How to Value Land Prior to Lot Line Adjustment

[elsaone]

My question involves real estate located in the State of: California

I am looking for advice as to how I can determine the value of my property. The home we own is on a very wide lot, and our next door neighbors would like to buy a portion of it to widen their very narrow lot (approximately 3,500 sq ft).
We bought this house almost 3 years ago, and when we went into escrow on the property, these neighbors immediately approached our agent about the transaction. They mentioned they were interested in .18 acres, which is the maximum we would be able to sell within keeping of the zoning requirements of our neighborhood. The price they mentioned at the time was $50K. Now, we have finally gotten around to dealing with this and since we are not going to be selling them the full amount, we are not sure how to value the amount we have agreed upon. Some key points:

• The neighbors are already planting on our land, and have been since before we bought it. They do not have any legal right to do this, but we have not had a problem with it so far as it is not disrupting our use of the space.
• We understand that after 3 years of encroachment, the property can legally become theirs, which is why we have approached them about resolving it now.
• They have been very eager to legally take ownership and have paid a surveyor to start the process; we are also friendly with them and do not want to seem like we are taking advantage of the situation, but we want to make sure that we don't sell them the property for a price so low as to not compensate for any future loss of value due to the smaller lot size.
• There are 2 easements on the land they want to buy, one from the utility company and one from the neighbors who live behind both our houses. They arranged the easement for drainage purposes with the previous owner of our home. It is my understanding that it would benefit us to no longer have any easements attached to our property...
  We do have a mortgage, so I am concerned that the lender will need to somehow be involved or approve of the valuation but I am not sure how this works. Our property tax bill shows the land value at a price per sq ft that would come to quite a bit more than the $50K they initially mentioned, but is this the correct way to figure the value?

Can anyone help?

[jk]

I am looking for advice as to how I can determine the value of my property.

hire a licensed appraiser




I would strongly suggest you hire a lawyer to properly execute the deed(s) so there is no ambiguity or mistakes that could cause problems in the future.

We understand that after 3 years of encroachment, the property can legally become theirs, which is why we have approached them about resolving it now.

Nope, not that easy in California but to defeat the claim, simple send a letter giving them permission to use the land (and describe it as accurately as possible and further note that permission can be revoked at any time for any reason. Permissive use of property defeats an adverse possession claim.

We do have a mortgage, so I am concerned that the lender will need to somehow be involved or approve of the valuation but I am not sure how this works.

they will have to approve of the divesting of the ownership. They don't care if you give it away or make a million bucks from it. All they care about is you are messing with their security interest for the loan they carry.

[LandSurveyor]

Our property tax bill shows the land value at a price per sq ft that would come to quite a bit more than the $50K they initially mentioned, but is this the correct way to figure the value?

Then it is likely worth more than the $50k offered. It is worth whatever you are willing to accept and they are willing to pay. That is the only way to set a value on it. Don't leave money on the table. Get your attorney involved in the actual negotiations so you don't fall into the "nice neighbor" negotiating mode.

As jk points out, your lender will have to sign off on this and if you appear to be undercutting their security interest in any way it will not work. Also understand that if they do approve, it is quite possible that they will say to just send all of the proceeds over to them and they will approve the sale and apply the proceeds to your principal loan amount.

[eapls2708]

A Lot Line Adjustment is a fairly simple process in CA. A land surveyor can take care of the technical work and submittals to the local agency for you. You can use an attorney or a title company to ensure that the correct deed forms are used, although some surveyors may have the requisite experience to do that as well. Hire an appraiser familiar with your area for the valuation.

If you think that there will be negotiations and/or you want someone to coordinate the efforts for you, then hiring an attorney who practices real estate and land use matters is a good idea.