHES40 DAYS WORK= 1 ACRE OR THE AMOUNT A TEAM OF OXEN
COULD WORK IN A DAY1 ACRE= 10 SQUARE CHAINS1 ACRE= 43560 SQUARE FEET
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
8
Other types of land identification systems Rectangular Survey System- 6 mile by 6 mile
townships 36 numbered sections and geographically referenced points This system is used in at least 30 states and was started by the government in 1785
Lot amp Block LongitudeLatitude References XY Coordinates Parcel ID Systems- Tie and Coordinate Land
Town wide property maps with integrated GIS can be very valuable in this process
Now that we have identified and defined what we are appraising we will begin our analysis
Acreage accuracy is typically accepted in the following order
a) Deed (If clear measurements and markers are described in deed)
b) Survey done by registered surveyor and recorded in town clerkrsquos office
(where no obvious errors are found)
c) Property map Topographic and flood plain maps are helpful also
12
STEP 2ANALYSIS -GENERAL
Analysis of the sale or sales and the subject property or properties
What are the factors and attributes that will affect the value or values of the property or properties that we are valuing These will be both general and town specific
Land supports all life and stands at the center of human cultures and institutions Wars have been waged over land and the rights to the ownership of land are embedded in the laws of all free nations and defended by their courts
Land uniqueness stems from its fixed supply and immobility Land cannot be manufactured or reproduced Also land is a factor of production required directly or indirectly in the production of all other goods Our most basic resource land is the source of all other wealth
STEP 2ANALYSIS -GENERAL
13
Land Valuation Theory
3Change
Balance
4Anticipation
Competition
Conformity
Constant Use
Contribution
Progressionand
Regression
Substitution
1Supply
and Demand
2Surplus
Productivity
Increasing and
Decreasing Returns
Appraisal Principles relating to land
STEP 2ANALYSIS -GENERAL
14
HIGHEST AND BEST
USE
A Principle of Supply and DemandSupply and demand has special significance in land
valuation because the supply of land is essentially fixed This means that the price of land in a particular area will be determined by demand factors such as population density and rate of growth local employment and income levels the capability of local transportation systems and mortgage interest rates
The supply of land for a particular use may increase or decrease
For example forest and farmland on the periphery of a city may be developed for residential use The increased supply slows price increases
STEP 2ANALYSIS -GENERAL
15
1 Appraisal Principles Relating to Land Schedule Derivation
A Principle of Supply and Demand
The principle of supply and demand explains the large differences in land values between urban and rural areas between different urban areas and even between different neighborhoods in the same urban or rural area No other commodity exhibits such large variations in price
(LOCATION LOCATION LOCATION)
Supply Increase- Demand Steady or Low- Prices Stabilize or Decrease
Supply Prices
DemandSupply Low- Demand High- Prices Increase
DemandPrices
Supply
STEP 2ANALYSIS -GENERAL
16
B Principle of Surplus ProductivityPrinciple of Surplus Productivity states that returns
attributable to land are what remain after returns to labor management and capital are satisfied
The principle of surplus productivity underscores the unique position of land in production and helps explain why land values can vary dramatically If two parcels are used for identical purposes and are similar in their labor management and capital requirements but one because of its location produces greater gross income than the other then the difference in net income will be capitalized entirely into differences in land values
Example Cost to develop and market lots in a subdivision
C Principle of ChangeThe principle of change states that market value is
determined by dynamic economic political and demographic factors such as zoning rent controls interest rates transportation and local economic conditions
Due to the fact that the supply of land is relatively fixed its value is affected by changes in economic political and demographic market forces
Example - Interest rates businesswork 911
STEP 2ANALYSIS -GENERAL
17
D Principle of AnticipationThe principle of anticipation which underlies the income
approach to value states that market value equals the present value of future benefits
What does the person expect to get when buying the property
In the case of vacant commercial land this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land Similarly the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land The principles of anticipation and change underscore the need to estimate market value as of a given date
HIGHEST amp BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND
Highest amp Best Use is the reasonable probable and legal use of vacant land or improved property that is physically possible legally permissible appropriately supported financially feasible and that results in the highest value
STEP 2ANALYSIS -GENERAL
18
Highest amp Best Use
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
Other types of land identification systems Rectangular Survey System- 6 mile by 6 mile
townships 36 numbered sections and geographically referenced points This system is used in at least 30 states and was started by the government in 1785
Lot amp Block LongitudeLatitude References XY Coordinates Parcel ID Systems- Tie and Coordinate Land
Town wide property maps with integrated GIS can be very valuable in this process
Now that we have identified and defined what we are appraising we will begin our analysis
Acreage accuracy is typically accepted in the following order
a) Deed (If clear measurements and markers are described in deed)
b) Survey done by registered surveyor and recorded in town clerkrsquos office
(where no obvious errors are found)
c) Property map Topographic and flood plain maps are helpful also
12
STEP 2ANALYSIS -GENERAL
Analysis of the sale or sales and the subject property or properties
What are the factors and attributes that will affect the value or values of the property or properties that we are valuing These will be both general and town specific
Land supports all life and stands at the center of human cultures and institutions Wars have been waged over land and the rights to the ownership of land are embedded in the laws of all free nations and defended by their courts
Land uniqueness stems from its fixed supply and immobility Land cannot be manufactured or reproduced Also land is a factor of production required directly or indirectly in the production of all other goods Our most basic resource land is the source of all other wealth
STEP 2ANALYSIS -GENERAL
13
Land Valuation Theory
3Change
Balance
4Anticipation
Competition
Conformity
Constant Use
Contribution
Progressionand
Regression
Substitution
1Supply
and Demand
2Surplus
Productivity
Increasing and
Decreasing Returns
Appraisal Principles relating to land
STEP 2ANALYSIS -GENERAL
14
HIGHEST AND BEST
USE
A Principle of Supply and DemandSupply and demand has special significance in land
valuation because the supply of land is essentially fixed This means that the price of land in a particular area will be determined by demand factors such as population density and rate of growth local employment and income levels the capability of local transportation systems and mortgage interest rates
The supply of land for a particular use may increase or decrease
For example forest and farmland on the periphery of a city may be developed for residential use The increased supply slows price increases
STEP 2ANALYSIS -GENERAL
15
1 Appraisal Principles Relating to Land Schedule Derivation
A Principle of Supply and Demand
The principle of supply and demand explains the large differences in land values between urban and rural areas between different urban areas and even between different neighborhoods in the same urban or rural area No other commodity exhibits such large variations in price
(LOCATION LOCATION LOCATION)
Supply Increase- Demand Steady or Low- Prices Stabilize or Decrease
Supply Prices
DemandSupply Low- Demand High- Prices Increase
DemandPrices
Supply
STEP 2ANALYSIS -GENERAL
16
B Principle of Surplus ProductivityPrinciple of Surplus Productivity states that returns
attributable to land are what remain after returns to labor management and capital are satisfied
