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Heidner RESTRICTED USE APPRAISAL REPORT 13922 91st ST NW Otsego, MN 55330 PID# 118-015-001140 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 5 Purpose of the Appraisal 5 Definition of Market Value 5 Effective Date of the Appraisal 5 Descriptive Data Subject Location 6 Subject Photos 7-8 Subject Improvement Sketch 9 Subject Improvements 10 Valuation Sales Comparison Approach 11-23 Final Reconciliation 24 Certification 25 General Underlying Assumptions and Limiting Conditions 26-27 3 LETTER OF TRANSMITTAL May 9th, 2022 City of Otsego 2022 Local Board of Appeal and Equalization Buffalo, Minnesota Re: 2022 Estimated Market Value of 13922 91st St NE, Otsego, MN 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 $ 388,800 Market value of the fee simple interest as defined in this report $ 420,900 Recommended Action No Change Respectfully submitted, Property Appraiser, Wright County Minnesota Assessor License # 4 SUMMARY OF SALIENT FACTS & CONCLUSIONS Location 13922 91st St NE Wright County PID 118-015-001140 Legal Description Lot 14, Block 1; Great River Acres, Wright County, MN Property Owner Vernon and Gloria Heidner 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 3.1 GIS Acres Zoning Long Range Urban Service Area, Large Lot. R-2 Land Use Plan LD Residential Highest and Best Use As Vacant: Residential As Improved: Residential The property is currently at it’s Highest and Best Use Improvements 1971 One Story Dwelling Wood frame on basement / crawl 2,382 Square Feet GLA above grade Attached Garage 440 Square Feet Sale History of the Subject Sales Comparison Approach Value: Final Reconciled Estimate of Market Value: $420,900 (For Hundred Twenty Thousand Nine Hundred Dollars) 5 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. 6 SUBJECT LOCATION 7 SUBJECT PHOTOS 8 SUBJECT PHOTOS 9 SUBJECT IMPROVEMENT SKETCH Foundation Square Feet 1,508 Attached Garage Square Feet 440 Main Level Finished Square Feet 2,382 Lower Level Finished Square Feet 576 Gross Living Area Square Feet (above grade) 2,382 Total Finished Square Feet 2,958 10 SUBJECT IMPROVEMENTS Type of Building: Single Family Dwelling Date of Construction: 1978 Effective Age / Effective Year Built 42 / 1980 Construction Type / Quality: Class D - Good: Wood Framed (2x6) Quality of Construction / Grade: 7.0 General Condition: Average Number of Stories: One Story Foundation Size: One with basement 1442 sf, one with crawl 504 sf Gross Living Area (GLA): 2,382 Square Feet (Above Grade) Basement Finish Area: 576 Square Feet Total Finished Square Feet: 2,958 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 & Fixed Windows 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, Ceramic Tile, 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: 3 Main Level Total Number of Bathrooms: 3 Bathroom Location: Three Full. main level Entrances: 3 - 2 from exterior, 1 from attached garage Garage: 440 Square Feet, 2 Car Attached Walkouts: None Fireplaces: Yes – 1 Total, Main Level Gas Open Porch: Yes – 66 sf open front Screen Porch: None Deck SF: None Patio SF: None Driveway Surface: Bituminous Driveway Parking Spaces: 4+ exterior spaces 11 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. 