If you’re thinking about investing in raw land, there are a few things you should know beforehand. The majority of land investments begin with a professional appraisal. The goal of a land appraisal is to figure out how much raw land is worth and what its best future use will be. Buying and developing raw land has several benefits, but only if you know how to handle this kind of investment. But first, you need to know what a land appraisal value is, how to get one, how to appraise real estate, and how much appraisal services cost.
What is a Land Appraisal?
A land appraisal is when professional surveys a piece of land to find out how much it is worth on the market. This procedure is used to determine the greatest possible use for the land and to guide future development. When conducting a land appraisal, several criteria are taken into account, including the location and size of the land.
Typically, land appraisals are necessary to finance the purchase of raw land. Lenders, like a regular real estate transaction, want to ensure that the purchase price is reasonable. Even if your lender does not demand an appraisal, it is nevertheless advised that one be performed.
Land Appraisal Value
Understanding the meaning of a land appraisal value is merely the first step. Investors and buyers should think about how a land appraisal value is made and what these factors mean for the selling process so that they can make an informed decision about any land for sale.
- A land valuation assessment that shows a lower value than expected may trigger a transaction delay or cancellation.
- A low appraisal can prevent you from refinancing a mortgage (for example, on a home).
- For a land seller, a low appraisal may necessitate lowering the price of your property to sell the land.
- As a buyer of land for sale, keep in mind that a bank will never lend more money for a property than it is worth; this makes land valuation a vital first step if you have specific land in mind. In contrast to commercial land, different factors can influence the valuation of raw acreage for sale.
How Much Does Land Appraisal Cost
Land appraisal services cost between $1,000 and $4,000, depending on the zoning, location, and size of the property. Because of their simplicity, residential lots have a lower appraisal cost, and the land appraisal services may only take a week. Commercial land evaluations can be more expensive and time-consuming, especially if the lot is big.
Another thing that can change the cost of land appraisal services is whether or not environmental research is needed. If you buy land with natural resources, an appraiser will take longer to determine the value of the land. If more testing and environmental investigations are required, the appraisal fee will rise.
How to Get Land Appraisal
The procedure for getting land appraised is rather simple. Start by getting in touch with a local real estate agent or company, especially if you want to buy land. They will then direct you to a licensed appraiser who can get you started.
If you want to appraise a piece of land you currently own, you might begin by calling an agent or brokerage. You can also look for qualified appraisers in your region online. Find someone who knows about the kind of land you own, like an agricultural consultant who does property appraisals.
How to Do a Land Appraisal Value
A land appraisal is a far more extensive process than a property appraisal. This is because there are more things that need to be looked at to find the best way to use the land. A good land appraisal gives owners and investors the confidence they need to buy land.
Because each plot is unique in terms of features and topography, there is no single process for valuing land. Having said that, appraisers will look for some common factors. Here are just a few of the criteria that go into determining a land appraisal value.
#1. Best and highest use
The most important criterion evaluated during a land appraisal is arguably the optimum use of the land. This will inform you of what you should do with the property in order to optimize its total potential. An appraiser will look at four main things to find the best use: what is physically possible, what is financially possible, what is legal, and what is the most productive use.
#2. Accessibility
If the land is to be developed in any form, it must be accessible via road. A land appraisal will consider how much of the land is accessible by road; this is referred to as “frontage.” In most circumstances, the more frontage a piece of land has, the more valuable it is. The property’s frontage can also influence what it can and cannot be zoned for.
#3. Competitive land rates
A land appraisal, like a real estate comp, will evaluate previously sold parcels of land. Appraisers will hunt for similar-sized and-type locations that have sold in the recent month or two. This can serve as a starting point for the appraisal.
#4. Size and shape of the property
The size and shape of a piece of land influence what it can be used for and, as a result, its overall worth. When assessing the optimum use for a piece of land, an appraisal will look at its size and shape first. For example, if there is no space for a yard, an irregularly shaped lot may not be suitable for a single-family home.
#5. Utilities
The availability of utilities will have a substantial impact on the land’s overall value. If there are no water, sewer, power, or internet lines, development expenses can skyrocket. Installing utility lines might sometimes take weeks, if not months, lengthening the process. For these reasons, land with existing utility access frequently sells for a higher price.
#6. Improvements made to the property
If there are any existing facilities or improvements to the land, the appraised value may be affected. For example, if the property already has hiking trails or access to water, it may be more appealing to investors. As long as these traits do not hinder the land from being developed, they can raise its overall worth.
#7. Zoning regulations
The land’s current zoning status will directly impact how it can be developed. Residential, commercial, industrial, and agricultural zoning are only a few examples. The type of zoning determines what kinds of constructions can be developed. While most homes can be rezoned, buyers must consider this additional cost.
#8. Environmental and wildlife factors
During a land appraisal, numerous environmental tests might be performed. Appraisers will typically analyze the soil for nutrients and pollutants. Lead, asbestos, and radon can all reduce the total value of the land.
The presence of animals, particularly protected species, can also have an impact on land appraisal. If wildlife is present, it affects whether the land may be developed. When land cannot be developed, the appraisal value is frequently low.
#9. Demand for land
During an appraisal, demand for raw land might significantly enhance its worth. This is especially typical in developing commercial districts, when bidding wars for individual parcels of land may occur. On the other hand, undeveloped areas may face low demand for raw land. This will result in lower total appraisal values.
