PROCEDURE Site Description and Analysis 3

Access Streets and Alleys A site cannot be used unless there is some type of adequate, legal access. It may be a right-of-way over adjacent property or a private driveway or street. Access may also take the form of a public street or alley. When access is not by public street, special attention should be given to who maintains the street and if lending institutions servicing the area will allow mortgages on residences without public access.

Access Streets and Alleys

Water In analyzing the water supply, an appraiser should determine: if water that is supplied by a public company is available with sufficient pressure if water that is supplied by a small, unregulated company is dependable if water that is supplied by a well is able to provide a flow of 5 gallons per minute if the water supply meets the standard bacteriological and chemical requirements of the local health authorities

Analyzing Water Supply

Climatic or Meteorological Conditions Generally, climate affects the whole region or community and should be reported and analyzed in the appraisal report. Sometimes these conditions specifically affect the value of the site being appraised. In some regions there may be an increase in the value of lots that face a certain direction. For example, if prevailing winds are consistent, lots may be favorably or adversely affected by their relation to the direction of the wind. In many cases, especially in mountainous or seafront areas, the aspect of a lot in relation to the sun may be a value factor.

Climatic or Meteorological Conditions

Considerations Abutting and Nearby Streets and Traffic Flow Abutting and nearby streets may be in a grid pattern or the style of dead-end or limited-access streets. Some streets in a neighborhood will become thoroughfares and suffer from heavy traffic flow. Access by a back alley or a special service road may add to or detract from value, depending on the market.

Considerations Abutting and Nearby Streets and Traffic Flow

Considerations Access by Car Automobile access is important. Convenient routes to work, shopping, and recreation areas substantially affect value. Restricted automobile access, either to/from the lot to a major highway or into/out of a residential area, can decrease lot desirability and therefore value.

Considerations Access by Car

Considerations Prices of Nearby Lots Both the selling and listing prices of nearby lots can have an impact on the value of the subject site. According to the principle of substitution, the maximum value of a lot is determined by what it would cost to buy similar lots that are equally desirable, at least until the supply is exhausted.

Considerations Prices of Nearby Lots

Considerations Public Transportation The value of a lot can be affected by the availability of public transportation. Transportation availability provides linkage to places of work, shopping, and recreational areas. Changes in the availability of public transportation can affect the value of property. New systems, such as a rapid transit system, may increase values in the area but deteriorating systems tend to decrease value.

Considerations Public Transportation

Considerations Safety of Children from Traffic A high volume of traffic is not only inconvenient, but can be a safety consideration of parents with smaller children. Therefore, the provision of speed controls and sidewalks between the site and destinations such as schools and parks are important factors. Another important factor is the availability of play areas away from high-traffic streets.

Considerations Safety of Children from Traffic

Considerations Service Costs Some lots are not eligible for municipal services, such as garbage collection, because they are not on public streets. If these services must be purchased privately, the value of the site may be negatively impacted, if competitive sites have such municipal services.

Considerations Service Costs

Considerations Tax Burden Compared to Competitive Lots If assessments are not uniform, the value of lots with excessive tax burdens may be negatively impacted, at least temporarily, by the excess levy. The reverse would also be true; lots that are under assessed might be expected to bring a premium.

Considerations Tax Burden Compared to Competitive Lots

Considerations Use of Nearby Lots The use of the immediately adjacent lots is of great importance to the value of a property. The principle of conformity states that the maximum value of a property is attained when the improvements of the property conform to the usage and style of neighboring property. For example, if neighboring lots are improved with medium-value, colonial-style, multi-story houses, the appraiser might seriously question the appropriateness of plans for construction of a high-priced, extremely contemporary, split-level on the site being appraised. However, conformity is not always necessary to obtain maximum value.

Considerations Use of Nearby Lots

Considerations Utility Costs If location necessitates incurring extra costs to bring utilities to a site, the market may recognize a parallel decrease in the value of the lot.

Considerations Utility Costs

Contour and Topography In identifying the effect on value of a lot's physical characteristics, what is true for one neighborhood is not always true for other areas. In general terms, sites that are costly to improve because of extreme topographical conditions tend to have lower values. For example, a lot higher or lower than street level may create additional costs to correct drainage, erosion, or accessibility problems. In some cases, however, difficult conditions are offset by advantages recognized in the market, such as a lot that has a mountain-side scenic view or extra privacy. Examples of extra costs include the amount of site work required to make the site buildable. If there is bedrock, excess excavations costs may be incurred. In some cases, a site may require fill, or it may have excess fill that can be sold.

