A Day in the Life of Appraising Iowa-Nebraska-Florida

As an appraiser in Florida, in areas that allow AirBnb's; Seminole, Largo, Clearwater, Gulfport, Indian Rocks Beach, Madeira Beach I often get asked, "How do appraisers, the lending world and investors evaluate short term rental income on properties and what tools are available now in the market to evaluate earnings?  We are seeing this come up in our other markets we cover as well, Omaha, NE and Southwest IA.  

When considering short-term rental income on investment properties, lenders and investors typically assess various factors to evaluate the profitability and risk associated with this type of venture. Here are some key considerations:

1. Rental Income Potential: Lenders and investors analyze the rental income potential by examining the property's location, average rental rates in the area, demand for short-term rentals, and the property's unique features. They may study historical rental data, occupancy rates, and projected rental income based on market trends.
2. Occupancy and Seasonality: The occupancy rate and seasonality are crucial for short-term rentals. Lenders and investors may evaluate historical occupancy rates to determine the property's potential income throughout the year. They also consider peak and off-peak seasons, events, and tourism patterns that can influence rental demand.
3. Rental Management: The expertise and efficiency of property management play a significant role in the success of short-term rentals. Lenders and investors assess whether the property owner has professional management in place or reliable experience to manage the rental operations effectively.
4. Expenses: To ascertain the profitability of short-term rentals, lenders and investors consider the expenses associated with the property. These may include mortgage payments, property taxes, insurance, maintenance costs, utilities, marketing fees, cleaning fees, and management fees. Accurate projections of these expenses are crucial in determining the potential return on investment.
As for evaluating potential short-term rental earnings, several tools are available in the market:
1. Airbnb and Similar Platforms: Websites like Airbnb offer insights and analytics on rental properties, including average daily rates, occupancy rates, and seasonality trends. These platforms also provide valuable data on competing rentals in the area, helping investors evaluate pricing and potential earnings.
2. Rental Data Analytics Software: Various rental data analytics software, such as Mashvisor, AirDNA, and Beyond Pricing, provide detailed market analysis for short-term rentals. These tools offer information on rental demand, comparable property performance, revenue projections, and market trends.
3. Market Research Reports: Industry-specific market research reports can provide comprehensive analysis and insights into short-term rental markets. These reports often include data on average rental rates, occupancy rates, market growth projections, and emerging trends.
4. Local Real Estate Agents: Engaging with experienced local real estate agents who specialize in investment properties and short-term rentals can provide valuable information. Local agents have knowledge about market conditions, rental demand, and rental income potential specific to the area of interest.
Ultimately, analyzing both the lending perspective and utilizing available tools can help investors assess the viability of short-term rental income and make informed investment decisions.

Posted by Patricia Smith on February 3rd, 2024 2:19 PMLeave a Comment

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December 8th, 2022 2:38 PM

As a Certified Appraiser in Florida, I have had several occasions to appraise homes with solar panels.  Solar panels are becoming more and more common.  First, before valuing a solar system it is key to determine the ownership of the panels.  Most mortgage lenders, secondary market participants, and government mortgage insurers/guarantors have specific guidelines on giving value to Solar Panels. If the homeowner does not own the solar PV system, or it is leased, used as collateral for a personal property loan, or subject to a power purchase agreement (PPA) they are not considered real property and should not be "valued" as part of the real property. If the panels are owned and unincumbered, there are three approaches to determining the contributory value to the property. Income (GRM,Discounted Cash Flow), Cost, Sales Comparison.


The income and cost are relatively simple if you have all the data you need. The problem is getting the data. I use the homeowner, past utility bills, manufacturer, utility companies, county permits and a website called SEIA.  A great website PVValue.com does all the calculations for you. You simply plug in the data/factors, and it calculates the cost and income for you.  If we could base adjustments on these approaches, it would make valuing a home with a solar system very simple (as long as you have the factors). 