The principle of surplus productivity underscores the unique position of land in production and helps explain why land values can vary dramatically If two parcels are used for identical purposes and are similar in their labor management and capital requirements but one because of its location produces greater gross income than the other then the difference in net income will be capitalized entirely into differences in land values
Example Cost to develop and market lots in a subdivision
C Principle of ChangeThe principle of change states that market value is
determined by dynamic economic political and demographic factors such as zoning rent controls interest rates transportation and local economic conditions
Due to the fact that the supply of land is relatively fixed its value is affected by changes in economic political and demographic market forces
Example - Interest rates businesswork 911
STEP 2ANALYSIS -GENERAL
17
D Principle of AnticipationThe principle of anticipation which underlies the income
approach to value states that market value equals the present value of future benefits
What does the person expect to get when buying the property
In the case of vacant commercial land this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land Similarly the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land The principles of anticipation and change underscore the need to estimate market value as of a given date
HIGHEST amp BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND
Highest amp Best Use is the reasonable probable and legal use of vacant land or improved property that is physically possible legally permissible appropriately supported financially feasible and that results in the highest value
STEP 2ANALYSIS -GENERAL
18
Highest amp Best Use
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Town wide property maps with integrated GIS can be very valuable in this process
Now that we have identified and defined what we are appraising we will begin our analysis
Acreage accuracy is typically accepted in the following order
a) Deed (If clear measurements and markers are described in deed)
b) Survey done by registered surveyor and recorded in town clerkrsquos office
(where no obvious errors are found)
c) Property map Topographic and flood plain maps are helpful also
12
STEP 2ANALYSIS -GENERAL
Analysis of the sale or sales and the subject property or properties
What are the factors and attributes that will affect the value or values of the property or properties that we are valuing These will be both general and town specific
Land supports all life and stands at the center of human cultures and institutions Wars have been waged over land and the rights to the ownership of land are embedded in the laws of all free nations and defended by their courts
Land uniqueness stems from its fixed supply and immobility Land cannot be manufactured or reproduced Also land is a factor of production required directly or indirectly in the production of all other goods Our most basic resource land is the source of all other wealth
STEP 2ANALYSIS -GENERAL
13
Land Valuation Theory
3Change
Balance
4Anticipation
Competition
Conformity
Constant Use
Contribution
Progressionand
Regression
Substitution
1Supply
and Demand
2Surplus
Productivity
Increasing and
Decreasing Returns
Appraisal Principles relating to land
STEP 2ANALYSIS -GENERAL
14
HIGHEST AND BEST
USE
A Principle of Supply and DemandSupply and demand has special significance in land
valuation because the supply of land is essentially fixed This means that the price of land in a particular area will be determined by demand factors such as population density and rate of growth local employment and income levels the capability of local transportation systems and mortgage interest rates
The supply of land for a particular use may increase or decrease
For example forest and farmland on the periphery of a city may be developed for residential use The increased supply slows price increases
STEP 2ANALYSIS -GENERAL
15
1 Appraisal Principles Relating to Land Schedule Derivation
A Principle of Supply and Demand
The principle of supply and demand explains the large differences in land values between urban and rural areas between different urban areas and even between different neighborhoods in the same urban or rural area No other commodity exhibits such large variations in price
(LOCATION LOCATION LOCATION)
Supply Increase- Demand Steady or Low- Prices Stabilize or Decrease
Supply Prices
DemandSupply Low- Demand High- Prices Increase
DemandPrices
Supply
STEP 2ANALYSIS -GENERAL
16
B Principle of Surplus ProductivityPrinciple of Surplus Productivity states that returns
attributable to land are what remain after returns to labor management and capital are satisfied
The principle of surplus productivity underscores the unique position of land in production and helps explain why land values can vary dramatically If two parcels are used for identical purposes and are similar in their labor management and capital requirements but one because of its location produces greater gross income than the other then the difference in net income will be capitalized entirely into differences in land values
Example Cost to develop and market lots in a subdivision
C Principle of ChangeThe principle of change states that market value is
determined by dynamic economic political and demographic factors such as zoning rent controls interest rates transportation and local economic conditions
Due to the fact that the supply of land is relatively fixed its value is affected by changes in economic political and demographic market forces
Example - Interest rates businesswork 911
STEP 2ANALYSIS -GENERAL
17
D Principle of AnticipationThe principle of anticipation which underlies the income
approach to value states that market value equals the present value of future benefits
What does the person expect to get when buying the property
In the case of vacant commercial land this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land Similarly the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land The principles of anticipation and change underscore the need to estimate market value as of a given date
HIGHEST amp BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND
Highest amp Best Use is the reasonable probable and legal use of vacant land or improved property that is physically possible legally permissible appropriately supported financially feasible and that results in the highest value
STEP 2ANALYSIS -GENERAL
18
Highest amp Best Use
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
STEP 1IDENTIFICATION
DEFINE THE PROBLEM-
11
Town wide property maps with integrated GIS can be very valuable in this process
Now that we have identified and defined what we are appraising we will begin our analysis
Acreage accuracy is typically accepted in the following order
a) Deed (If clear measurements and markers are described in deed)
b) Survey done by registered surveyor and recorded in town clerkrsquos office
(where no obvious errors are found)
c) Property map Topographic and flood plain maps are helpful also
12
STEP 2ANALYSIS -GENERAL
Analysis of the sale or sales and the subject property or properties
What are the factors and attributes that will affect the value or values of the property or properties that we are valuing These will be both general and town specific
Land supports all life and stands at the center of human cultures and institutions Wars have been waged over land and the rights to the ownership of land are embedded in the laws of all free nations and defended by their courts
Land uniqueness stems from its fixed supply and immobility Land cannot be manufactured or reproduced Also land is a factor of production required directly or indirectly in the production of all other goods Our most basic resource land is the source of all other wealth
STEP 2ANALYSIS -GENERAL
13
Land Valuation Theory
3Change
Balance
4Anticipation
Competition
Conformity
Constant Use
Contribution
Progressionand
Regression
Substitution
1Supply
and Demand
2Surplus
Productivity
Increasing and
Decreasing Returns
Appraisal Principles relating to land
STEP 2ANALYSIS -GENERAL
14
HIGHEST AND BEST
USE
A Principle of Supply and DemandSupply and demand has special significance in land
valuation because the supply of land is essentially fixed This means that the price of land in a particular area will be determined by demand factors such as population density and rate of growth local employment and income levels the capability of local transportation systems and mortgage interest rates
The supply of land for a particular use may increase or decrease
For example forest and farmland on the periphery of a city may be developed for residential use The increased supply slows price increases