Contour Topography

Drainage Some method must be provided to drain surface and storm water off the site. For example, a drain or a swale may be used to direct water to the street or other drainage area. (A swale is a gully in the ground.) When the lot is level or slopes away from the water disposal area, storm sewers must be constructed. In some areas, the leaders or downspouts that collect rain falling on the building may be connected directly into the storm water disposal pipes. When a house has a basement, footing drains are needed to carry the water away from under the basement to prevent pooling and seepage. When the structure is located on a slope, care must be taken to keep the surface water away from the sides of the building.

Drainage

Excess Land As we learned earlier, excess land is that portion of a parcel that is not necessary to serve the existing or proposed improvements and can be legally subdivided and sold off. Because excess land has the potential to be sold off separately for a separate highest and best use, it is valued separately. It may add significant value to the property being appraised.

Excess Land

Hazards and Nuisances Sometimes hazards exist in the area that reduce the value of a property. The most common hazard is heavy traffic, and this problem will be reflected in the market. The appraiser should be aware that traffic patterns can change rapidly. The effect of proposed highway improvements should be considered. Hazards and Nuisances The awareness of flood hazards has become quite important in many areas now that most lenders cannot make a mortgage in a flood hazard area without flood insurance. An appraiser must determine whether the site is in an identified flood hazard area, and if so, if flood insurance is available and at what cost. The effect on value must also be considered and reported in the appraisal. Other hazards that should be investigated include potential slides, earthquakes, or any unusual fire danger. A variety of services contribute to the value of a site when they are in the area, but detract from value when they are too close. For example, an owner may be glad to have a fire station or school in the vicinity, but not next door. Other nuisances that can detract from value when located in a residential neighborhood include industries, large commercial facilities, noisy roads, high voltage power lines, and vacant houses.

Hazards and Nuisances

Utilities Installation of Public Utilities Included in the value of the site is the cost of bringing water, electricity, gas, telephone, cable television, and storm and sanitary sewers to the site. The site may have additional value because of the availability of these utilities even if they are not connected to the subject property. It is not unusual to find a house still using a well or septic system even where public water and sanitary sewers are available. The cost of connection is often not a viable alternative where the existing well and septic tank remain functional.

Installation of Public Utilities

Natural trees and shrubs are usually considered part of the land itself. Landscaping is treated separately by most appraisers as a site improvement. Lawns, shrubbery, gardens, and plantings in general improve the appearance and desirability of residential properties. However, because plantings are a matter of individual taste and will deteriorate rapidly without good care, typical buyers are inclined to discount the cost of replacing such plantings especially if they are very elaborate. Although such improvements are usually regarded as an asset, their contribution to the value of a property will vary with location and character.

Landscaping

After completing this lesson, you will be able to: identify some physical characteristics of real property that must be addressed when analyzing the site. explain how a site can be affected by its surroundings. identify some economic factors that must be addressed when analyzing a site.

Objective

Every appraisal must contain an accurate, physical description of the site being appraised. Although much of the data can be obtained easily, some of it may prove to be more difficult to find or unavailable. The appraisal report must state the assumptions that have been made about the nature of the property or site in the absence of precise information. For example, in the case of an unimproved lot, a soil test may be desirable. In the absence of such a test, the appraiser should point out that assumptions have been made as to the physical characteristics of the soil, and that the value conclusion may be substantially different if these assumptions do not reflect the actual conditions of the soil. Let's look at some important physical characteristics.

Physical Characteristics

Plottage A lot has an optimum size and configuration to support its specific and intended use. The area of a lot can be divided into parts: the part needed to support its existing or proposed improvements and any extra or remaining land. The extra land that is not needed to support the improvements may have a separate and independent highest and best use.

Plottage

Access Street Improvements The description of a site should also include information about street improvements, such as the width of the street, how it is paved, and the condition of the pavement. In some areas, lenders require substantial details about private streets when they represent the only access to a property. Also reported are details about the sidewalks, curbs, gutters, and street lighting.

Street Improvements

Surface and Subsoil In many areas, the soil's ability to support a heavy building, an extra story, a basement, or a pool may affect the value of a lot. Even an inability to support a lawn and landscaping can be a marketability factor. An appraiser should note whether the soil appears to be problematic in relation to other lots in the surrounding area.

Surface and Subsoil

View's Affect on Value The value of a property may be significantly affected by the view. Properties that are identical in all characteristics except view can have differing values. A pleasant view can add to the value; while a poor view can decrease value.

View's Affect on Value

Water When appraising vacant land not on a public water supply, appraisers should check surrounding properties where wells have been dug to determine the probability of an adequate water supply being found for the property being appraised.

Water on Vacant land

When a house has a basement, footing drains are needed to carry the water away from under the basement to prevent pooling and seepage.

