The parameters of a real estate appraisal process are relatively straightforward. Certain conditions are discussed, until all relevant parties can come to an agreed upon estimation. While most real estate appraisals are done for buildings or properties, you can also do appraisals for land.
With land appraisals, the experts take a close examination of the land itself, before reaching a qualitative and quantitative evaluation based on numerous criteria. Commercial appraisers will utilize varying strategies in order to accurately determine a land appraisal. In general, these land appraisals are mostly concerned with what can be the best possible use for potential property.
A myriad of steps must be taken to appraise a piece of vacant land. Each stage is central to the overall appraisal procedure, providing valuable insights if a property is to be built down the line. Do you have a piece of land that needs to be appraised? Let’s learn about the seven tips on how to appraise land properly:
Tip #1: Research about the land
Research is critical on how to appraise land properly. You can never be too prepared or too informed before making significant decisions. The same sentiment can be applied to appraising vacant land.
Professional appraisers will peek into the land’s location first. Since market value is central to an overall appraisal, building property at a specific setting is key. Appraisers will generally consider geographical information while conducting research, such as system maps and zoning maps. This helps to kickstart the process in the most informed manner possible.
Tip #2: Appraise the land’s accessibility
Most experts will push the idea of building a property in an area that will maximize its market value. While this is possible, a good land appraisal can’t occur if the property can’t be physically reached. Is the property actually accessible? How easily accessible is the property, and is it publicly or privately-owned?
The answers to these questions will have an inevitable effect on the appraisal to be made. Some lenders, in fact, won’t even approve a loan for construction, if accessibility routes are considered private!
Tip #3: Appraise the exterior amenities
Although not studied as significantly as other factors, professional appraisers will consider it nonetheless. When determining the appraisal of a building, the permanent and physical aspects of the property are reviewed. The same goes for appraising vacant land, as the surrounding features can help increase its value.
For instance, the land in question might have a waterfront nearby. This can help tremendously when determining an appraisal, as it can be used to boost its price. Once a property is built, the surrounding features only add to its worth, as well as its visual appeal.
Tip #4: Review the blueprint
Blueprints are created for the sole purpose of configuring how a property is to be built. Even though this blueprint is key for the construction of the property, it is also crucial for the actual land appraisal. This blueprint essentially gives you an idea of how a property is laid out, which can impact its resulting land value. Certain configurations could make or break the value outright.
Not only does the arrangement have to be friendly on the land, but it has to be accessible for further developments. If problems arise out of the configuration of the property, it could heavily impact its market value down the line. Professional land appraisers take all of this into account when required.
Tip #5: Evaluate the land use
If there are legal restrictions preventing a property from being built, the land appraisal will be affected. Land use restrictions can directly dictate what the land in question can and cannot be utilized for. In addition, zoning requirements are also taken into consideration by a professional appraiser.
Some areas may have laws where a property can only be built for every ten acres of land. Trying to circumvent this zoning request will only hamper a property’s true value in the future. Although the land may prove fruitful for construction, land use laws must be obeyed for an effective appraisal to occur.
Tip #6: Evaluate real estate trends
Sometimes, nearby land may be used in conjunction with a specific real estate trend. When an appraisal is being made on a portion of land, it is important to look at nearby properties first. These trends will be a good indicator for what may impact a potential property, if built.
Tip #7: Analyze the topography
The land itself may be inherently more valuable than its counterparts. As a result, land appraisers will take a look at the status of its topography, in order to determine its worth. If one portion of land isn’t ideal for one property, it could be used for other developments. For example, swampy land could be used for hunting grounds, instead of residential expansions!