12 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 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 WALKOUT/LOOKOUT $7,500/ Unit Walkout EXTRA KITCHEN/BAR Cost to make comparable PRIMARY GARAGE: $5,000 per stall DECK/PATIO SF $10/square foot EXTRA FEATURES/BLDGS Market depreciated cost to make comparable 13 COMPARABLE SALE #1 PID: 118-121-002020 ADDRESS: 10565 97th St NE CITY/TOWNSHIP: City of Otsego DATE OF SALE: 06/04/2021 GROSS SALE PRICE: $319,000 NET SALE PRICE: $316,500 BUYER: Grant Wingness & Alexandra Thiebault SELLER: Craig Jones & Ryan and Mona Edick SOURCE: eCRV, MLS, County Property Files, Plans YEAR BUILT: 1978 EFFECTIVE YEAR BUILT: 1988 CONSTRUCTION TYPE: One Story - Single Family Wood Framed Dwelling QUALITY & CONDITION: 7 & Average GROSS LIVING AREA: 1,104 Square Feet BASEMENT FINISH AREA: 440 Square Feet TOTAL FINISHED SF: 1,544 Square Feet TOTAL GARAGE AREA: 576 Square Feet ATT. GAR. STALLS: 2 BEDROOMS: 4 BATHROOMS: 2 LAND AREA: 1.04 Acres GROSS PRICE PER TOTAL FINISHED SQUARE FEET: $288.95 14 COMPARABLE SALE #2 PID: 118-031-001170 ADDRESS: 14151 87th St NE CITY: City of Otsego DATE OF SALE: 12/13/2021 GROSS SALE PRICE: $250,000 NET SALE PRICE: $250,000 BUYER: Calvin & Patience Sayler SELLER: Wayne Ehlbrock, Jr SOURCE: eCRV, MLS, local assessor files YEAR BUILT: 1973 EFFECTIVE YEAR BUILT: 1983 CONSTRUCTION TYPE: 1 Story - Modular QUALITY & CONDITION: 6 & Average GROSS LIVING AREA: 1,248 Square Feet BASEMENT FINISH AREA: 0 TOTAL FINISHED SF: 1,248 Square Feet TOTAL GARAGE AREA: 1080 Detached Square Feet ATT. GAR. STALLS: 0 BEDROOMS: 3 BATHROOMS: 1 LAND AREA: 2.5 Acres GROSS PRICE PER TOTAL FINISHED SQUARE FEET: $200.32 15 COMPARABLE SALE #3 PID: 118-015-001030 ADDRESS: 14263 95th St NE CITY/TOWNSHIP: Otsego DATE OF SALE: 02/12/2021 GROSS SALE PRICE: $340,000 NET SALE PRICE: $335.000 BUYER: B & T Custom Homes SELLER: Shawn Thompson SOURCE: MLS, Wright County GIS YEAR BUILT: 1969 EFFECTIVE YEAR BUILT: 1995 CONSTRUCTION TYPE: 1 Story - Single Family Wood Framed Dwelling CONDITION: 7.0 & Average GROSS LIVING AREA: 1,180 Square Feet BASEMENT FINISH AREA: 900 Square Feet TOTAL FINISHED SF: 2,080 Square Feet TOTAL GARAGE AREA: 864 SF Detached Garage ATT. GAR. STALLS: 0 BEDROOMS: 3 BATHROOMS: 2 LAND AREA: 3.08 Acres GROSS PRICE PER TOTAL FINISHED SQUARE FEET: $163.46 16 COMPARABLE SALE #4 PID: 118-017-001060 ADDRESS: 9175 Ochoa Ave NE CITY/TOWNSHIP: Otsego DATE OF SALE: 7/1/2021 GROSS SALE PRICE: $395,000 NET SALE PRICE: $383,100 BUYER: Dustin Scharber SELLER: Ronald Dobbelaire SOURCE: eCRV, MLS, Local Assessor Files YEAR BUILT: 1979 EFFECTIVE YEAR BUILT: 1989 CONSTRUCTION TYPE: 3 Level Split Enrty - Single Family Wood Framed Dwelling QUALITY & CONDITION: 7.0 & Average GROSS LIVING AREA: 1,476 Square Feet BASEMENT FINISH AREA: 749 Square Feet TOTAL FINISHED SF: 1550 Square Feet TOTAL GARAGE AREA: 484 Att. Square Feet ATT. GAR. STALLS: 2 BEDROOMS: 3 BATHROOMS: 2 LAND AREA: 1.09 Acres GROSS PRICE PER TOTAL FINISHED SQUARE FEET: $254.84 17 COMPARABLE SALE #5 PID: 118-050-001010 ADDRESS: 14817 95th St NE CITY/TOWNSHIP: Otsego DATE OF SALE: 4/19/2022 GROSS SALE PRICE: $400,000 NET