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Coles RESTRICTED USE APPRAISAL REPORT 13922 91st ST NW Otsego, MN 55330 PID# 118-500-221202 Prepared for: 2022 Otsego Board of Appeal and Equalization By: Michael Vanderlinden, SAMA Property Appraiser, Wright County Minnesota Assessor License #2957 & Jaimee Jensen Property Appraiser, Wright County Minnesota Assessor License #4284 Appraisal Date: January 2, 2022 2 TABLE OF CONTENTS General Information Page # Letter of Transmittal 3 Summary of Salient Facts & Conclusions 4 Property Rights Appraised 6 Purpose of the Appraisal 6 Definition of Market Value 6 Effective Date of the Appraisal 6 Descriptive Data Subject Location 7 Subject Photos 8-9 Subject Improvement Sketch 10 Subject Improvements 11 Valuation Sales Comparison Approach 12-16 Final Reconciliation 20 Certification 21 General Underlying Assumptions and Limiting Conditions 22-23 3 LETTER OF TRANSMITTAL May 9th, 2022 City of Otsego 2022 Board of Appeal and Equalization Reconvene Otsego, Minnesota Re: 2022 Estimated Market Value of 15613 90th St NE, Otsego MN 55330 Dear Board Members: We submit this Restricted Use Appraisal Report for your consideration of the above referenced property for the January 2nd, 2022 assessment date. As a Restricted Use Report, it is important to recognize that this report may not be properly understood without reference to additional information contained in the appraiser’s work file. 2022 Assessed Estimated Market Value $ 336,100 Market value of the fee simple interest as defined in this report $361,700 Recommended Action No Change Respectfully submitted, Property Appraiser, Wright County Minnesota Assessor License #2957 4 SUMMARY OF SALIENT FACTS & CONCLUSIONS   Location 15613 90th St NE  Wright County PID 118‐500‐221202  Legal Description Metes and bounds  Property Owner K. Joel Coles and Katherine Mathison  Purpose of the Appraisal To estimate the market value of the fee simple interest of the subject  property as of January 2, 2022  Land Size 5.0 GIS Acres  Zoning Ag  Land Use Plan Commercial  Highest and Best Use As Vacant: Commercial   As Improved: Residential   The property is currently valued as residential  Improvements 1980 split entry Dwelling   Wood frame on basement    1,020 Square Feet GLA above grade   Attached Garage 632 Square Feet  Sale History of the Subject   5 Sales Comparison Approach Value: Final Reconciled Estimate of Market Value: $361,700 (Three Hundred Sixty One Thousand Seven Hundred) 6 PROPERTY RIGHTS APPRAISED The subject real estate will be appraised by estimating the market value of the fee simple interest of the real property, assuming no encumbrances. Fee simple interest is defined as, “The most complete form of ownership is the fee simple interest-i.e., absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by governmental powers of taxation, eminent domain, police power, and escheat”.1 The complete bundle of rights includes but is not limited to the following:  The right to sell an interest  The right to lease an interest  The right to occupy the property  The right to mortgage an interest  The right to give an interest away Ownership of the fee simple interest is equivalent to ownership of the complete bundle of rights. This appraisal was for the purpose of developing an opinion of value for the real property. No personal property or intangible assets are included. PURPOSE OF THE APPRAISAL The purpose of this report is to arrive at a reliable estimate of market value of the fee simple interest of the real property of the subject property, as of the effective date of the 2022 Assessment, January 2nd, 2022, for taxes payable in 2023. DEFINITION OF MARKET VALUE The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently, knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:  Buyer and seller are typically motivated;  Both parties are well informed or well advised, and each acting in what they consider their own best interest;  A reasonable time is allowed for exposure in the open market;  Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and  The price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.2  EFFECTIVE DATE OF THE APPRAISAL The effective date of the appraisal is January 2nd, 2022. The property inspection of the subject property was conducted on April 4th, 2022 by Mike Vanderlinden (Property Appraiser). 1 Appraisal Institute, The Appraisal of Real Estate, 13th ed. (Chicago: Appraisal Institute, 2013), 5.  2 Appraisal Institute, The Dictionary of Real Estate Appraisal, 4th ed. (Chicago: Appraisal Institute, 2002), 177‐178.  