Keep in mind, appraisers are regulated by state and federal guidelines, and in addition appraisals are reported using lender guidelines.  The amount of electricity a PV system produces over its lifespan can be estimated by the appraiser by using the exact specifications of a specific PV system or obtained from the installer. It is not always possible to get the exact specifications of the subject or comparable PV systems as it is usually not disclosed by realtors in the MLS listings, and often not retained by a homeowner. If the details of a specific system cannot be obtained by the appraiser, the appraiser must outline the steps taken to attempt to collect the information and make extraordinary assumptions regarding the system or comparable homes. Fannie Mae and Freddie Mac regulate most of the mortgages and the guidelines are very clear that value cannot be given by these approaches alone and must be supported by the market. The market value approach requires that the appraiser demonstrate the impact on value based on paired sales analysis.  This can be a challenge given the lack of data.  There is an exception to this guideline, and that is FHA Insured loans.  In fact, FHA has a policy that a Solar System Purchase can be added on to the loan outside of the home’s value.  They also recognize there is a lack of data, and FHA guidelines support using the cost or income method.

If you are a homeowner or a real estate professional and want to include the contributory value of the subject’s system, please have a record of these items for the appraiser to assist them in the appraisal process.

PVValue.com in put factors: Address, Ownership type, System Watts, System Age, Warranty Period, Derate %, Degradation %, Discount %, Rebate % Array Type, Array Tilt, Array Azimuth, Inverter Size, Inverter Warranty Period, Age of Inverter, Replacement Cycle

Website Link https://www.seia.org/us-solar-market-insight

Posted by Alycia Hamaker on December 8th, 2022 2:38 PMLeave a Comment

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Fannie Mae announces adoption rule of ANSI Z765 residential real estate measuring standards. What does this mean for appraisers and real estate professional? 

Per Fannie Mae Announcement Letter SEL-2021-11.  Lenders may begin accepting appraisals using this standard immediately, but compliance is required for all applicable appraisals with an effective date on or after Apr. 1, 2022.
When I began my appraisal career in 1999, ANSI standards were fairly new to the residential real estate appraisal industry, and were not widely adopted yet by appraisers.  The process for creating a residential measuring standard didn't begin until 1994, and ANZI Z765 was official in 1996.  The standard has since been updated, the latest version is ANSI Z765-2021.  To this day, it is the only nationally recognized standard for measuring residential properties. 

This standard has been "voluntary" for residential appraisers and real estate professionals up until now.  For those who adopted it, it brought credibility when calculating square footage per a national recognized guideline.  Professional organizations have recognized these guidelines since its inception; Fannie Mae, Freddie Mac, HUD, VA, Appraisal Foundation, National Association of Homebuilders, Manufactured Housing Institute, American Institute of Architects, National Association of Realtors, Marshall & Swift Cost Guides and the Employee Relocation Council. (Distinctions of above grade and below grade, are broken down in the Marshall & Swift cost manual, and are consistent with the standard).

A quick summary of general rules and guidelines

Measurements of each are made to the exterior finished surface of the outside walls.  When measuring a second floor from inside the residence, the thickness of the walls is included in the calculations.

Areas protruding from a finished area may be included as finished, provided they have a floor on the same level and meet ceiling height requirements . (A fireplace would not be included in GLA calculations, a bay window could be). A window box, which protrudes from the exterior but does not have a floor is not included as gross living area. 

When finished and unfinished areas are adjacent to one another the finished area should be calculated by measuring to the exterior surface of the inside wall separating the two areas. The measurement of the unfinished area should be from the exterior finished surface of the outside wall to the exterior surface of the inside wall.

Sloping Ceilings and Open Areas; No area is considered “living area” if it does not have a ceiling height of at least seven feet.  There are two exceptions; Areas under a sloped ceiling may be included as living area as long as they have an average ceiling height of seven feet, however no portion of an area that has a ceiling height of less than five feet may be included as finished. (so sloping ceilings with average of 7 feet high and area 5-6 ft high can be included). Exception; Finished areas with sloped ceilings underneath stairs may be counted as finished area, regardless of ceiling height. *See note regarding stairs. 

Areas open to the floor below are not included in the calculated area. So in the case of a two-story foyer, only the actual floor area is calculated.

All area calculations are broken down into the specific levels of the residence, either above or below grade (i.e. first floor, second floor, below grade/basement).  Furthermore, areas must be designated as finished or unfinished.

"Grade" is ground level at the exterior of the residence. For any level of a house to be considered above grade, the entire level must be above ground level. Likewise, if any portion of an area is below ground level, then the entire level is considered below grade. Finished is defined as “An enclosed area in a house that is suitable for year-round use, embodying walls, floors and ceilings that are similar to the rest of the house.”  Also, implied in this definition, is that a finished area will be climate controlled in a manner consistent with the rest of the house.

