[AT] Pole building value

[charliehill]

Mike,  I think Roy is pointing you in the right direction.  Most insurance 
agencies  these days use a computer program by Marshall and Swift (or 
possibly some other vendors) that gives them the replacement value of 
building.  Tell them the details of the building and the age and they should 
be able to tell you what replacement cost and depreciated cost.

Remember this, replacement cost and depreciated cost might vary greatly from 
market value.  If a barn like that is "typical" of similar residential 
properties in that neighbor hood the market value might be similar to the 
depreciated cost.  If most folks in that neighborhood would want a barn like 
that but for reasons of lot size, changes in zoning law, etc. can not build 
such a barn then it's market value might exceed replacement value.  If most 
people in that neighborhood are typical suburbanite types and would never 
have a use for such a barn then the market value might be less than what it 
would cost to replace or construct.  In fact in some cases it might even 
lower the sales price of the house when compared to a similar house with no 
barn.  It's all driven by the dynamics of the particular neighborhood market 
you are located in.

I know that  is more info than you asked for but that is an appraisers 
answer to your question and you might find some of the explaination valuable 
if you attempt to finance the purchase.

I'm assuming the house is probably on a larger sized lot and in a somewhat 
rural area.  In that case I would not expect to pay more for the barn than 
the depreciated replacement cost.  The appraisal principle known as 
"substitution" states that no informed TYPICAL buyer will ever pay more for 
a property and it's improvements than it would cost to buy a similar site 
and construct the improvements.

I put TYPICAL in all caps because when it comes to mortgage appraisal 
everything is based on the TYPICAL buyer because the appraisal is for the 
lender and they want to know what they can expect to get for the property if 
the buyer defaults on the loan.

Hope this was helpful.

Charlie


----- Original Message ----- 
From: "Roy Morgan" <k1lky at earthlink.net>
To: "Antique tractor email discussion group" <at at lists.antique-tractor.com>
Sent: Thursday, September 24, 2009 11:51 PM
Subject: Re: [AT] Pole building value


>
> On Sep 24, 2009, at 10:54 PM, Mike Meulenberg wrote:
>
>> Hi all,
>> I'm looking at a house to buy that has a 30x40 pole barn... trying
>> to figure out what to value the barn at for an offer price.
>
> Call your farm insurance office.. have them make a guess on the basis
> that they may soon get to write the insurance on it.
>
> Roy
>
> Roy Morgan
> k1lky at earthlink.net
> 529 Cobb St.
> Groton NY, 13073
> Home: 607-898-3607
> Cell: 301-928-7794
>
>
>
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