7 SUBJECT LOCATION 8 SUBJECT PHOTOS 9 SUBJECT PHOTOS 10 SUBJECT IMPROVEMENT SKETCH Foundation Square Feet 996  Attached Garage Square Feet 632  Main Level Finished Square Feet 1020  Lower Level Finished Square Feet  702  Gross Living Area Square Feet (above grade)  1020  Total Finished Square Feet  1722  SUBJECT IMPROVEMENTS 11   Type of Building: Single Family Dwelling Date of Construction: 1980  Effective Age / Effective Year Built 34 / 1988  Construction Type / Quality: Class D ‐ Good: Wood Framed (2x4) Quality of Construction / Grade: 6.5  General Condition: Average  Number of Stories: One Story  Foundation Size: One with basement 936 sf, one with crawl 60 sf Gross Living Area (GLA): 1,020 Square Feet (Above Grade) Basement Finish Area: 702 Square Feet Total Finished Square Feet: 1,722 Square Feet   Substructure: 8"x16" Concrete Footing and approx. 4" Concrete Slab Foundation Type: 8" Concrete Block Foundation Shape: Rectangular Exterior Wall: Masonite Lap & Architectural asphalt shingles Windows: Casement & Double Hung Roof Type: Gable– 4/12 to 9/12 roof pitch Roof Cover: Architectural Asphalt Floor System: ½ “ plywood over 2 x 8 floor joists Framing: Framed w/ 2x4 lumber, 16" on center w/ 7/16” OSB Shthg.   Insulation: R‐21 ‐ Wall Insulation & Spray Foam Interior Walls: 1/2 " Gypsum Drywall, Taped and Painted  Interior Ceiling: Drywall   Interior Flooring: Carpet, Linoleum Doors: Hollow core Luan and oak trim Cabinets: Oak w/ Formica Counters Trim/Millwork: Oak  Heating:  Gas Forced Air Cooling: Central AC  Plumbing: Adequate  Electrical: Adequate  Ventilation: Adequate   Fenestration: Adequate  Total Number of Bedrooms: 3   Bedroom Location: 1 Main Level, 2 Lower Level Total Number of Bathrooms: 2  Bathroom Location: One Full. main level, One Full Lower Level Entrances: 3 ‐ 2 from exterior, 1 from attached garage Garage: 632 Square Feet, 2 Car Attached Walkouts: None  Fireplaces: None   Open Porch: Yes – 48 sf open front  Screen Porch: None  Deck SF: None  Patio SF: None  Driveway Surface: Gravel Driveway Parking Spaces: 2 exterior spaces 12            SALES COMPARISON APPROACH The sales comparison approach involves the analysis and correlation of data on similar recently sold properties. This approach to value is based on the principle of substitution which states that “when several similar or commensurate commodities, goods, or services are available, the one with the lowest price will attract the greatest demand and widest distribution”.3 Thus, sales in the open market of properties with generally similar characteristics and utility are good indicators of value. This approach also relies on the concept of value in exchange, which measures under market conditions what informed purchasers would offer for a property given the comparisons they make and the alternatives available for consideration. This approach gives a direct indication of the actions of buyers and sellers in the real estate market. The sales comparison approach is a very reliable approach to value in estimating values of single-family properties. The key to reliability of the sales comparison approach is directly related to the adequacy of the market sales information and the degree of similarity of those sales to the subject property. When comparable sale properties have been located, adjustments must be made to those properties for differences between the factors that were considered in examining the comparable sales. Typical adjustments include the following: 1. Time of Sale 2. Personal property sold with real estate & seller concessions 3. Terms and/or conditions of sale 4. Physical characteristics 5. Age, quality and condition of improvements Adjustments are always made to the comparable sale, never to the subject property. The total adjustment for each comparable is the sum of several individual items adjusted for in each sale. In the sales comparison approach, appraisers estimate a price per unit. The unit of comparison may be the property as a whole; or some smaller unit of measurement, considering that the subject property and the comparable properties are single family residences. The units of comparison that are most commonly used and analyzed will include: 1. Per dwelling 2. Per square foot of above grade Gross Living Area (GLA) 3. Per square foot of Total Finished Square Feet (TFSF) which includes both above and below grade finished square feet. In determining an appropriate unit of comparison for the subject property, the appraisers considered the ranges of variation of individual units of comparison. Most buyers are not skilled at calculating an actual square footage but do understand the component of space and what would be visually appealing. The same utility can be met with having different square 3   Appraisal Institute, The Dictionary of Real Estate Appraisal, 4th ed. (Chicago: Appraisal Institute, 2002), 177‐178.  