SALE PRICE: $400,000 BUYER: UNKNOWN SELLER: Roger and Jayne Lund Trust SOURCE: MLS, Wright County GIS YEAR BUILT: 1964 EFFECTIVE YEAR BUILT: 1964 CONSTRUCTION TYPE: 1 Story - Single Family Wood Framed Dwelling CONDITION: 6.5 & Average GROSS LIVING AREA: 2,878 Square Feet BASEMENT FINISH AREA: 823 Square Feet TOTAL FINISHED SF: 3,701 Square Feet TOTAL GARAGE AREA: 960 SF Detached garage ATT. GAR. STALLS: 0 BEDROOMS: 5 BATHROOMS: 3 LAND AREA: 3.1 Acres GROSS PRICE PER TOTAL FINISHED SQUARE FEET: $108.08 18 COMPARABLE SALE #6 PID: 118-015-002160 ADDRESS: 13921 91st St NE CITY/TOWNSHIP: Otsego DATE OF SALE: 7/9/2021 GROSS SALE PRICE: $475,000 NET SALE PRICE: $475,000 BUYER: Isaac and Karie Wilson SELLER: Steven Bucholz SOURCE: MLS, Wright County GIS YEAR BUILT: 1986 EFFECTIVE YEAR BUILT: 2010 CONSTRUCTION TYPE: 4 Level Split - Single Family Wood Framed Dwelling CONDITION: 7.0 & Average GROSS LIVING AREA: 1,786 Square Feet BASEMENT FINISH AREA: 806 Square Feet TOTAL FINISHED SF: 2,592 Square Feet TOTAL GARAGE AREA: 860 SF ATT. GAR. STALLS: 3 BEDROOMS: 4 BATHROOMS: 3 LAND AREA: 4.68 Acres GROSS PRICE PER TOTAL FINISHED SQUARE FEET: $265.96 19 COMPARABLE SALE #7 PID: 118-015-002170 ADDRESS: 9175 Nellmark Ave NE CITY/TOWNSHIP: Otsego DATE OF SALE: 5/19/2021 GROSS SALE PRICE: $470,000 NET SALE PRICE: $470,000 BUYER: Gregory and Renee Sophie SELLER: Barthel Living Trust SOURCE: MLS, Wright County GIS YEAR BUILT: 1976 EFFECTIVE YEAR BUILT: 1984 CONSTRUCTION TYPE: 4 Level Split - Single Family Wood Framed Dwelling CONDITION: 7.0 & Average GROSS LIVING AREA: 1,628 Square Feet BASEMENT FINISH AREA: 500 Square Feet TOTAL FINISHED SF: 2,128 Square Feet TOTAL GARAGE AREA: 676 SF ATT. GAR. STALLS: 3 Car Attached BEDROOMS: 4 BATHROOMS: 3 LAND AREA: 1.58 Acres GROSS PRICE PER TOTAL FINISHED SQUARE FEET: $220.86 20 COMPARABLE SALE #8 PID: 118-015-002180 ADDRESS: 9179 Nelmark Ave NE CITY/TOWNSHIP: Otsego DATE OF SALE: 10/22/2021 GROSS SALE PRICE: $450,000 NET SALE PRICE: $450,000 BUYER: Jodi and Adam Johannes SELLER: Gregory and Rsoemary Hegi SOURCE: MLS, Wright County GIS YEAR BUILT: 1990 EFFECTIVE YEAR BUILT: 2005 CONSTRUCTION TYPE: Mod. 2 Story - Single Family Wood Framed Dwelling CONDITION: 7.5 & Average GROSS LIVING AREA: 2,264 Square Feet BASEMENT FINISH AREA: 757 Square Feet TOTAL FINISHED SF: 3,021 Square Feet TOTAL GARAGE AREA: 992 SF ATT. GAR. STALLS: 4 Car Attached BEDROOMS: 4 BATHROOMS: 3 LAND AREA: 5.70 Acres GROSS PRICE PER TOTAL FINISHED SQUARE FEET: $148.95 21 MAP OF COMPARABLE SALES 22 SALES COMPARISON ADJUSTMENT GRID 23 SALES COMPARISON ADJUSTMENT GRID (CONTINUED) 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: $420,900 (rounded) 24 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: $420,900 (Four Hundred Twenty Thousand Nine Hundred Dollars) (Rounded) 25 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 26 GENERAL UNDERLYING ASSUMPTIONS The legal description used in this report is assumed to be correct. No survey of the property has been made by the appraiser, and no responsibility is assumed in connection with such matters. 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. 27 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.