Appraisal Articles 2019 Free Appraisal Articles for Appraisers and the Public
Water rights in Nevada “have the standing of both real and personal property” since a water right or fractional water right interest can be conveyed after it has been specifically excluded from a source property via a conveyance deed. That means that a water right must be specifically excluded via a deed of conveyance from a real property or it will run by default with the land it is associated with.
Thus, it is possible to buy or sell a water right and change the water’s point of diversion, it’s manner of use and / or its place of use by filing the appropriate application with the Nevada State Engineer and having it approved. All water rights require validation by the State of Nevada, the right is not guaranteed by a deed, a title policy or a certificate. If you make a mistake with your water rights conveyance you may end up with no water rights at all.
Drilling a new well in Pahrump generally requires a 2-acre foot (AF) water right at least that is what I have read. You will have to buy 2 AF of water for a property that has no water or water rights to drill a well and that is not a cheap proposition. Then you have to have the well drilled by a qualified well driller, again a costly choice. A septic system is an additional out-of-pocket expense. When you get “all in” with a site and you make it ready to build on, and I am assuming that the property is proximate to or adjoining electrical power service, you can easily spend $ 30,000 or more.
Appraisers try to compare “apples to apples” when considering sales and concluding a market values. Those relatively “cheap” vacant lots that you discover in the market without water rights do not compare well with the sales of some lots that do have water rights, wells or are served by public water systems. If the property that you found to purchase has a septic system in place another adjustment is required.
Real property appraisers have to identify the improvements that are made to a parcel of land to determine if the improvements are “compatible” to a subject property. You may have sales information from the Assessor on 100 properties (land / lots) but if you do not know whether or not the sales had water rights, wells, access to a water or a septic system you can’t make valid comparisons.
Real property appraisals are all about supply and demand and there is a limited supply of water in the Pahrump area. COVID-19 likely will not change the amount of available water, but it may increase the demand for rural property / home sites given people’s increased desire to flee metro areas.
Water rights will continue to play an important part in the valuation of vacant land and developed properties in Pahrump, Nevada in the foreseeable future.
The author is not an attorney and none of the information in this article should be relied upon, the author suggests that you contact a water rights expert / attorney before you make decisions regarding your real / personal property rights.
For more appraisal information contact Glenn J. Rigdon MA, MRICS, IFAS, ASA who is a Las Vegas / Henderson Nevada based broker and appraiser who can be contacted via email or via his business website known as Appraiser Las Vegas (http://www.appraiserlasvegas.com), or http://www.horizonvillageappraisal.com, or you can also click on “Contact Us” on the home page of this website or visit my public profile at LinkedIn at http://www.linkedin.com/pub/glenn-rigdon-ma-mrics-asa/1a/30b/879/
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