I have a friend who needs some help doing some valuation on land parcels loacated all over North America…her family owns the parcels, they were purchased years ago and put into the family trust. It doesn’t have to be deadaccurate appraisals, just some reasonable idea of value. She also needs to do the same for commercial property.
Spending a little bit of money is ok, but shes found herself very frustrated in her attempts to research so far. The "Zillow"s of the net aren’t turning out to be very useful forland parcels and commercial.
A starting place to find the assessed value for a land parcel, for tax purposes, is to identify the county where the land is and poke around the county web site. Note; this is not the market value.
Many counties have links that are searchable by either the name of the property owner or the address of the property. In my county in NW Oregon I can find a great deal of information on the county site, including a map of property lines, when structures were build, back taxes owed, etc.
Banks and credit unions use these sites to determine loan values and then just do a drive by to confirm that the place exists without having to do a complete property assessment.
I worked for a small contractor and we would use these sites if we needed to place a lien on property for repayment. Just entering the person’s name would show us all of the various properties that they owned in the county.
Most likely her property tax bill (assuming property taxes are imposed) has some useful data. This is a matter of public record.
In my county, there are two numbers stored with each parcel; the assessed value, which does not change from year to year unless reassessed, and the fair market value, which does, and is supposed to reflect a realistic increase or decrease in value from one year to the next.
There may be a blanket multiplier applied to all properties, too. You need to contact the county assessor about all these figures before you put much trust in them.
And you may want to hire a professional appraiser to get a more accurate picture.
Okay, so we pulled the property tax assessments for most of the properties, but the data is old.
We’re thinking there must be a sort of standard-ish way to calculate value change over the years. Again, it doesn’t have to be perfect, just a wya of approximating. If land purchased in X zip code was worth 75,000 in 1981, what is the approximate value of that same land 30 years later?
How old? It may be the latest data available, and the data used for current tax calculations. If so, while the assessment may have taken place years ago, it’s not out of date if it’s still being used. Not all properties are re-assessed yearly; it’s too expensive and unnecessary.
That’s exactly what the Fair Market Value number is supposed to represent in our county’s data. The FMV is recalculated each year based upon the sales in that particular town, so you couldn’t use a national, state or even county multiplier.
This might not be the same elsewhere. Why don’t you call your local treasurer and ask?
I am a commercial real estate agent and a CCIM. Tax assessments will typically only give you the roughest approximation of arm’s length, real world market value and are often well under or over actual sold comparables as the assessments often lag the market by 1-3 years.
Plus, in the current economic scenario there are many commercial properties worth far less than the current tax assessment, so deriving market value is something that needs to be done based on current sold comparables, and to develop a useful matrix of those with appropriate adjustments for the subject property is going to take market knowledge and some work.
Raw land activity has taken a huge beating and is probably the least active of all the areas simply because few investors are spending any money investing in raw land unless they have an immediate or near term use for it.
Hiring an appraiser who does not work extensively in the immediate area of the subject property to go around and derive values for properties out of their market is a chancy proposition and often leads to wildly inaccurate values. Plus in commercial property analyses there many things aside from the dirt that affect value. Zoning, available infrastructure, traffic access, demographic profile of the market etc. etc. etc.
The bottom line is that there is no easy way to do what you want to do and get truly accurate values. It going to take lots of digging and pushups.
Even with market knowledge and pushups all you are really going to get is a “best approximation”. There is no easy way to do what you want to do with any degree of accuracy. Values are wildly variable even across limited geographic areas. Commercial properties side by side can go for huge differences in value just due to differences in traffic access issues.
Just take all the tax assessments and go with half of that value. It’ll give you a baseline.
What I was objecting to, Stoid, is your suggestion to halve the tax figures.
That works if your assessment procedure is done at a percentage (up or down) of the perceived value according to the assessor (some places do it that way). It does not work if the assessment is as close as possible to the perceived value, as is done in my neck of the woods.
In my state, the assessments CANNOT be decades old unless the values have not changed much. The state forces counties to reassess if the sale values get too far out of whack with the assessed values for too long. I cannot speak for other parts of the country.
Stoid, my point was that your buddy cannot get their desired goal sitting at a computer, and not spending much money. It simply isn’t going to happen. Deriving even modest levels of accuracy in real estate valuation requires comprehensive market knowledge of the commercial or raw land real estate at issue, historical knowledge of sales activity, knowledge about the zoning, infrastructure, development requirements, market demand, and the list goes on and on.
If you are looking for some sort of metric baseline choose one per my example , but the accuracy will be very poor.
That you want this information for properties scattered across the entire US in different use categories without spending much effort or money is a ludicrous objective. Hell, people can spend thousands on professional appraisals, and still be way off the market value of what something actually sells for given the volatility of current real estate market dynamics. I deal with this scenario every day of the week and I’m sure Musicat does as well.
I am unaware of real estate tax assessments that are “decades old”. I am mainly familiar with the Eastern US and most states I am familiar with do rolling updates of assessed values every few years to keep market valuations (relatively) current.