When a house has a basement, footing drains are needed to carry the water away from under the basement to prevent pooling and seepage.

Size and Shape Width and Frontage Although width and frontage are often used synonymously, they have two distinct meanings. Width is the measurement between the two side lines of a lot. For lots with unusual shapes, terms such as "average width" may be appropriate. However, the width of the lot at the building line should be noted. Zoning regulations may require a minimum width at certain points in order for the site to be used for a particular purpose. Frontage refers to the measurement of a boundary that borders on a street or waterway. "Front feet" are often used as units of comparison when appraising residential lots. However, the importance of frontage varies depending on the lot characteristics and surrounding area. Once a lot meets the standard size acceptable in the area, excess frontage does not always add value proportionately to the lot.

Width and Frontage

In the site data and analysis portion of the appraisal, the best way to accurately identify and describe the property is to use _____. a survey only a legal description and survey, with a neighborhood/community map a neighborhood/community map only a deed description only

a legal description and survey, with a neighborhood/community map

The principle that states that the maximum value of a property is attained when the improvements of the property conform to the usage and style of neighboring property, is known as the principle of _____. change conformity competition substitution

conformity

Corner Influence The appraiser must make a judgment, based on a specific lot and its market, if a corner location adds or detracts from the value when the property is compared with other lots in the area. Lots located at the end of dead-end streets that have cul-de-sacs for turnarounds also may have different values from similar lots without the cul-de-sac influence. Again, no universal rule applies. The appraiser must research the market for evidence on value of specific locational characteristics.

corner influence

Multiple Choice The effect on value of a location on close to the intersection of two streets is called _____. cul-de-sac influence corner influence curb influence street influence

corner influence

Size and Shape Depth The depth of a lot, along with its width, frontage, and total area, may influence its value. Residential neighborhoods may have a minimum acceptable lot depth. The shape of a lot affects its value. However, the exact value impact may vary according to other characteristics, such as its topography and the character of the surrounding area. In some areas, irregularity of shape may decrease value, particularly if the irregular lot shape results in increased construction costs. However, in other areas, as long as the lot is suitable for building, it may not affect value. If value were directly related only to size, the sole unit of comparison would be value per unit of measurement (e.g., per square foot or per acre). However, consideration must be given to such factors as a lot's frontage, width, depth, and shape, which all interplay with size to affect value.

depth

In general, the value of a lot is affected by _____. its shape its depth its frontage all of the answers shown

depth, shape and frontage

Economic factors have already been discussed in the regional, community, and neighborhood analyses. Economic factors apply specifically to individual sites as well as to larger areas.

economic factors

If extra land has an independent highest and best use and can be sold off separately, it is _____ land. surplus excess

excess

If extra land has an independent highest and best use and can be sold off separately, it is _____ land. excess

excess land

If the extra land has an independent highest and best use and can be sold off separately, it is excess land. Surplus land cannot be sold off separately.

excess land

That portion of a parcel that is not necessary to serve the existing or proposed improvements and can be legally subdivided and sold off is referred to as _____. excess land assembled land plottage assessed land

excess land

Plottage There is a difference between excess land and surplus land. Excess land may have an independent highest and best use and can legally be subdivided and sold off separately. It must be valued separately. If the extra land cannot be legally subdivided and sold off separately, it is called surplus land. Surplus land does not have an independent highest and best use. Though it may improve a property's land to building ratio, it may or may not contribute value to the overall parcel.

excess land vs. surplus land

For example, if a house is situated on a double lot, but is located within the permitted setbacks of only one of the lots, the second lot is excess land and could, therefore, be legally separated and sold for development of another home. In contrast, if a house is situated on a lot that is oversized compared with competitive properties, but the lot does not meet the minimum size requirements to be legally separated into two lots, the additional land is surplus land.

excess v. surplus

The measurement of a boundary that borders on a street or waterway is referred to as _____. frontage width depth plottage

frontage

When is a lender likely to issue a mortgage on property in a flood-prone area? if flood insurance is purchased only if the land is not developed never only if the land is developed

if flood insurance is purchased

If a plot contains extra land not needed to support its improvements, the extra land _____ a separate and independent highest and best use. does not have has may or may not have

may or may not have If a plot contains extra land not needed to support its improvements, the extra land may or may not have a separate and independent highest and best use.