GLA is understood to mean above-grade, finished area.  It is clearly differentiated from below grade areas and finished below grade areas.
Finished areas not connected to the main part of the house by means of a finished hallway or staircase should not be included as a part of the finished area at the same level.  Therefore a bonus room over an attached garage, a detached guesthouse, an apartment over a garage, etc should be described as a distinct area, not gross living area.

The updated edition of the ANSI standard allows for some decorative concrete floors to be considered finished floors.  Enclosed, climate controlled patios and sun porches may now be included as living area.

Garages, whether attached or detached, are not considered living area because they do not meet the previously stated requirements for finished areas.  The principle also applies to utility/storage areas, decks, open porches and open patios.  

*Calculations for stair area should be attributed to the level from which the stairs descend. This is true regardless of the degree to which the stairs/stairwells are finished. The area attributed to the stairs includes the treads and landings but should never exceed the size of the floor opening. For example, a typical stairwell may be four feet wide where it begins its decent from a second floor.  If the stair flares to six feet wide at the main level and the opening at the top and is no wider than the treads, then only the dimensions consistent with the opening can be used.

Tags: ANSI Standards, gross living area, appraising education, appraiser training, appraisers, cost approach, Employee Relocation Council, ERC, finished, GLA, above grade, gross living area, measuring, standards.

I often get the questions, "Should I wait to buy a house? Should I sell my house now?" History repeats itself, when we are predicting the future we base it on what happened in the past.  From 1999 to 2007 I watched the housing market climb and then crash. When the rates dropped people couldn't refinance fast enough.  I also noticed, as an appraiser in the metropolitan area of Omaha and Council Bluffs, that people were not only refinancing, but they were doing it every 2-3 years as the value of the home went up, pulling out the 3%-5% gain, to pay off short term debt.  During that time there were limited systems and regulations in place for appraisers to report a fair and equitable value and there was a tremondous amount of pressure from the mortgage broker industry "to stretch the value" to "get the deal done".  I was told on occassion by few of my clients if I continued to be conservative, they would find another appraiser.  I held my ground, and I warned lenders the refinancing and inflated values was not good.  Then 2008 it all came crashing in.

People were not able to make their mortgage payment and the foreclosures began.  I went from appraising for the banks and mortgage companies to working as a "Forensic Appraisal Specialist", for Fannie Mae and other investors reviewing appraisals and reporting what the true numbers should have been at the time of the mortgage. I learned a lot.  

When a loan went bad the appraisal became the focus. Investors took a hard look at the appraisal reports and pushed back on the lenders who sold the loan, for anything that they found wrong with the appraisal report. The appraiser did not specifically cause the default, however if there were discrepencies, the appraiser became the target. Repurchasing loan demands were based on "bad appraisals" and "unacceptable appraisal practices" outlined in Fannie Mae's Selling Guide.

Some of the mistakes I found were reporting the market stable or increasing when it was declining at the time. Misreporting the condition of the subject or comparable sales, such as using houses that were obviously superior to the subject property without a condition adjustment. Using sales outside the neighborhood that had a higher price there were sales available in the subdivision. Failing to mention the proximity to railroad tracks, or a busy highway.  

When I was able to find faults with the appraisal, the selling lender either had to defend the appraisal report, or admit the valuation was inflated and repurchase the loan. 

For these reasons many checks and balances were put in place to ensure this did not happen again in the future.  Appraisal Management companies became the go between, and promised to review the appraisals before the lender made a loan decision, ensuring the loan would never be a buy back.  It used to take 1 hour to process and appraisal, and now with the new rules it takes 2-5 hours. Every T crossed and I dotted.  After the management company reviewed the appraisal report there were programs, databases and appraisal review processes created to provide assurance the appraisal .

Given past repurchase demands, these new rules that were put in place to protect the lender and the investors.  We are heading for a decline, due to the impact of Covid-19 and people losing their jobs, however I believe it is unlikely the housing market will decline like it did in 2008.  