13 footages. Most buyers and sellers of single-family residential properties purchase a home based on the property as a whole therefore, the most appropriate unit of comparison is per dwelling unit. The final adjusted sales prices were weighted based on overall comparability to the subject to arrive at a reconciled final indication of market value. . The following pages contain photographs and descriptive information of the comparable properties. Summaries of the adjustments used by the appraisers in the sales comparison approach grid can be found below with analysis in the complete work file of the property. TIME ADJUSTMENT  Minnesota Department of Revenue Sale Study   SITE SIZE  $18,500/acre – market extracted surplus land value > 1 ac, < 5 ac  $11,500/ac ‐ market extracted surplus land value > 6 ac < 10 ac           SITE IMPROVEMENTS  Cost to make comparable   QUALITY OF CONSTRUCTION  5% per half grade – Wright County Residential Grade Table  EFFECTIVE AGE/ CONDITION  Wright County Market Derived Residential Depreciation Table  GROSS LIVING AREA SF  $40/square foot – Contributory value  BASEMENT FINISH SF  $30/square foot – Contributory value  BEDROOMS  $3,000 per bedroom   BATHS  $3,000 per bath  FIREPLACE  $3,500/ Unit  WHIRLPOOL/SAUNA  $500/ Unit  WALKOUT/LOOKOUT  $7,500/ Unit Walkout  EXTRA KITCHEN/BAR  Cost to make comparable  PORCHES:  $30/square foot for Open   PRIMARY GARAGE: $12,000 per stall  DECK/PATIO SF  $10/square foot  EXTRA FEATURES/BLDGS  Market depreciated cost to make comparable  14 COMPARABLE SALE #1                        PID:  118‐500‐353301  ADDRESS:  16032 62 nd St NE  CITY/TOWNSHIP:  City of Otsego  DATE OF SALE:  03/23/2022  GROSS SALE PRICE:  $424,900  NET SALE PRICE:  $424,900  BUYER:  Unknown     SELLER:  Linda and Gary Nelson  SOURCE:  eCRV, MLS, County Property Files  YEAR BUILT:  1967  EFFECTIVE YEAR BUILT:  1974  CONSTRUCTION TYPE:  Split Entry ‐ Single Family Wood Framed Dwelling  QUALITY & CONDITION:  7 & Average  GROSS LIVING AREA: 1,218 Square Feet  BASEMENT FINISH AREA:  558 Square Feet  TOTAL FINISHED SF:  1,772 Square Feet  TOTAL GARAGE AREA:  768 Square Feet   ATT. GAR. STALLS:  2   BEDROOMS:  4  BATHROOMS:  2  LAND AREA:  7.98 Acres  GROSS PRICE PER TOTAL FINISHED SQUARE FEET:  $239.79    15 COMPARABLE SALE #2                     PID:  118‐052‐010030  ADDRESS:  8435 Parell Ave NE  CITY:  City of Otsego  DATE OF SALE:  1/11/2022  GROSS SALE PRICE:  $343000  NET SALE PRICE:  $334000  BUYER:  Unknown  SELLER:  Anastasiya and Vadim Brutskly    SOURCE:  eCRV, MLS, local assessor files  YEAR BUILT:  1993   EFFECTIVE YEAR BUILT:  2001  CONSTRUCTION TYPE:  Split Entry ‐ Single Family Wood Framed Dwelling   QUALITY & CONDITION:  7 & Average  GROSS LIVING AREA: 1,120 Square Feet  BASEMENT FINISH AREA:  832 Square Feet  TOTAL FINISHED SF:  1,952 Square Feet  TOTAL GARAGE AREA:  484 Square Feet  ATT. GAR. STALLS:  2  BEDROOMS:  4  BATHROOMS:  2  LAND AREA:  1.15 Acres  GROSS PRICE PER TOTAL FINISHED SQUARE FEET:  $175.72                    16 COMPARABLE SALE #3                   PID:  118‐129‐001020  ADDRESS:  16023 62 nd St NE  CITY/TOWNSHIP:  Otsego  DATE OF SALE:  3/23/2022  GROSS SALE PRICE:  $335,000  NET SALE PRICE:  $327,000  BUYER:  Unknown  SELLER:  Ronald Dittburner  SOURCE:  MLS, Wright County GIS  YEAR BUILT:  1987  EFFECTIVE YEAR BUILT:  1993  CONSTRUCTION TYPE:  Split Entry ‐ Single Family Wood Framed Dwelling  CONDITION:  7.5 & Average  GROSS LIVING AREA:  828 Square Feet  BASEMENT FINISH AREA:  653 Square Feet  TOTAL FINISHED SF:  1481 Square Feet  TOTAL GARAGE AREA:  1008 SF Detached Garage  ATT. GAR. STALLS:  0   BEDROOMS:  3  BATHROOMS:  2  LAND AREA:  3.08 Acres  GROSS PRICE PER TOTAL FINISHED SQUARE FEET:  $226.20        17 MAP OF COMPARABLE SALES 18 SALES COMPARISON ADJUSTMENT GRID 19 The estimated market value of the subject property derived from the sale comparison approach on the given appraisal date is: As of January 2nd, 2020: $361,700 (rounded) 20 FINAL RECONCILIATION In the appraisers’ opinion, the comparable sales have been properly adjusted to indicate a fair market value for the subject