Are you planning to make a lump sum investment in land? Whether you are looking for vacant land or want to acquire a parcel piece from ancestral land to settle family disputes, you should know how the property is evaluated.
Mostly, the realtors take the services of a professional appraiser to determine the correct value of the raw land and put it to its right potential use. Read on to understand how the land appraisal cost is determined by an appraiser to give a realistic valuation.
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How Much Does A Land Appraisal Cost?
Before we delve into the question of how much a land appraisal costs, let us begin by understanding what this term exactly means. As per definition, a land appraisal is a process which includes a professional survey of the concerned plot of land to determine its market value.
Through this appraisal process, it becomes easier for the realtor or land providers to identify the best potential use of the plot and guide its further development process.
According to available data, a land appraisal cost can range anywhere between 1000$ to 4000$ depending on its location, zoning and size.
While residential lots can take less time and are said to have a lower appraisal cost, commercial plots can take a long time and can be costly if the lot is huge.
Furthermore, the land appraisal cost can be affected by several factors –
- Shape and size of the property
- Accessibility to the property
- Wildlife and Environmental Factors
- Zoning restrictions
- Available Utilities
- Demand for Land
- Property Condition
- Improvements made to the Land for a good sale
- Land Appraisal Cost in the area
Cost of Land Appraisal
A land appraisal can be a complex process and require more effort than appraising the cost of a built property. It involves developing an opinion of value for the said plot to be sold to a probable customer.
Usually, the real estate valuation method used by real estate providers for determining the cost of a land appraisal is the cost approach method. Apart from this, the income approach and comparable approach are also used to evaluate the cost of the land appraisal.
- Cost approach method
This estimates the value a land purchaser must pay for the piece of land that is equivalent to the amount required to build a building on the said plot. This method sees less depreciation and can give the seller an accurate market value for the land if it is new as compared to the other two methods
Property value = Cost of land + total construction cost
- Income approach
In this appraisal method, the appraisal cost of the land is calculated based on the income it generates.
Property value = Net Operating Income of Rent Collected / Capitalization Rate
- Comparable approach
In this method, the value of the land asset is determined by comparing its price with a similar recently sold asset. This is valid only for a single previous year.
The two advanced land valuation methods that make use of technology and computer formulas are –
- Computer-Assisted Mass Appraisal (CAMA): It permits the appraisers to give an estimated market value of the land being evaluated with comparable properties irrespective of when it was sold
- Computerised Geographic Information System (GID): It permits the appraisers to generate the value of property records based on location and by comparing it with sales data
The land appraisal method helps to calculate if the land listing price given by the real estate provider for the plot is accurate. It assists the buyer to compare its value to the actual value of the land for sale in the said county in the nation.
A land appraiser in Ohio can assist to determine the actual value of the plot by preparing a land appraisal report which consists of many details. This type of report can be made by the real estate provider for the appraisal of vacant land, farm land, vacant land with a building structure or others according to its location.
This detailed report by a professional appraiser consists of many things –
- A comparison of questioned property with at least three other similar properties in the area
- A correct estimation of the time it would require to get sold
- Description of the location in which the property is situated
- A brief about the property’s negative aspects that are affecting its market value
For instance, you can check the appraisal report at:
How to Get Land Appraised?
The procedure for appraising land is relatively simple and can be undertaken by a land provider on an annual basis to keep a correct valuation of all the properties he has to offer for sale. Buying or selling a piece of land can be looked at as a lucrative investment offer that can be your additional income source.
Before you give the land for appraisal, make sure to perform its survey to determine its correct size, exact property lines and fixed boundaries.
The easiest way to get land appraised is by connecting with a real estate agent, land provider agency or a broker in the concerned area. They can then refer you to a certified land appraiser within your area from whom you can get trustworthy services.
Another way to find a certified professional appraiser is to search for them online. It is possible to get qualified appraisers in your area by doing appropriate research if you are specific about the type of land, experience and cost.
How Long Does A Land Appraisal Take?
According to the available information, the time required for a land appraisal depends on the area it is located and the type of land that is being appraised.
The process can be completed within 1 to 2 weeks or it may require even a month i.e. 4 weeks depending on the situation of the real estate market.
The exact time required for a land appraisal depends on numerous factors such as –
- The complexity of the property
- Availability and schedule of the appraiser
- The time when the mortgage lender placed an order for an appraisal
- The size of the land being appraised
- Whether the appraisal is done the first time?
- Are all conditions of the appraiser’s checklist satisfied?
Land appraisals are an important part of the land-buying process. It can help the purchaser understand whether the place is correctly examined and if the estimated value by the property dealer is correct.
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