Property Q&A in Portland>Question Details

Hockeynutt, Home Owner in Portland, OR

I have an adjacent lot to my home and would like to sell a portion of that empty lot to a neighbor, how do I calculate the value of that portion?

Asked by Hockeynutt, Portland, OR Thu Sep 8, 2011

Help the community by answering this question:


The best thing you can do in this case is talk to an appraiser. Appraisers are the only professionals licensed to actually estimate value. Realtors can give you a BPO or CMA on properties but something like this is a complex valuation and beyond the scope of what is allowed under a real estate broker's license.

The process of determining the value of surplus land is not as simple as just dividing the value of your lot by the square footage of the site. It is way more involved than that. As an appraiser I have completed valuation assignment such as your numerous times, many times it is the government purchasing portions of land for road widening, etc., and can tell you from experience that it is an involved process.

Another responder mentioned zoning, setbacks and other legal issues that also must be considered. These are all areas that appraisers work with on a daily basis. Another thing to keep in mind is that the majority of the value associated with a site is in the "homesite." The surplus land (Land not necessary to support the highest and best use of the existing improvement and with no potential to accommodate future expansion of an existing or anticipated improvement.) may not contribute very much to the overall site value.

If I can be of any help please fell free to call or e-mail me.

Stephen Erving, SRA
State Certified Residential Appraiser
Willamette Valley Appraisal Professionals
Licensed Real Estate Broker
Keller WIlliams - Portland Central
0 votes Thank Flag Link Thu Sep 29, 2011
Before agreeing to sell a portion of this lot to your neighbor, you may want to talk to the city about how that will effect the future buildability of that lot. For instance, if the lot is currently 5000 sq ft, and you shave off 2000 sq ft for your neighbor, depending on the zoning, you may not be able to build on your lot in the future, which means the value of that lot has gone down dramatically.
0 votes Thank Flag Link Thu Sep 8, 2011
The value for the peice of land can be estimated by taking your full tax value and divide it by the sq ft of land and then multiply it by the amount of sq feet you are planning to sell. You probably will need to check with the planning office to make sure it is legal for you to sell off a portion of your land and the cost of doing so with them.
0 votes Thank Flag Link Thu Sep 8, 2011
Will you be selling a build-able tax lot or helping to create a new build-able tax lot? Is there another value that is being created by the sale?
0 votes Thank Flag Link Thu Sep 8, 2011
Hi Hockeynutt,

Make appropriate use of professionals in all aspects of this transaction. Since you are proposing to sell only a portion of the adjacent lot, you may need to obtain a lot line adjustment or create a separate parcel that can be transferred to your neighbor. You may want to consult with a real estate attorney to complete this process. Any appraiser will want to know if you are creating a separate lot or adjusting your lot lines. The cost of the lot line adjustment or lot division, including attorney fees and a survey, together with the appraisal costs, should be calculated into your valuation.

Portland Home Team
0 votes Thank Flag Link Thu Sep 8, 2011
A Realtor can help you with this or an appraiser. Some Realtors will help you with this transaction. It is important to have professional representation and you will find it easier with a professional negotiator helping you even if you know the neighbor.
Let me know if we can help?
Web Reference:
0 votes Thank Flag Link Thu Sep 8, 2011
A Realtor can help you establish a value and some will handle the transaction for you. Even if you have found the buyer it is important to be protected with professional representatrion.
Let me know if we can help?
Web Reference:
0 votes Thank Flag Link Thu Sep 8, 2011
Best if you find what is reasonable for you and your neighbor, as by itself most likely not buildable, that part you want to sell to the neighbor. It's hard to say, so look at the assessors real value may help you with a start. As a whole is it a buildable lot? A lot more is needed to define it down for you.

Best to you.

0 votes Thank Flag Link Thu Sep 8, 2011
HI Hockeynutt, The easiest best thing you can do is get an appraisal. You'll know the value at that point. Remember that even though you will have a price to put to the property.

All the best
Dave & Lisa
Web Reference:
0 votes Thank Flag Link Thu Sep 8, 2011
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