STEP 2ANALYSIS -GENERAL
15
1 Appraisal Principles Relating to Land Schedule Derivation
A Principle of Supply and Demand
The principle of supply and demand explains the large differences in land values between urban and rural areas between different urban areas and even between different neighborhoods in the same urban or rural area No other commodity exhibits such large variations in price
(LOCATION LOCATION LOCATION)
Supply Increase- Demand Steady or Low- Prices Stabilize or Decrease
Supply Prices
DemandSupply Low- Demand High- Prices Increase
DemandPrices
Supply
STEP 2ANALYSIS -GENERAL
16
B Principle of Surplus ProductivityPrinciple of Surplus Productivity states that returns
attributable to land are what remain after returns to labor management and capital are satisfied
The principle of surplus productivity underscores the unique position of land in production and helps explain why land values can vary dramatically If two parcels are used for identical purposes and are similar in their labor management and capital requirements but one because of its location produces greater gross income than the other then the difference in net income will be capitalized entirely into differences in land values
Example Cost to develop and market lots in a subdivision
C Principle of ChangeThe principle of change states that market value is
determined by dynamic economic political and demographic factors such as zoning rent controls interest rates transportation and local economic conditions
Due to the fact that the supply of land is relatively fixed its value is affected by changes in economic political and demographic market forces
Example - Interest rates businesswork 911
STEP 2ANALYSIS -GENERAL
17
D Principle of AnticipationThe principle of anticipation which underlies the income
approach to value states that market value equals the present value of future benefits
What does the person expect to get when buying the property
In the case of vacant commercial land this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land Similarly the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land The principles of anticipation and change underscore the need to estimate market value as of a given date
HIGHEST amp BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND
Highest amp Best Use is the reasonable probable and legal use of vacant land or improved property that is physically possible legally permissible appropriately supported financially feasible and that results in the highest value
STEP 2ANALYSIS -GENERAL
18
Highest amp Best Use
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
Acreage accuracy is typically accepted in the following order
a) Deed (If clear measurements and markers are described in deed)
b) Survey done by registered surveyor and recorded in town clerkrsquos office
(where no obvious errors are found)
c) Property map Topographic and flood plain maps are helpful also
12
STEP 2ANALYSIS -GENERAL
Analysis of the sale or sales and the subject property or properties
What are the factors and attributes that will affect the value or values of the property or properties that we are valuing These will be both general and town specific
Land supports all life and stands at the center of human cultures and institutions Wars have been waged over land and the rights to the ownership of land are embedded in the laws of all free nations and defended by their courts
Land uniqueness stems from its fixed supply and immobility Land cannot be manufactured or reproduced Also land is a factor of production required directly or indirectly in the production of all other goods Our most basic resource land is the source of all other wealth
STEP 2ANALYSIS -GENERAL
13
Land Valuation Theory
3Change
Balance
4Anticipation
Competition
Conformity
Constant Use
Contribution
Progressionand
Regression
Substitution
1Supply
and Demand
2Surplus
Productivity
Increasing and
Decreasing Returns
Appraisal Principles relating to land
STEP 2ANALYSIS -GENERAL
14
HIGHEST AND BEST
USE
A Principle of Supply and DemandSupply and demand has special significance in land
valuation because the supply of land is essentially fixed This means that the price of land in a particular area will be determined by demand factors such as population density and rate of growth local employment and income levels the capability of local transportation systems and mortgage interest rates
The supply of land for a particular use may increase or decrease
For example forest and farmland on the periphery of a city may be developed for residential use The increased supply slows price increases
STEP 2ANALYSIS -GENERAL
15
1 Appraisal Principles Relating to Land Schedule Derivation
A Principle of Supply and Demand
The principle of supply and demand explains the large differences in land values between urban and rural areas between different urban areas and even between different neighborhoods in the same urban or rural area No other commodity exhibits such large variations in price
(LOCATION LOCATION LOCATION)
Supply Increase- Demand Steady or Low- Prices Stabilize or Decrease
Supply Prices
DemandSupply Low- Demand High- Prices Increase
DemandPrices
Supply
STEP 2ANALYSIS -GENERAL
16
B Principle of Surplus ProductivityPrinciple of Surplus Productivity states that returns
attributable to land are what remain after returns to labor management and capital are satisfied
The principle of surplus productivity underscores the unique position of land in production and helps explain why land values can vary dramatically If two parcels are used for identical purposes and are similar in their labor management and capital requirements but one because of its location produces greater gross income than the other then the difference in net income will be capitalized entirely into differences in land values
Example Cost to develop and market lots in a subdivision
C Principle of ChangeThe principle of change states that market value is
determined by dynamic economic political and demographic factors such as zoning rent controls interest rates transportation and local economic conditions
Due to the fact that the supply of land is relatively fixed its value is affected by changes in economic political and demographic market forces
Example - Interest rates businesswork 911
STEP 2ANALYSIS -GENERAL
17
D Principle of AnticipationThe principle of anticipation which underlies the income
approach to value states that market value equals the present value of future benefits
What does the person expect to get when buying the property
In the case of vacant commercial land this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land Similarly the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land The principles of anticipation and change underscore the need to estimate market value as of a given date
HIGHEST amp BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND
Highest amp Best Use is the reasonable probable and legal use of vacant land or improved property that is physically possible legally permissible appropriately supported financially feasible and that results in the highest value
STEP 2ANALYSIS -GENERAL
18
Highest amp Best Use
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
Analysis of the sale or sales and the subject property or properties
What are the factors and attributes that will affect the value or values of the property or properties that we are valuing These will be both general and town specific
Land supports all life and stands at the center of human cultures and institutions Wars have been waged over land and the rights to the ownership of land are embedded in the laws of all free nations and defended by their courts
Land uniqueness stems from its fixed supply and immobility Land cannot be manufactured or reproduced Also land is a factor of production required directly or indirectly in the production of all other goods Our most basic resource land is the source of all other wealth
STEP 2ANALYSIS -GENERAL
13
Land Valuation Theory
3Change
Balance
4Anticipation
Competition
Conformity
Constant Use
Contribution
Progressionand
Regression
Substitution
1Supply
and Demand
2Surplus
Productivity
Increasing and
Decreasing Returns
Appraisal Principles relating to land
STEP 2ANALYSIS -GENERAL
14
HIGHEST AND BEST
USE
A Principle of Supply and DemandSupply and demand has special significance in land
valuation because the supply of land is essentially fixed This means that the price of land in a particular area will be determined by demand factors such as population density and rate of growth local employment and income levels the capability of local transportation systems and mortgage interest rates
