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into a hypothetical residential subdivision in order to determine
what an informed buyer would pay for the parcel of land. It is
thus reasonable to consider what a hypothetical buyer would have
done under these circumstances. In the present case, the
Commonwealth entered into an "Option to Buy" agreement with
petitioner for the Property on May 27, 1986, approximately 5
months before the closing date. Therefore, we will assume that a
hypothetical buyer would have begun the approval process on this
date, leaving an approval period of, at most, 7 months following
the transfer date.
The evidence further demonstrates that the Property would be
developed and sold in phases over a period of years. A
hypothetical buyer would not have to build all the roads and
obtain all the permits for the entire subdivision before selling
the first lot. Rather, the buyer could develop and sell the lots
in stages, obtaining approval for portions of the development at
appropriate times and then selling the approved lots to builders,
thereby eliminating any delay for the approval process. We do
not deem it necessary, therefore, to factor any additional time
for the approval of the necessary permits into our determination.
The other element of the selling period involves the length
of time it takes for the developed lots to be absorbed by the
existing market. Mr. Handverger estimated that the absorption
rate for this Property would be anywhere from 3-5 years. Messrs.
Segel and Dallamora estimated that 2 years would be sufficient to
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