Humber Real Estate - Course 4, Module 14: Transactions Involving Development Land and Farms Questions and Answers Already Passed

Humber Real Estate - Course 4, Module 14: Transactions Involving Development Land and Farms Questions and Answers Already Passed What are 3 key factors that an appraiser considers when estimating the highest and best use of an undeveloped vacant site? - Zoning - the highest and best use should conform with the zoning, unless there is a probable and imminent prospect that the zoning will change or be amended to accommodate the highest or best use estimate not currently legal - Physical possibility of the proposed use in relation to factors such as the size or shape of the lot, soil condition, water drainage, etc. - The demand for the proposed use along with its economic and financial feasibility To estimate highest and best use for an improved site, the improvements must: - Either conform to the zoning or be legal non-conforming - Conform to the other buildings in the area - Add value to the land Land assembly is more commonly known as what? Plottage What is Land Assembly? A process that involves acquiring multiple parcels of property and combining them, thereby increasing the total land's overall value (vs. their worth separately). A larger parcel of land may have greater utility and potential for development. A land developer may find one larger parcel of land more appealing than several small ones. What types of properties appeal to land developers? - Raw land (in its natural state), with no services - Vacant land with services - Unoccupied property up to 5 acres with improvements - Large tracts of land (5 acres or more) ready for a change in use - Farmland (operational or not) - Smaller properties available for assemblage - Brownfield sites because these sites are frequently located in desirable urban locations and have the advantage of in-place infrastructure, such as roads, utilities, water/sewer services, schools and transit facilities Generally risk is assessed as either ____________ or ____________. External, internal. External risks are often what? Beyond the control of the investor. Internal risks are what? Created by the management decisions of an organization. Most risk analysts divide risk into what 4 broad segments? - Financial issues - Market issues - Business issues - Building issues What is the Places To Grow Act? A legislation that provides for growth plans that establish long-term strategies for identified growth areas. It also requires that all decisions under the Planning Act or Condominium Act conform to a growth plan as soon as the growth plan is effective. The Places To Grow Act enables what? - Designation of any geographic region of the province as a growth area with a specific focus - Development of a growth plan in consultation with local officials, stakeholders, public groups and members of the public and indigenous communities for a particular region - Decisions about growth to be made in ways that promotes greater housing and transportation options; investments in regional public service facilities in downtown areas; and maximizes infrastructure investments in communities while balancing regional needs for farmland and natural areas Buyer needs generally fall into 3 categories: - Physical requirements: Specific needs such as site characteristics & transportation - Investor/user objectives: General goals of the buyer, including type of property being sought, investment return (if applicable), lease vs. own & type of ownership - Financial requirements: Amount of capital, other financial resources, credit standing & financial history What key information should a salesperson gather and verify regarding a development land? - Key documentation such as existing zoning verification - Restrictive covenants or title restrictions that apply to the property - Favourable or unfavourable environmental conditions - Transportation services - Other available services - List of expenses to plan for the effort involved in extending these services - Current economic climate for this type of investment - Physical features of the development land - Tax incentives - Easements What are some potential sources of land contamination? - Any