The supply of land for a particular use may increase or decrease
For example forest and farmland on the periphery of a city may be developed for residential use The increased supply slows price increases
STEP 2ANALYSIS -GENERAL
15
1 Appraisal Principles Relating to Land Schedule Derivation
A Principle of Supply and Demand
The principle of supply and demand explains the large differences in land values between urban and rural areas between different urban areas and even between different neighborhoods in the same urban or rural area No other commodity exhibits such large variations in price
(LOCATION LOCATION LOCATION)
Supply Increase- Demand Steady or Low- Prices Stabilize or Decrease
Supply Prices
DemandSupply Low- Demand High- Prices Increase
DemandPrices
Supply
STEP 2ANALYSIS -GENERAL
16
B Principle of Surplus ProductivityPrinciple of Surplus Productivity states that returns
attributable to land are what remain after returns to labor management and capital are satisfied
The principle of surplus productivity underscores the unique position of land in production and helps explain why land values can vary dramatically If two parcels are used for identical purposes and are similar in their labor management and capital requirements but one because of its location produces greater gross income than the other then the difference in net income will be capitalized entirely into differences in land values
Example Cost to develop and market lots in a subdivision
C Principle of ChangeThe principle of change states that market value is
determined by dynamic economic political and demographic factors such as zoning rent controls interest rates transportation and local economic conditions
Due to the fact that the supply of land is relatively fixed its value is affected by changes in economic political and demographic market forces
Example - Interest rates businesswork 911
STEP 2ANALYSIS -GENERAL
17
D Principle of AnticipationThe principle of anticipation which underlies the income
approach to value states that market value equals the present value of future benefits
What does the person expect to get when buying the property
In the case of vacant commercial land this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land Similarly the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land The principles of anticipation and change underscore the need to estimate market value as of a given date
HIGHEST amp BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND
Highest amp Best Use is the reasonable probable and legal use of vacant land or improved property that is physically possible legally permissible appropriately supported financially feasible and that results in the highest value
STEP 2ANALYSIS -GENERAL
18
Highest amp Best Use
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
3Change
Balance
4Anticipation
Competition
Conformity
Constant Use
Contribution
Progressionand
Regression
Substitution
1Supply
and Demand
2Surplus
Productivity
Increasing and
Decreasing Returns
Appraisal Principles relating to land
STEP 2ANALYSIS -GENERAL
14
HIGHEST AND BEST
USE
A Principle of Supply and DemandSupply and demand has special significance in land
valuation because the supply of land is essentially fixed This means that the price of land in a particular area will be determined by demand factors such as population density and rate of growth local employment and income levels the capability of local transportation systems and mortgage interest rates
The supply of land for a particular use may increase or decrease
For example forest and farmland on the periphery of a city may be developed for residential use The increased supply slows price increases
STEP 2ANALYSIS -GENERAL
15
1 Appraisal Principles Relating to Land Schedule Derivation
A Principle of Supply and Demand
The principle of supply and demand explains the large differences in land values between urban and rural areas between different urban areas and even between different neighborhoods in the same urban or rural area No other commodity exhibits such large variations in price
(LOCATION LOCATION LOCATION)
Supply Increase- Demand Steady or Low- Prices Stabilize or Decrease
Supply Prices
DemandSupply Low- Demand High- Prices Increase
DemandPrices
Supply
STEP 2ANALYSIS -GENERAL
16
B Principle of Surplus ProductivityPrinciple of Surplus Productivity states that returns
attributable to land are what remain after returns to labor management and capital are satisfied
The principle of surplus productivity underscores the unique position of land in production and helps explain why land values can vary dramatically If two parcels are used for identical purposes and are similar in their labor management and capital requirements but one because of its location produces greater gross income than the other then the difference in net income will be capitalized entirely into differences in land values
Example Cost to develop and market lots in a subdivision
C Principle of ChangeThe principle of change states that market value is
determined by dynamic economic political and demographic factors such as zoning rent controls interest rates transportation and local economic conditions
Due to the fact that the supply of land is relatively fixed its value is affected by changes in economic political and demographic market forces
Example - Interest rates businesswork 911
STEP 2ANALYSIS -GENERAL
17
D Principle of AnticipationThe principle of anticipation which underlies the income
approach to value states that market value equals the present value of future benefits
What does the person expect to get when buying the property
In the case of vacant commercial land this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land Similarly the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land The principles of anticipation and change underscore the need to estimate market value as of a given date
HIGHEST amp BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND
Highest amp Best Use is the reasonable probable and legal use of vacant land or improved property that is physically possible legally permissible appropriately supported financially feasible and that results in the highest value
STEP 2ANALYSIS -GENERAL
18
Highest amp Best Use
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
A Principle of Supply and DemandSupply and demand has special significance in land
valuation because the supply of land is essentially fixed This means that the price of land in a particular area will be determined by demand factors such as population density and rate of growth local employment and income levels the capability of local transportation systems and mortgage interest rates
The supply of land for a particular use may increase or decrease
For example forest and farmland on the periphery of a city may be developed for residential use The increased supply slows price increases
STEP 2ANALYSIS -GENERAL
15
1 Appraisal Principles Relating to Land Schedule Derivation
A Principle of Supply and Demand
The principle of supply and demand explains the large differences in land values between urban and rural areas between different urban areas and even between different neighborhoods in the same urban or rural area No other commodity exhibits such large variations in price
(LOCATION LOCATION LOCATION)
Supply Increase- Demand Steady or Low- Prices Stabilize or Decrease
Supply Prices
DemandSupply Low- Demand High- Prices Increase
DemandPrices
Supply
STEP 2ANALYSIS -GENERAL
16
B Principle of Surplus ProductivityPrinciple of Surplus Productivity states that returns
attributable to land are what remain after returns to labor management and capital are satisfied
The principle of surplus productivity underscores the unique position of land in production and helps explain why land values can vary dramatically If two parcels are used for identical purposes and are similar in their labor management and capital requirements but one because of its location produces greater gross income than the other then the difference in net income will be capitalized entirely into differences in land values
Example Cost to develop and market lots in a subdivision
C Principle of ChangeThe principle of change states that market value is
determined by dynamic economic political and demographic factors such as zoning rent controls interest rates transportation and local economic conditions
Due to the fact that the supply of land is relatively fixed its value is affected by changes in economic political and demographic market forces
Example - Interest rates businesswork 911
STEP 2ANALYSIS -GENERAL
17