Land Appraisal Services
It is critical to locate expert land appraisal services with experience analyzing the type of land you wish to purchase. The American Society of Farm Managers and Rural Appraisers is a fantastic land to start when looking for farmland appraisal services. When estimating the cost of land appraisal services, these skilled appraisers consider all of the considerations indicated above. They can swiftly and accurately appraise the worth of the land and will provide you with a fair and accurate explanation of how they arrived at that result.
A local real estate agent can also recommend professional land appraisal services and assist you in locating unoccupied properties that are a good fit for you. Contact top real estate brokers in your region to begin building your home or company.
Where Can I Find Land Appraisal Services Near Me?
Are you looking to acquire a land appraisal? It’s not uncommon to wonder how to get land assessed if you’ve never done it before. You’ll need to find a nearby land appraiser. It is best to hire an experienced land appraiser.
One of the best places to look for land appraisal services and cost is Google. You can conduct an online search for land appraisal services near me and you will almost certainly get some useful results. Land appraisers frequently offer their services online. Additional results may be obtained by searching for land appraisals near me.
The American Society of Farm Managers and Rural Appraisers is a great place to start looking for land appraisal services that can provide an accurate valuation for farmland. When calculating the cost of unoccupied land, these professional appraisers consider all of the considerations indicated above.
Land appraisers should be able to assess the worth of the land swiftly and accurately, as well as provide you with a fair and clear explanation of how they arrived at their judgments. A local real estate agent that specializes in the land may be able to direct you to a land appraiser.
The Advantages of Conducting a Land Appraisal
Would you buy a house without getting an appraisal? The answer is most likely no. An appraisal is one of the most effective methods for determining whether you are paying a reasonable price for a property or land. Here are a few of the reasons why a correct land appraisal might be useful:
- Secure Financing: Before approving your loan application, most lenders will request an appraisal. This is done to safeguard their bottom line and guarantee the purchasing price is correct. To get your financing approved, you must complete the appraisal.
- Improved Decision Making: A land appraisal will frequently propose the best use for the land, which can help you decide whether the property is a good investment.
- Accurate Insurance: Insurance companies will normally request an appraisal to establish the policy’s value. To appropriately insure your investment, you will require a land appraisal.
- Simplify Estate Planning: Even if you currently own land, having it appraised for your own records can be useful. Defining the value can aid in the creation of an estate plan and determining the future of your investment.
- Estimate Ownership Expenditures: An appraisal can help you estimate your ownership costs. An appraisal, for example, will identify the projected property taxes. This might assist you in weighing the expenses and benefits of the purchase.
What appraisal method is used for land?
All types of upgraded property can be appraised using the cost technique. It is the most dependable method for appraising one-of-a-kind properties. The cost method figures out a property’s value by adding the estimated value of the land to the depreciated cost of the building and any upgrades.
What determines the value of land?
When there is more demand for land than there is available land, or if a certain piece of land has a higher value than other lands nearby (for example, it has oil on it), land prices go up.
What are the 3 types of appraisal reports?
However, appraisal practice has historically recognized three basic techniques for appraisal reports: the comparison approach, the income approach, and the cost approach.
How much is a land appraisal in Texas?
The typical cost of land appraisal services in Texas is between $300 and $550.
How long is a land appraisal good for?
Most appraisals are normally good for 90 days, according to the Federal National Mortgage Association, however, this time can vary depending on factors such as the type of loan and the current real estate market.
How much does an appraisal cost?
According to HomeAdvisor, a digital marketplace for home services, a home appraisal normally costs between $300 and $400, with a national average of $339. However, in some metropolitan areas, house appraisal quotations start at $600, and prices might approach $1,000 for larger or more complex properties.
Conclusion
When purchasing any form of raw land, a land appraisal is an important step. This process can show not only the best way to use the land but also different parts of the process of building. This can help guide your decisions as you examine investment and development opportunities, and it can also help your bottom line in the long run.
Frequently Asked Questions
How much is a home appraisal in Montana?
$325 – $430
A house appraisal costs $375 to $450 on average, with the average homeowner spending roughly $400 for a single-family, 1,300 to 1,700 sq. ft. home with a few modifications and a small property.
What should you not say to an appraiser?
Simply advise the appraiser about the facts of the home and neighborhood, how you priced the house, and any other pertinent information you believe the assessor should be aware of. Remember, don’t talk about value. You’ll be alright if you don’t put pressure on the appraiser to “hit the value.”
How are appraisals calculated?
An appraiser often begins determining market value for a single-family home by comparing 2-3 comparable properties (called “comps”). They’ll also visually check the house for any flaws that could reduce its worth. Home appraisals are required by lenders to ensure that the house is worth what it is being sold for.
Related Articles:
- LAND SPECULATION: Definition and Tips For Speculating
- MOVING TO ANOTHER STATE CHECKLIST: The Ultimate Guide
- IS LIFE INSURANCE WORTH IT? What You Should Know About Life Insurance
- Mortgage Fell Through On Closing Day: What To Do?
- HOW OFTEN DO CONTINGENT OFFERS FALL THROUGH?
- CONDITIONAL USE PERMIT: Guide For Real Estate Investors
- INSPECTION CONTINGENCY: What Happens During a Contingency
