Lessons Learned From Mineral Appraisal With Subsequent Market Sale ? Introduction

When originally accepting the assignment, the Client had described the property as vacant land. A prior appraisal was later discovered and revealed that the property included a mineral rights appraisal. Further research disclosed an old dispute with a court ruling based on testimony by AIMA-certified experts. The present appraisal was therefore based on data from findings of the court with a fresh look at discount rate, absorption period, and residual land value. Fortuitously, the property subsequently sold on the market, while meeting all criteria for Fair Market Value. This provided insight into a market-based discount rate. Also, the absorption period could be adjusted in accordance with the current market conditions. The residual land value was minimal (based on comparable sales and projecting trends in market) as the property was affected by a flood zone and the surrounding development was sparse. PROPERTY HISTORY: A GREAT INVESTMENT Briefly, the subject property is located in the floodplain region of the San Jacinto River, a short river in southeastern Texas that flows into Galveston Bay, filled with sand and gravel. This location is on the north side of Houston, north of Beltway 8 on the east side of I-59.