D Principle of AnticipationThe principle of anticipation which underlies the income
approach to value states that market value equals the present value of future benefits
What does the person expect to get when buying the property
In the case of vacant commercial land this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land Similarly the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land The principles of anticipation and change underscore the need to estimate market value as of a given date
HIGHEST amp BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND
Highest amp Best Use is the reasonable probable and legal use of vacant land or improved property that is physically possible legally permissible appropriately supported financially feasible and that results in the highest value
STEP 2ANALYSIS -GENERAL
18
Highest amp Best Use
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
A Principle of Supply and Demand
The principle of supply and demand explains the large differences in land values between urban and rural areas between different urban areas and even between different neighborhoods in the same urban or rural area No other commodity exhibits such large variations in price
(LOCATION LOCATION LOCATION)
Supply Increase- Demand Steady or Low- Prices Stabilize or Decrease
Supply Prices
DemandSupply Low- Demand High- Prices Increase
DemandPrices
Supply
STEP 2ANALYSIS -GENERAL
16
B Principle of Surplus ProductivityPrinciple of Surplus Productivity states that returns
attributable to land are what remain after returns to labor management and capital are satisfied
The principle of surplus productivity underscores the unique position of land in production and helps explain why land values can vary dramatically If two parcels are used for identical purposes and are similar in their labor management and capital requirements but one because of its location produces greater gross income than the other then the difference in net income will be capitalized entirely into differences in land values
Example Cost to develop and market lots in a subdivision
C Principle of ChangeThe principle of change states that market value is
determined by dynamic economic political and demographic factors such as zoning rent controls interest rates transportation and local economic conditions
Due to the fact that the supply of land is relatively fixed its value is affected by changes in economic political and demographic market forces
Example - Interest rates businesswork 911
STEP 2ANALYSIS -GENERAL
17
D Principle of AnticipationThe principle of anticipation which underlies the income
approach to value states that market value equals the present value of future benefits
What does the person expect to get when buying the property
In the case of vacant commercial land this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land Similarly the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land The principles of anticipation and change underscore the need to estimate market value as of a given date
HIGHEST amp BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND
Highest amp Best Use is the reasonable probable and legal use of vacant land or improved property that is physically possible legally permissible appropriately supported financially feasible and that results in the highest value
STEP 2ANALYSIS -GENERAL
18
Highest amp Best Use
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
B Principle of Surplus ProductivityPrinciple of Surplus Productivity states that returns
attributable to land are what remain after returns to labor management and capital are satisfied
The principle of surplus productivity underscores the unique position of land in production and helps explain why land values can vary dramatically If two parcels are used for identical purposes and are similar in their labor management and capital requirements but one because of its location produces greater gross income than the other then the difference in net income will be capitalized entirely into differences in land values
Example Cost to develop and market lots in a subdivision
C Principle of ChangeThe principle of change states that market value is
determined by dynamic economic political and demographic factors such as zoning rent controls interest rates transportation and local economic conditions
Due to the fact that the supply of land is relatively fixed its value is affected by changes in economic political and demographic market forces
Example - Interest rates businesswork 911
STEP 2ANALYSIS -GENERAL
17
D Principle of AnticipationThe principle of anticipation which underlies the income
approach to value states that market value equals the present value of future benefits
What does the person expect to get when buying the property
In the case of vacant commercial land this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land Similarly the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land The principles of anticipation and change underscore the need to estimate market value as of a given date
HIGHEST amp BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND
Highest amp Best Use is the reasonable probable and legal use of vacant land or improved property that is physically possible legally permissible appropriately supported financially feasible and that results in the highest value
STEP 2ANALYSIS -GENERAL
18
Highest amp Best Use
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
D Principle of AnticipationThe principle of anticipation which underlies the income
approach to value states that market value equals the present value of future benefits
What does the person expect to get when buying the property
In the case of vacant commercial land this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land Similarly the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land The principles of anticipation and change underscore the need to estimate market value as of a given date
HIGHEST amp BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND
Highest amp Best Use is the reasonable probable and legal use of vacant land or improved property that is physically possible legally permissible appropriately supported financially feasible and that results in the highest value
STEP 2ANALYSIS -GENERAL
18
Highest amp Best Use
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
Physically Possible ndash access topography size etcLegally permissible ndash zoning deed restrictions approvalsFinancially Feasible ndash demand of useMaximally productive ndash best return scarcity of land
Highest and best use means that the market value of property depends on potential use rather than on current use alone Highest and best use is most obvious in the case of vacant land which commands value based on potential use The more profitable the potential use the higher the demand and market value Vacant land in an urban area commands greater value than vacant land in a rural area What use would bring the most profit or the highest value Consider limitations on the land- zoning restrictions etc
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
19
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
A Social FactorsSocial factors help explain patterns of land use as well as
demand and price People have basic desires for territory and companionship These desires are manifested in clustering of people near urban centers and in various uses of land Prestige also plays a major role in land use as individuals and groups seek particular locations for social and economic reasons
Examples New Subdivisions- we are social creaturesNeighborhood Influences
This will be considered in the neighborhood analysis
STEP 2ANALYSIS -GENERAL
Highest amp Best Use
20
3 Factors Affecting Land Value
Desire ndash desire to possessown the goodUtility ndash capacity of goods to excite desire to possess
(not usefulness of goods)Purchasing Power ndash desire must be supported by
financial ability to purchase (economic affects)
Scarcity ndash if there is a heavy supply (not scarcity) demand price amp value will be lower
2 Land Value is Created Through
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
B Legal governmental and political policiesLegal governmental and political policies can increase or
decrease the demand for landAt the national level monetary policy can either spur or slow
economic growth and demand for land State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation zoning and land use controls and rents controls The quality of local government services such as roads schools police and fire protection also affects demand
Examples Zoning 911 Recessions Tax Stabilization School Choice etc