Which of the following would most likely be considered part of the land, as opposed to site improvement(s)? landscaping natural trees and natural shrubs

natural trees and natural shrubs

A test used to determine the ability of the soil to absorb water is called a _____. percolation test saturation test seepage test IQ test

percolation test

Plottage "Plottage value" is the increase in value resulting from improved utility when two or more plots are combined to form a larger one. To accommodate a substantial building improvement, two or more plots may be assembled, often from different owners. This procedure usually entails extra costs, and key parcels may need to be purchased for more than their individual land value, either because they are already improved or because of a negotiating disadvantage. The price paid may indicate a special-use rather than an arm's length transaction. After assemblage, the project should support the costs of obtaining the land in addition to other capital costs involved. However, neither the cost of assemblage nor the size increase guarantees plottage value. For plottage value to be realized, there must be potential for a higher and more profitable use. Plottage value, in effect, results in the whole being worth more than the sum of its parts.

plottage

The increase in value resulting from improved utility when two or more plots are combined to form a larger one is called _____. plottage frontage excess value assessed value

plottage

Utilities Water Every house requires an adequate supply of potable water of acceptable quality. The sources of a potable water supply include municipal or private water companies, or well water. According to the FHA Minimum Property Standards, public water should be used whenever it's available. A direct water supply from rivers, streams, or other bodies of water is not acceptable to FHA.

potable water

According to the FHA, the preferred source of water to a property is _____. a public water supply rain water water from rivers or lakes well water

public water supply

Relationship to Surroundings Because the location of a site is fixed, its surroundings have a significant effect on its value. Much of this location effect has been covered in the region, community, and neighborhood analysis. Still to be considered here is the relationship of the specific site to its immediate environment.

relationship to surroundings

Few will argue the substantial advantage of being connected to a municipal sewer system. It is estimated, however, that almost 50 million people in 15 million homes depend on septic systems for their waste disposal and that 25% of new houses being constructed do not connect to municipal systems. If no public sewer exists, a percolation test may be required. A percolation test is used to determine the ability of the soil to absorb water, such as runoff from a septic tank.

sewer

Utilities Sewers Few will argue the substantial advantage of being connected to a municipal sewer system. It is estimated, however, that almost 50 million people in 15 million homes depend on septic systems for their waste disposal and that 25% of new houses being constructed do not connect to municipal systems. If no public sewer exists, a percolation test may be required. A percolation test is used to determine the ability of the soil to absorb water, such as runoff from a septic tank.

sewers

Which of the following would most likely be considered site improvement(s)? landscaping natural trees and natural shrubs

site improvement

Site Improvements In addition to utility connections, which are sometimes classified as site improvements, a variety of other site improvements are typically found on an improved lot. These improvements may include fences, walls, sidewalks and driveways, irrigation systems, pools and patios, tennis courts, and other recreational facilities. These all must be described in the appraisal report, and an analysis must be made as to their contribution to the value of the property.

site improvements

Fences, walls, and sidewalks are considered _____. personal property and should not be described in the report site improvements and should not be described in the report site improvements and must be described in the report personal property and should be described in the report

site improvements and must be described in the report

Subsoil definitely affects the cost of preparing a site for building; it can also influence the design of the structure that can be erected on the site. For example, the cost of improvements is increased if bedrock must be blasted or if the subsoil is not stable. Previous land uses such as mining and underground tunneling can present a hazard in some areas. There may be added costs if pilings, fill, or special foundations are required. Pilings refer to beams or columns driven into the ground to support a structure if the soil or rock itself is unable to provide the necessary support. Fill refers to soil used to fill a hole or depression. Special foundations refer to other reinforcing methods such as reinforced slabs. The appraiser must include a consideration of all such possibilities in a thorough site analysis. Where extreme soil conditions are suspected, an engineering study of the bearing quality of the soil and its suitability for foundations may be required.

subsoil

The principle that the price for which a property will sell is affected by similar properties of equal desirability is called the principle of _____. balance substitution change conformity

substitution

The site data and analysis portion of the appraisal should first accurately identify and describe the property being appraised. A legal description and survey, together with a neighborhood and community map, is the ideal way. Other shortcuts are acceptable only if the property being appraised is accurately identified by alternative methods. Data are gathered and organized into four categories: title and recorded legal data on-site physical characteristics relationship to surroundings economic factors All the data are carefully considered and analyzed in relation to the appraised site. Relevant material is reconciled and processed for use in the highest and best use analysis, which, along with the scope of work statement, forms the basis of the appraisal.

summary

If the property being appraised is located in a new subdivision, the appraiser should determine if the natural surface soil (topsoil) will be replaced at the end of the construction process or whether it is being stripped during site preparation. A trend today among developers is to disturb as little as possible of the natural landscape and topsoil during the building process. Sandy or rocky soil may require the extra expense of purchased topsoil to support future lawns and landscaping.

surface soil

Surplus land cannot be sold off separately.

surplus plan

The measurement between the two side lines of a lot is referred to as _____. frontage width depth plottage

width