How much is your land worth? Not all acres are equal and before you start the process for a full land appraisal you might be wondering how you can get a ballpark figure of what you might expect. Here’s a behind-the-scenes look at valuing acreage to take the mystery out of this process including factors to consider, why it’s important to hire an expert (and how to find one), and the differences between rural and residential land appraisals.
Rural vs. residential
Even if you have a vacant lot that will someday become residential, appraisers will assess rural tracts of land or farmland used for agricultural purposes differently than residential or commercial land. The appraiser will consider factors like access, topography, and configuration, and you’ll want to keep in mind that the size of rural land can add extra time and money to the valuation process.
The variables of valuing land
A land appraisal is more complex than appraising a house. It takes into account the location (and potential for future development) and potential uses. Top realtors in Las Vegas know how important considering future development is to putting a price tag on land. Yes, what you want to do with the land matters.
When thinking about development, appraisers talk about the “highest and best use” of the property, which is “the reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible, and that results in the highest value” — in other words, how will you best use this land to make it profitable?
Appraisers will run through a number of questions to evaluate the plot and then look at a price per acre based on its use, such as residential, agricultural (irrigated), agricultural (non-irrigated), ranching, timber, or recreational. The size and shape of your land, its accessibility, zoning, and environmental factors also come into play. Running sales comps — looking at recently sold parcels of land that are similar to yours, can be a starting point. This is also something you can do on your own to get a rough estimate. But with all of these variables to consider, to get the most accurate appraisal, you want to hire an expert.
Not all appraisers are equal
Hiring a residential appraiser to evaluate land has the potential for numbers that are off the mark and that’s why you need an expert land appraiser. If you aren’t sure where to start, a local real estate agent who sells land can make recommendations. You can also do a search on the American Society of Farm Managers and Rural Appraisers, for contact information for more than 2,100 of the country’s top land appraisal experts.
With some background work, you can take the mystery out of valuing your land. Be sure to do your homework ahead of time to be aware of the land’s potential uses and any development that might come into play. When the time comes, work with an expert who can help you get a clear picture of how your goals can align with the land you are working with.