C Physical environmental and locationPhysical environmental and location factors largely explain
patterns of land values within a city or market area In analyzing such factors it is useful to distinguish the concepts of site and situation Site attributes are size topography and other physical features of a given parcel Situation attributes focus on the location of a parcel relative to other places such as the central business district interstate access etc Site attributes affect land values because owners are able to use the landrsquos inherent resources situation attributes affect value because of nearness or accessibility to
other resources
STEP 2ANALYSIS -GENERAL
21
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
A successful land valuation study must include site and situation variables
Site factors will be considered in the land grading process Situation factors will be considered in the neighborhood and
general market analysis town to town
Stratification is the sorting of sales and other market data into homogeneous groups
In most towns this will be one land schedule and one analysis but more than one might be required if there is a commercial district ski area or lake area that might have a different market
Within strata land should be analyzed and valued according to common units of comparison Sales prices are expressed as price per unit The units chosen should conform to the basis upon which land is analyzed and sold in the market For residential land the parcel or lot the square foot or acre and occasionally the front foot provide appropriate units of comparison Large tracts of vacant land are often compared on a cost per acre basis Lake property is often compared on a front foot unit with variables for depth andor other attributes
STEP 2ANALYSIS -
SPECIFIC DATA
22
Market Analysis in Land Valuation
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
Steps to developing a land scheduleA Collect base information of all land sales which have
occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid) Then filter spreadsheet to valid sales only with notes on all eliminated sales Depending on the size of the town this may require a range of sales anywhere from three years to five years (however if this is necessary you will certainly want to consider whether or not a time adjustment is needed) Base information should include name of buyer and seller location parcel size sale price and sale date
Begin with only raw land sales at this point If it is found that not enough information is available through raw land sales you may need to abstract land values from newly constructed houses or add information from a similar market
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
23
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
Steps to developing a land scheduleInstructions for Use of Land Sales Analysis SheetList land sales in order of size of parcel small parcels first (or
list in any order and sort using excel) The various columns should at least show the following
Spreadsheet rsquosColumn 1 ndash Grantor (Seller)Column 2 ndash Grantee (Buyer)Column 3 ndash Describe location if possible such as ES
Higgins Road TH4 ndash West of red dwellingColumn 4 ndash Give parcel number or identification numberColumn 4a ndash Give sale number ndash this number will follow the
saleColumn 5 ndash Sale date Month and Year onlyColumn 6 ndash Sale price of landColumn 7 ndash Size in acreage (donrsquot write A for acreage) Column 8 ndash Price per acre Round to nearest dollar (or five
dollars) omit $ sign
Columns from Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
24
1 2 3 4 4a 5 6 7= 8x
Grantor GranteeDescriptive
Location Map LocSale
Sale Date
Sale Price Size
Sale Price per acre
Sam Sample Jane Example South Street 01-100 1 218 13200 2 6600
Teri Gildersleeve David Example Main Street 03-109 5 318 39600 2 19800
Sara Sample Christie Wright Main Street 03-229 6 218 33000 2 16500
Doug Lay Wayne Doe Maple Lane 05-320 7 118 50000 2 25000MaryAnn Gallivan Harry Bronson
Whipple Lane 02-101 17 317 60000 5 12000
Nicholas Middle Ryan DataWhipple Lane 02-130 10 717 72000 58 12414
Darwin Washington Louis Smith
Whipple Lane 02-244 11 617 60000 59 10169
Linda Lynds Ally Donalds South Street 01-120 12 517 62500 6 10417
George Ryan Thomas Pain South Street 01-230 13 917 72000 8 9000
Roger Harris Joseph Day West Street 04-090 9 1117 130000 10 13000
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Amelia Jordan Anthony Billock North Ave 04-020 4 318 150000 50 3000
25
Columns on Spreadsheet
Market Analysis in Land Valuation
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
Steps to developing a land scheduleB Arrange this information on a land sales analysis form
from smallest lot size to largest lot size Fill in any and all information that is available to you(You should be able to complete columns 1-8 from
information available to you)(Using Excel this can be done by sorting the information by
column 7)C Arrange all sales on a town map or sectional maps to
indicate location Use sale number or map number to indicate(This will give you a nice visual of the Locational Influences
in your town)
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
26
1 52 8 10
3 7 69 4
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
27
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
All Sales Unadjusted
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
Steps to developing a land scheduleD Develop a scattergram of sales information Using graph
paper- label the horizontal axis as sizeacreage and the vertical axis as actual price per acre If you are using excel you will choose the sale price per acre and acre columns for the unadjusted scattergram Plot each sale on your graph In theory most sales that are way out of range will have an explainable reason
(Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)
STEP 2
ANALYSIS -SPECIFIC
DATA
Market Analysis in Land Valuation
28
0
5000
10000
15000
20000
25000
30000
0 20 40 60
Sale
Pric
e pe
r acr
e
Acreage
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
Steps to developing a land scheduleE Determine whether or not your land schedule will
include water septic and site improvementYou will need to know this before you assess the grade of a
propertyConsider the followingDo most land sales in this area sell with water and septic and a
cleared site Do most have public water and sewer What is typical for my area If all or most sales will include these improvements your land
schedule can include these If all or most sales will not include these then your land
schedule should not include these Either way if you have some sales that do include public
water and sewer you will want to find two similar sales one with water and sewer and one without to determine the market value of each Be sure to note whether or not these values include water and sewer
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
29
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town (This step cannot be overstated ndash it is crucial)
What are itsrsquo characteristics (the ldquoaveragerdquo parcel in your town)
Location (to town and amenities main road or off main road neighborhood or rural)
Utilities (available at the road at site or would need work to get to parcel water and sewer access or limitations)
Road (paved gravel class 4 right of way)
Access ndash to parcel from closest road (at grade or above or below long drive needed)
Topography (flat and level or abovebelow grade open or wooded or a little of both)
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
30
Steps to developing a land scheduleF Attempt to get a good picture in your mind of an ldquoaveragerdquo
piece of property in your town
What are itsrsquo characteristics
View (local above average below average)
Drainage ndash if the parcel is not obviously wet assume average (Average below average or poor)
Waterway ndash (enhancing no influence detrimental frontage and access)
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Size and shape ndash (conform to zoning limitations due to shape subdivision potential)
The average pieces will vary from town to town by acreage groupings and from different periods in the market to other periods
Document your description of average for different acreage sizes
EVERY TOWN AND EVERY MARKET IS DIFFERENT
STEP 2ANALYSIS -
SPECIFIC DATAMarket Analysis in Land Valuation
31
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
32
STEP 2ANALYSIS -