Posted in:General and tagged: Omaha Real Estate Market
Posted by Alycia Hamaker on August 2nd, 2020 7:54 AMLeave a Comment

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January 5th, 2020 9:32 AM
The Market and Value Considerations

I do a lot of real estate appraisals for Appraisal Management Companies as well as Real Estate Settlement for private clients.  My value opinion or real estate appraisal must take into consideration all factors that affect value, not just the physical characteristics. The mortgage industry and lenders/bankers must take appropriate steps to ensure that the appraisers they use analyze not only the physical characteristics, but also the “market conditions”.  This includes analyzing listings, contract sales as well as closed or settled sales, and using the most recent and similar sales available as part of the sales comparison approach, with particular attention to sales or financing concessions.
When researching comparable properties for analysis, the first step is to look at the immediate subdivision, the homes within close proximity with similar locational influence.  While researching physical characteristics, such as gross living area, bedroom and bath utility, I also look at the “market conditions”.  
Market Characteristics:
Demand vs Supply Ratio, for a mortgage analysis you will see this calculated on a “Market Conditions Report”
Days on market (DOM) - This is the number of days a property spends listed for sale. If properties are being snapped up quickly by eager buyers, then demand might exceed supply.
Discounting – This is the difference between the original listing price and the eventual sale price. If buyers are eager, sellers don’t need to drop their asking price much.
Online search interest (OSI) – This is the number of online searches for property divided by the number of properties available. A high number means there are more buyers than sellers in the market.
Stock on market (SOM) is the number of properties for sale. The SOM is usually quite large in an oversupplied market. However, this figure can be deceptively low for small markets and deceptively high for large markets. So a better indicator is the percentage of SOM.
Percentage of stock on market -The percentage of stock on market, or the SOM%, is the number of properties for sale relative to the number of properties in the suburb. The vast majority of property markets will have an SOM% of less than 2.5%. 

For private appraisal services, I do the same analysis, however for  mortgage lending purposes, I am required to report on the primary indicators of market condition for properties in the subject neighborhood by noting the trend of property values (“increasing,” “stable,” or “declining”), the supply of properties in the subject neighborhood (“shortage,” “in-balance,” or “over-supply”), and the marketing time for properties (“under three months,” “three to six months,” or “over six months”) as of the effective date of the appraisal. I also must describe the reasons when the trend of property values is declining, supply is an over-supply, or marketing time is over six months. Fortunately we have been enjoying an increasing to stable market in the areas I perform appraisals; Omaha/Council Bluffs Metropolitan, as well as St Petersburg, Madeira Beach, Seminole, Clearwater area in Florida.     

Uniform Standards of Professional Appraisal Practice - USPAP

Did you know the appraisal process begins when you email or call about performing an appraisal?  I am going to ask you a lot of questions, not just your address.  The very first step is to figure out why you need an appraisal, and what are the circumstances.  I am not just being inquisitive.  

"Problem identification" is the first step in any appraisal assignment. Before determining the scope of work for the assignment, (the time which will be involved, the fee I will charge) I must identify the assignment elements as defined by USPAP:

Client and any other intended users
Intended use of appraiser’s opinions and conclusions
Type and definition of value
Effective date of appraiser’s opinions and conclusions
Subject of the assignment and its relevant characteristics
Assignment conditions

From a practical standpoint, I need to identify all of these assignment elements in order to understand the amount of time the assignment may take to complete.

Regardless if the property is in Omaha, Bellevue, Papillion, Council Bluffs, or any other surrounding communuity, we need to identify these specific elements as part of the first step in the process.  Often times clients are surprised I have so many questions, but it is truly necessary to proceed to the next step of the process. 

If you have questions, or would like to discuss the process, feel free to call.  I am easy to talk to.

Patty Smith

Every time we get a request to do a Residential Real Estate Appraisal for a bank or lender we are also required to provide the site value.  This means we must appraise the "land" or the building "site" as well as the house. It doesn't matter if it is Omaha, Council Bluffs, rural Southwest Iowa/Nebraska or waterfront in Florida.  Essentially we are doing two appraisals for the price of one. We appraise the land/site separately.  

What is land vs site? 

 1. The earth's surface, both land and water, and anything that is attached to it whether by the course of nature or human hands; all natural resources in their original state, e.g., mineral deposits, wildlife, timber, fish, water, coal deposits, soil.

