Site and Land Concepts
Understanding and evaluating a site or land
The first step in site valuation is to identify the legal and physical characteristics of the parcel being appraised. The primary objective of this analysis is to gather data that will lead the appraiser to the highest and best use of the site as though vacant. Site analysis involves determining the site’s usefulness. This objective is completed before the value of the site can be estimated. The study of basic site characteristics involves identifying the subject parcel by either the common description or the legal description and the consideration of all relevant title and record data. Title and record information includes ownership history, the ownership rights appraised, zoning and land use control regulations, entitlements, private restrictions, tax assessment information, and any easements of record. An entitlement, as it relates to real estate and land planning, is a legal right to do something that otherwise would be subject to approval by a specified public agency. Entitlements are the result of a legal process by which one obtains a permit to allow development of the land and/or construction of the building improvement on the site. Physical site characteristics that should be analyzed and considered are size and shape, soil conditions, site situation, topography, flood hazards, and any site improvements.
Plottage and Assemblage
Factors that affect the marketability and value of a site are those of plottage, excess land, and surplus land. Plottage is the increment of value created when two or more sites are combined to produce greater utility. The process is called assemblage. By assembling smaller lots, a larger parcel is produced, which may be suitable for a more valuable use than a small parcel.
Excess and Surplus land
In the site valuation process, appraisers distinguish between excess and surplus land. Excess land is the area not needed to accommodate the site’s primary highest and best use. This term describes an improved property that has an above-average amount of land and is the area that may be separated from the primary site and developed on the basis of its own highest and best use. It is important to note that this land should be marketable and have future value. Surplus land, on the other hand, is the site area that is not needed to support the highest and best use of an existing building improvement. The difference between excess and surplus land is that surplus land does not have an independent highest and best use. In other words, it cannot be sold separately because of its physical limitations, legal restrictions, or building placement.