SPECIFIC DATAG Research all sales as thoroughly as possible (Very important)This may include any or all of the following mailing questionnaires on the sale to buyer and seller research of any deeds survey maps or other maps relative to the property site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person) During the site inspection(s) gather as much information as possible such as access topography general appeal of the property drainage view location etc
VERMONT DEPARTMENT OF TAXES Sales Verification Form
TownSale Property
SELLERSale Price Sale Date
R E BrokerBroker Phone
Seller Phone ( ) Property TypeDoc No
QuestionsYes No
1 Was the sale between family members or close friendsRelationship
2 Did the sale involve a trade like kind exchange debt payment etcPlease explain
3 Was the property rented leased or occupied by the buyer
4 Is the property abutting a parcel already owned by buyer(any contiguous property even if divided by road or river)
5 Was this a distress sale (divorce estate court decree etc)Please explain
6 Were any back taxes liens etc included in the sales pricePlease explain
7 Were any substantial changes made to the property just before the salePlease explain
8 Did you provide (take back) any mortgage financing If so amount1st Mtg $ 2nd Mtg $ 3rd Mtg $
9 Did you get an appraisal before putting the property on the marketIf so the appraised value (not town listed v$
10 Do you feel that the sale price reflects a fair market valuePlease explain below if NO
11 Was any personal property included in the sale priceIf so what What is the value $
12 Was final sales price the result of negotiation the p Circle one YES NO
13 Additional Comments
Date Verifying Persons__________________PVR-VF001a Signature
You may want to take pictures
if you will have a sales
book with your land schedule
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
Steps to developing a land scheduleG Research all sales as thoroughly as possible
Note anything that strikes you as better than or worse than your ldquoaveragerdquo piece of property in town Make as many notes and observations as you can Make sure your information reflects the property as of the date of sale
STEP 2ANALYSIS -
SPECIFIC DATA
Market Analysis in Land Valuation
33
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
Steps to developing a land scheduleH Determine if a Time adjustment is Needed (spreadsheet
Column 9)The illustration on the next page is an analysis of resales
using paired sales analysis This is one method of determining time adjustments In order to do this analysis you must find properties which have sold more than once with the only difference between the 1st and 2nd sale being time
The steps are to1 list the sales2 calculate the percent change between the first sale price
and the resale price3 divide the percent change by the number of months and 4 estimate a time adjustment from the results
STEP 2ANALYSIS -
SPECIFIC DATA
34
Market Analysis ndash Time Adjustments
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 9 Show percentage per month increase at top of column it may vary between large and small parcels or between areas of townColumn 10 Show either column 6 or 8 times column 9 value (rounded)
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
Steps to developing a land scheduleAssign a grade for physical (as best you can) while looking
at the property (Spreadsheet Column 11a)
You will need to assign a separate grade for physical attributes Look to the physical attributes first- if everything there is average most of the grade difference may be found in location Location (neighborhood) will show itself later This is only an estimate and will be used along with your notes and other information to adjust or modify later
Remember to think of the property in comparison to that ldquoaveragerdquo piece of property you have in your mindConsider views but be careful to consider whether the view is offset by the cost required to get to the views Application of grades will add or subtract a percent from the sales price to bring the value back to or up to ldquoaveragerdquo or 10
You can extract grade from your market depending on your volume of sales
(THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 ndash 13 ON THE SPREADSHEET)
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Above Average 000 000 000 000Detrimental 000 000 000 000
Site Grade Land 1 Total Land Grade 000
If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific
Rest of Land Grade Land 2 Total Land Grade 000
General Land Grades
LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET
WANTS AND NOT YOUR INDIVIDUAL PREFERENCES
Steps to developing a land schedule
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
Land Grading Factors
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
If you use Other be sure you enter the formula and then delete it when you
are finished with that parcel as it is to be used parcel specific
Rest of Land Grade
Land 2
Total Land Grade
000
Sheet1
10 11 x 11a = 12 13 = (1012)
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Sale Price time adj Appr Grade Comp GradeSale Price Adj time
amp grade
Loc Phy
6600 1 04 04 16500
19800 1 12 12 16500
16500 1 1 1 16500
25000 15 1 15 16667
12000 1 11 11 10909
12414 1 12 12 10345
10169 1 1 1 10169
10417 1 1 1 10417
9000 1 1 1 9000
13000 1 15 15 8667
8614 1 1 1 8614
4265 1 05 05 8529
2400 1 07 07 3429
3939 1 12 12 3283
3600 15 1 15 2400
3000 1 15 15 2000
39
Columns on Spreadsheet
Market Analysis in Land Valuation
One the first run the Location will be at a 1
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleAverage for your town | | |
9 10 Average 12
Ideally all grade factors would be market extracted This is accomplished by comparing two sales that are similar
in all attributes except for one Then the value percentage for that attribute can be calculated (market extracted)
Example of market extracted gradeSale 1 - $40000 ndash 2Ac 118Sale 2 - $48000 ndash 2Ac 218All Attributes Similar with exception of view48000 40000 = 12 grade for good view
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
40
General Land Grades Sale 6Grade
Assigned Grade Subject
Sub-totals Multipliers for Variable Values
UTILITIES UtilitiesOn Site 110 000 On SiteAt Road 100 100 At RoadNone 080 000 None
100ROAD Road
Paved 100 100 PavedGravel 100 000 GravelClass 4 090 000 Class 4Right of Way 080 000 Right of Way
100ACCESS Access
Good 110 000 GoodAverage 100 100 AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Long Range 150 150 Long RangeAbove Average 120 000 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
150DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Long Range 150 000 Long RangeAbove Average 120 000 Above AverageAverage 100 100 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
100DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Long Range 150 000 Long RangeAbove Average 120 120 Above AverageAverage 100 000 AverageBelow Average 090 000 Below AverageDetrimental 080 000 Detrimental
120DRAINAGE Drainage
Average 100 100 AverageBelow Average 080 000 Below AveragePoor 050 000 Poor
Sale 4 Sale Price $144000Sale Date 318Land Size- 50 Acres
Grade for view is projected from other paired sales
51
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 11 and Column 11a At time of inspection of
land sales preferably after analysis sheet has been completed through column 10 a judgment should be made as to the effect location (assume average 10 and let neighborhood show on scattergram and through value review)
Also at this same time special note should be made of the physical characteristics of the land Factors that should be considered include topography type and depth of soil shape of parcel etc It is recommended that you complete a data collection form for each parcel sold and unsold
Column 11a 10 represents average Consider physical characteristics only
Column 12 Composite appraisal grade is column 11 x 11a
This is the time to analyze your scattergram and consider if the outliers represent neighborhoods Do you have sales to prove neighborhood multipliers If so plug these into location factor
Columns on Spreadsheet
STEP 2ANALYSIS -
SPECIFIC DATA
52
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 13 Column 10 divided by column 12 brings all sale
prices to common ground (representing average or 10 value) ndash in theory at least either by value per acre or per parcel for average land in this size parcel
From column 13 should come the indicated values to record in the upper left-hand area of this sheet It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page Record only those values that appear to be supported by column 13