 2. In law, the solid surface on the earth, as distinguished from water.

 3. One of the four agents of production in economic theory


Improved land or a lot in a finished state so that it is ready to be used for a specific purpose.

The Dictionary of Real Estate Appraisal, Sixth Edition (Appraisal Institute, Chicago, 2015)

"Valuation of land as if vacant, and of land and improvements to or on the land, is an economic concept. Whether vacant or improved, land is also referred to as real estate. The earth's surface, the space beneath which extends to the centre of the earth, and the space above which extends to the sky. The ownership of land and the rights attached to the ownership are subject to the laws of a particular State.(IVS)"

The Dictionary of Real Estate Appraisal, Fifth Edition in the International Valuation Standards (IVS) Glossary

?Land Characteristics for evaluation and impact on the value: ?Location, Immobility, Durability, Finite Supply. Land is physical, in a raw state. When someone decides to improve it to support building improvements - it becomes a site.  When we are appraising a property for proposed new construction, we look at both the Land value and the site value and the contributing factors. 

A Site in order to support a building, includes grading, landscaping, paving, and utility hookups as well as off-site improvements including streets, curbs, sidewalks, drains, and connecting utility lines. Sites are more valuable than land, land is basically raw, except for minor improvements, fence, or landscaping. 

Considering building?  Need to determine your "As Completed Value"? Call us, we are easy to talk to and are happy to consult with you on your project.  402-334-9224 Omaha, Council Bluffs 712-323-9004, Pinellas County FL 727-773-6829

Patricia Smith
Smith Valuation Services/Midwest Appraisal Associates

Florida golf courses disappear as developers seek new type of $green$

Land along a golf course has long been coveted by golfers and non golfers alike. Even people who don’t play golf like to look at golf courses. Lined with majestic pines and oaks, the edges of the land where eagles often nest has also been sought after for building high end residential real estate. Pastoral views of rolling fairways and well maintained greens used to play the quiet, relaxing game have driven the value of these lots up for decades. Now a new phenomena is threatening the property values along courses. In areas where vacant land is at a premium, developers are purchasing the courses and setting their sights, not on bunkers and water hazards, but new construction.

What will this mean for the values of homes that already exist along a course? Homes that were purchased and priced specifically due to their location along a gorgeous swath of empty land. It’s a tough question, and one that is weighing on the minds of thousands of landowners.

Next to waterfront views, golf course views are often considered the most desirable, and are heavily factored into the property valuations performed by residential real estate appraisers.

Between 1998 and 2006, more than 4,000 new courses opened. More than 400 U.S. courses went defunct in 2016 and 2017, according to the National Golf Foundation. Florida is home to about 1250 of the nation’s remaining 15,000 or so golf courses. It has the most of any state. Let’s take a look specifically at Pinellas County, FL, and explore what this could mean for values along the Bardmoor Golf Course in the City of Seminole. The owner of the 150-acre Bardmoor course agreed earlier this year to sell to Wheelock Communities and Gentry Land, the companies that developed Starkey Ranch, a planned community of new construction homes in Pasco County.

The Bardmoor course has hosted a wide variety of golfers over the years, from High School teams to PGA Tour Champions. Bardmoor was founded in 1971, and homes began popping up around the course shortly after. Unlike many courses that have closed, Bardmoor appears to be thriving. The course and club are owned by Bayou Golf LCC, which paid $12.5 million for them in 2006. The Bardmoor course is currently designated for recreational use. Redevelopment would entail a change in land use and zoning, a long process that would involve multiple county, state and federal agencies.

Representatives of the developers claim that buffers of trees and landscaping would ensure that after they develop new homes where the course once was, homeowners who now have sweeping golf course views wouldn’t be looking into someone’s else’s windows, and to mitigate the impact on property values, the new homes would be of comparable quality as existing ones.

Realtor Bobbie Kahler, who has several listings in Bardmoor spoke to a reporter following a recent community meeting, “We don’t want any publicity on this,” she said. “There are houses under contract, closings are coming up. People won’t want to buy in here if they know the golf course might go away. This is horrific,” according to the Daily Commercial, a local news outlet.

According to Forbes, “Once closed and left untended for as little as a year, it can cost several million dollars to repair and reopen a course — nature reclaims unmaintained land quickly, and home values can drop as much as 50% within weeks of a course closing.”

