If you need to know the market value of your land, you’ll need to get an appraisal. A land appraisal, like a home appraisal, is used to provide you with the estimated value of your property. But unlike with a home, where appraisals can be done in a short period of time based on key features like number of bedrooms and bathrooms, a land appraisal is usually a bit more time intensive and subjective. This is especially true when the land is vacant.
Why do you need a land appraisal?
A land appraisal is usually obtained for one of two purposes:
– You want to know the value of your land in order to sell it;
– You want to use your land as collateral for a loan
In the latter case, the value determined by the appraisal is necessary for both yourself and the bank, as it helps establish how much you can borrow against the property. If you’re getting a land appraisal prior to listing your property for sale, the value you receive will guide your pricing and provide you with important information on comparable sales.
What land appraisers are looking for
As mentioned above, a land appraisal isn’t always cut and dry. There are many factors that can affect the perceived market value of your land, and not all of them are clearly defined. For this reason, it’s important to work with an appraiser who has experience with land, and who you trust to do the most comprehensive appraisal possible—even if it means it takes a little bit longer to complete.
There’s no standard list of factors that land appraisers look for, but in general, they’re considering value based on a range of features. These include:
– Size of the property
– Ease of access
– Land uses and improvements
– Amenities and utilities
– Easements and encumbrances
– Weather issues (i.e. if your property is on or near to a floodplain or an area prone to wildfires)
– Comparable sales
– Income potential (if applicable)
The individual issues that your appraiser will take into account may include more than those listed above. When choosing an appraiser, ask for a full list of what factors are taken into consideration so that when you receive your final number, you know exactly what it’s based off of.
How to get a land appraisal
Find a land appraiser the same way you would find a residential property appraiser. You can search online or, better yet, ask a trusted advisor or realtor for a recommendation. Once you’ve found an appraisal company that you’d like to worth with, verify that they have experience in appraising land. It’s important to work with appraisers who know what they’re doing and have gathered expertise from looking at various other properties. Your appraiser should be licensed and certified, and should come with references.
If you’re getting an appraisal with the purpose to sell your land, keep in mind that the fair market value is mostly a jumping off point. The true value of your land is what a buyer is willing to pay for it. That being said, for lending purposes you should try to stick close to the appraised value unless your buyer is ready to put down more money in cash.