(What you are attempting to find is 3 ndash 4 (at least) good (defensible) marker points ndash example ndash you are confident in your 2 acre your 10 acre your 50 acre and your 200 acre The land schedule program that we have at Property Valuation amp Review will logically fill in the points from there
Column 14 Yoursquore best estimate of value per acre or per parcel for average land for each parcel size represented
Column 15 Column 10 divided by column 14 The resulting factor will indicate whether the parcel of land sold above (over 10) or below (under 10) or at 10 value you have estimated for average land in this size parcel
This is a cross check of your average value compared to the grade you assigned
STEP 2ANALYSIS -
SPECIFIC DATA
53
Columns from Spreadsheet
10 11 x 11a = 12 13 14 15
Sale Price time adj
Appr GradeComp Grade
Sale Price Adj time amp
gradeEst Value Avg Land Sale GradeLoc Phy
6600 1 04 04 16500 16500 040
19800 1 12 12 16500 16500 120
16500 1 1 1 16500 16500 100
25000 1 1 1 25000 16500 152
12000 1 11 11 10909 11000 109
12414 1 12 12 10345 10000 124
10345 1 1 1 10345 10000 103
10417 1 1 1 10417 10000 104
9000 1 1 1 9000 9000 100
13000 1 15 15 8667 8700 149
8614 1 1 1 8614 8700 099
4265 1 05 05 8529 8700 049
2400 1 1 07 3429 3400 071
3939 1 12 12 3283 3200 123
3600 1 1 1 3600 2000 180
3000 1 15 15 2000 2000 150
54
Columns on Spreadsheet
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land schedule10 Begin testing and verifying your data Plug in your physical and location (assume 10 until you do
your first scattergram) grade estimates to your land sales analysis form Calculate the values through on the land sales analysis form (9-15) and compare them with average Do they seem to be in line
Compare your results with sales of similar sizes and similar neighborhoods Do they seem to be in line
Compare your result with the scattergram- are your average or close to average properties showing as such on the graph Rethink and possibly re-inspect and do more research as necessary adjust grades as appropriate
Market Analysis in Land Valuation
STEP 2
ANALYSIS -SPECIFIC
DATA
55
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Steps to developing a land scheduleColumn 16 Zoning district ndash letters and or numbers
designating the district with explanation of code at top of page
Column 17 Remarks column ndash Give brief description ndashdonrsquot start in with this lot is etc Simply state ndash Above grade ndash rolling or wet ndash below grade ndash 1 mile from electricity etc
When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis
STEP 2ANALYSIS -
SPECIFIC DATA
56
Columns from Spreadsheet
Sale 16 17
Zoning Remarks Grade Adj1 steep rocky access5 above average view6 average 2 acre14 Father to son7 possible neighborhood17 underground utility10 above average view11 average 6 acre12 average 6 acre15 abutting Property
57
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical and Location)
Neighborhood 2 Now 2 sales are together
Neighborhood 2 Now 2 sales are together
0
5000
10000
15000
20000
25000
30000
0 10 20 30 40 50 60
Adjusted Sales(Physical Only)
Neighborhood 2
Neighborhood 2
STEP 2
ANALYSIS -SPECIFIC
DATA
A Establish Marker Points
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Once you have completed the spreadsheet you should be able to identify lsquoMarker Pointsrsquo or three to four value points that you are confident you can defendsupport for per Ac value
Example- 2 Ac = adjusted value of $16500Ac = $33000
6 Ac - adjusted value of $10000Ac = $60000
10Ac - adjusted value of $8700Ac = $87000
50 Ac - adjusted value of $2500Ac = $125000
This is indicated by points on the curve amp groupings of value on the spreadsheet
B Develop Working Land Schedule
Submit marker points to NEMRC for a ldquoworkingrdquo land schedule This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values
STEP 3 Valuation
58
Project and Apply the Results
C Test Land Schedule
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Begin testing with newer sales and improved sales As new land sales occur you will test this schedule In addition you will test sales of improved properties This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers and site improvements values
D Apply the Results
Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
1 There are no sales to indicate the value of water and sewer within the town
Talk to local real estate appraisers for what they are using to adjust Local contractors (well amp septic)
Look to abstract information from newly constructed homes2 How to tell if a time adjustment is needed
Look for two sales of the same or similar pieces of land and compare the change in price assuming all other possible variables are equal Do all sales using location and physical grade adjustments first Time adjustment should be evident and may be appearing in other sections of your market Market has been relatively flat for several years but may be on the verge of a change
3 Where to stop a land scheduleConsider where your market data runs out Is this because large
parcels are not typically for sale within your town Consider where does your market (price per acre) seem to stabilize Your sales and scattergram will begin to show this
4 Assessing property as one lot or several lots versus valuing as one lot or several lots
When considering the highest and best use of land it may be more logical to assess lots separately than as one These lots can be assessed separately while they are still listed together in order to conform to the definition of a parcel
Remember to apply your result consistently to all similar properties
Questions or Problems You May Encounter
63
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
5 What other checks and balances can you do on your proposed land schedule
Once you have done mathematical and logical checks as thoroughly as possible you should begin to inspect new residential construction where the property has sold recently Once you have calculated a cost new on the dwelling you should be able to test your land schedule and land improvements schedule against the sale prices of these properties(Typical land to building ratio = 2575) In other words typically if someone pays $100000 for the land and site improvements they will probably build at least a $300000 house Respectively you can deduce that on average if someone pays $400000 for a property at least $100000 is attributable to the land and site improvements
HOWEVER THIS IS NOT AN ABSOLUTE6 Not enough sales in your townOne option is to consider sales information from similar towns
consider the similarity of the market and what factors may affect differences
Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs The sale price minus actual costs of construction including site improvements (well septic driveway electric)= should equal land value Remember the general rule of thumb of 25 land value
Questions or Problems You May Encounter
64
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
Important things to remember A land schedule is a work in progress and must be
checked adjusted and rechecked You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved)
Land schedules will not be valid into eternity As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof (Principles of change and changes in economic factors or Supply and Demand)
A land schedule as is the way with all assessing is only as good as the information you put in and the information you know when you are developing the land schedule That is why it is crucial to fully inspect and analyze all sales data as many times as necessary
Always do your land schedule work in pencil You may need to erase and change things many times Using an excel spreadsheet on computer will allow you to make changes and sort information easily
Be prepared to obtain help when needed to develop an accurate land schedule You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule
Land Valuation Review
65
[Example (67800-65000)65000 =043]
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics
(Average = sum percent per month (0217) divide by how many (5)) Average percent per month 0043 x 100 = 43 per month
Comp 1First Sale (10 months ago) 65000Current Sale (Present time) 67800Increase in value over ten months 2800(67800 - 65000) 65000 = 043 x 100 = 43 change67800-65000 = 2800 65000 = 043 10 mths = 0043 per month
This method is valid if the ListerAssessor is confident that no other changes to the property physical or otherwise have occurred to change the property value
Paired sales analysis represent the same property having sold twice or two sales of very similar properties This requires the ListerAssessor to locate properties that are very similar in all locational and physical characteristics