Concerns not only about the loss of the golf course view, but increased traffic, taxes, and construction noise, are shared by residents not only of single family homes along the course, but also villas and multi family units.

Currently 12 homes are listed for sale along Bardmoor golf course, ranging in price from $539,000 to $875,000. 5 homes are currently pending at prices ranging from $550,000 to $1,699,000. In the last 6 months 7 homes have sold for sale prices ranging from $415,000 to $810,000.

Other recent golf course closures in the area include, The Tides Golf Club. However, properties along that course were limited to a relatively small number, and the real estate in the area, which is near the water, is already at a premium.

The main question on the minds of all property owners along the Bardmoor golf course is how will this affect my property value? The answer is complicated and dependent on several factors that are as of yet unknown. Will the land use change be approved? How will the views be affected? What amenities will be added to the community as a result of redevelopment? Will property taxes increase to pay for new infrastructure? And just what are they going to build on the Bardmoor golf course?   

There is not much information out there in terms of hard data to calculate exactly how much property values will decline due to a golf course closing. It's because each situation is unique. One thing is for sure, this is not an anomaly that will wane in the coming years. Closures will continue to increase and the crisis may even begin to affect values at golf courses which are currently operating without issue. Even the hint of uncertainty of the future of a golf course could greatly affect property values.

For a full valuation of your current or future property Contact:

For a free listing presentation of your current or future property Contact:

To Do:

Research existing vs historic property values around Bardmoor golf course

Research closer and property values around the The Tides Golf Club in Seminole

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Posted by Patricia Smith on April 14th, 2019 9:19 PMLeave a Comment

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February 20th, 2019 8:52 AM
For the last several days, I have logged in at 6:00 am, fully intending on writing a great blog about a lesson I learned on my most recent appraisal assignment.  However this morning, rather then spending two hours creating a blog, and sharing about the appraisal assignment, I am writing about how easy it is to get to distracted from your original intentions.  At 6:00 am, sitting down to write, but first "let me clear this one thing on my desk, I promised to scan and email a copy of an appraisal to someone".  Sounds simple.  I typically start out by scanning the document to my desktop computer, even though there is that feature on my fabulous all in one printer, email, scanner to simply scan and email the document directly.  How long could it possibly take to do that "thing" I have been putting off; adding my email address to the printer/scanner thus eliminating a step and adding one more automated feature which will enhance my productivity.  Two hours later, after much reading, googling, security settings and g suite email smtp protocols I can now email from my scanner!  Look for an appraisal blog later this week.  If you need help adding your email to your scanner I am now an expert, just reach out. 

Posted by Patricia Smith on February 20th, 2019 8:52 AMLeave a Comment

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A Day in the Life of an Appraiser in Rural Pottawattamie County and Douglas County.  The majority of our appraisal valuation services today is in the city/suburbs of Council Bluffs, IA and Omaha, Nebraska, we are often called to appraise small acreages in rural communities like Underwood, Treynor, Carson, Oakland Iowa, and Blair, Bellevue, Papillion rural areas in Sarpy County or Douglas County Nebraska.   
Whether it is a home on 5 acres, or an outbuilding and 10 acres we are challenged to value the land and location for adjustment purposes, in order to arrive at a credible opinion of value.  Some of the land valuation involves Surplus Land and Excess Land which we have already discussed here.  But the other issue which is not uncommon are land easements.  Often times, these easements were created when a small parcel of land was divided from a working working farm to allow a family member to build a house near by.  The easement serves as an access for a farmer to reach a grain bin with a truck load of corn harvested in the fall, or a tractor to cross on to adjoining land to plant crops in the spring. These easements are known as Appurtenant Easements.  An Appurtenant Easement is a right to use adjoining property that transfers with the land. The parcel of land that benefits from the easement is the dominant tenement. The servient tenement is the parcel of land that provides the easement.  The answer to this question is never a simple one.   It comes down to how much less will a buyer pay if there is an existing easement allowing someone to drive across their property.  Often it relies on how much of a "nuisance" the easement is, how close is the road to the home, how often is the road used, does it require a lot of maintenance.  Each easement is treated individually and we can only base the impact on data provided by colleagues,real estate agents, listing services and the owners themselves.  Patricia Smith