property. The market may not find the design, floor plan or lot to be as desirable as the current owners/builders have. This analysis was used to determine the proper weight of each comparable to arrive at a credible estimate of market value. Final Reconciled Estimate of Market Value: $361,700 (Three Hundred Sixty One Thousand Seven Hundred Dollars) (Rounded) 21 CERTIFICATION We certify that, except as otherwise noted in the appraisal report: We have no present or contemplated future interest in the real estate that is the subject of this appraisal report. We have no personal interest with respect to the property that is the subject of this report nor with the parties involved. My compensation is not contingent upon the valuation conclusions within the appraisal report. To the best of our knowledge and belief the statements of fact contained in this appraisal report, upon which the analyses, opinions and conclusions expressed herein are based, are true and correct. This appraisal report sets forth all of the limiting conditions affecting the analyses, opinions and conclusions contained in this report. The appraisal assignment was not based on a requested minimum valuation, a specific valuation, or approval of a loan. This appraisal report has been made in conformity with the Uniform Standards of Professional Appraisal Practice. No one provided significant assistance in preparation of the analyses, conclusions, and opinions concerning the real estate that are set forth in this appraisal report to the undersigned. Mike Vanderlinden Property Appraiser, Wright County Minnesota Assessor License #2957 Jaimee Jensen Property Appraiser, Wright County Minnesota Assessor License #4284 22 GENERAL UNDERLYING ASSUMPTIONS The legal description used in this report is assumed to be correct. No responsibility is assumed for matters of a legal nature affecting title to the property nor is an opinion of title rendered. The title is assumed to be good and merchantable. Information furnished by others is assumed to be true, correct and reliable. A reasonable effort has been made to verify such information; however, no responsibility for its accuracy is assumed by the appraiser. All mortgages, liens, encumbrances, leases, and servitudes have been disregarded unless so specified within the report. The property is appraised as though under responsible ownership and competent management. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures which would render it more or less valuable. No responsibility is assumed for such conditions or for engineering which may be required to discover such factors. It is assumed that there is full compliance with all applicable federal, state and local environmental regulations and laws unless non-compliance is stated, defined and considered in the appraisal report. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless an exception has been stated, defined and considered in the appraisal report. It is assumed that all required licenses, consents or other legislative or administrative authority from any local, state or national governmental or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based. It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless noted within the report. It is assumed that information provided by the petitioner pertaining to the subject property is correct unless otherwise noted. 23 GENERAL LIMITING CONDITIONS The appraisers will not be required to give testimony or appear in court because of having made this appraisal, with reference to the property in question unless arrangements have been previously made therefore. Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose or by any person other than the party to whom it is addressed without the written consent of the appraiser, and in any event, only with properly written qualification and only in its entirety. The distribution of the total valuation in this report between land and improvements applies only under the reported highest and best use of the property. The allocations of value for land improvements must not be used in conjunction with any other appraisal and are invalid if so used. Neither all nor any part of the contents of this report, or copy thereof, shall be conveyed to the public through advertising, public relations, news, sales of any other medium without written consent and approval of the appraiser. Nor shall the appraiser, firm, or professional organization of which the appraiser is a member be identified without written consent of the appraiser.