Land Appraisals – 5 Facts No One Talks About

There are some things you need to know about investing in vacant land. The majority of land investments begin with a reputable appraisal. A land appraisal aims to establish the worth of the undeveloped land and pinpoint the best possible use for it.

You can reap many benefits from buying and developing land. However, you must be able to navigate this type of investment.

Continue reading to find out how to appraise land accurately and why this information is so essential for the success of your investment.

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1. What is a Land Appraisal?

Land appraisals are the professional survey of land in order to determine its market price. This is done to determine the best use of the land and guide future development. A land appraisal considers many factors, including the size and location of the land.

Lenders often require land appraisals to finance the purchase or lease of raw land. Lenders need to be sure that the purchase price is comparable to traditional real estate transactions. Even if the lender doesn’t require an appraisal, having one is still a good idea.

2. What Does a Land Appraisal Cost?

An appraisal of land can cost anywhere from $1,000 to $4,000, depending on its size, location, and zoning. Because residential lots are simpler, the cost of an appraisal is lower. The appraisal can take as little as a week. Larger lots may require a longer appraisal time and can be more expensive.

The need for environmental studies can also impact the land appraisal price. An appraiser will take longer to determine the land’s value if there are natural resources on the property. Additional environmental studies and testing may be required to determine the land’s value. This will lead to a higher appraisal price.

3. The Importance of Conducting a Land Appraisal

Think about this: Would you ever purchase a house without an appraisal? You probably wouldn’t. An appraisal is one way to determine if you are paying fair prices for land or property. Below are just a few of the many reasons that a land appraisal can prove to be beneficial.

  • Secure Financing: Before approving your loan application, most lenders require that you complete an appraisal in West Virginia. This protects their bottom lines and ensures the purchase price is correct. To get financing approved, you will need to complete an appraisal.
  • Better Decision Making: Land appraising can often help you decide the best use for it. This will also inform your decision about whether or not the property is worth investing in.
  • Accurate Insurance: Most insurance providers require an appraisal in order to verify the policy’s value. To insure your investment is accurately, you will require a land appraisal.
  • Simple Estate Planning: It can simplify your estate planning. As you create an Estate Plan, it is crucial to determine the value of your investment.
  • Estimate Ownership costs: An appraisal will give you an accurate estimate of the cost of ownership. An appraisal can help you determine the estimated property taxes. This will help you to evaluate the benefits and costs associated with the purchase.

4. How Does Land Appraisal Work?

In some ways, a land appraisal is a process that requires more work than a property appraisal. This is so that the optimal use of the land can be determined, which requires surveying more elements. Investors and owners alike can buy land confidently by getting an accurate appraisal.

Because each plot is unique in its features and geography, there is no standard process for land appraising. Nevertheless, appraisers will be looking for certain common factors. These are just a few of the elements that land appraisers will consider:

The Best and Most Effective Use

During a land appraisal in South-Central PA, the optimal use of the land is likely the most crucial criterion to be considered. This will reveal the best usage for the property in order to realize its full potential. To assess the best use, an appraiser will consider four primary criteria: what is physically viable, financially reasonable, legally permissible, and most productive.

Dimensions and Shape of the Property

The shape and size of a parcel of land can significantly impact its use and value. When determining the best land use, an appraisal will look at its size and shape. If there is not enough space for a yard, an irregularly shaped lot might not suit a single-family residence.

Zoning Restrictions

How the land is zoned will determine its development potential. There are several types of zoning: residential, commercial, industrial, and agricultural. The type of structures allowed to be built will depend on the zoning. 

Accessibility

If the land is to be developed, it must be easily accessible by roads. A land appraisal will assess how accessible the land is by road. This is commonly called frontage. The greater the land’s frontage, the higher the property’s value. The property’s ability to be zoned can also be affected by its frontage.

Utilities

Access to utilities can have a major impact on the land’s overall value. It can significantly increase development costs if there is no water, sewerage, power, or internet. Utility line installation can sometimes add weeks or even months to the project’s duration. Due to these factors, land with existing utility lines usually fetches a higher price.

Wildlife and Environmental Factors

A land appraisal can include many environmental tests. Most often, an appraiser will test the soil for contaminants and nutrients. The land’s overall value can be affected by factors such as asbestos, lead, and radon.

Wildlife, especially protected species, can have an impact on appraisal valuation. Whether the area can be developed depends on if there is wildlife present. The appraised value will typically be low when the site cannot be developed.

Competitive Rates

A land appraisal is similar to real estate comps. It will consider recently sold plots. Appraisers will search for similar areas and types sold in the past month. This can be a good starting point for an appraisal.

Improvements to the Property

The appraised value could be affected by any improvements or amenities that have been made to the property. Investors may find it more attractive if there are hiking trails or access to water. These features can help increase the property’s overall value, provided that they don’t prevent development.

High Land Demand

An appraisal can be impacted by the demand for vacant land. This is often seen in commercial areas that are developing. There may be bidding wars on specific parcels of land. However, raw land may be in low demand in areas that are not yet developed. This could lead to lower overall appraisal values.

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5. How to Get Land Appraised?

It is easy to get your land appraised. Contact a local real estate agent if you are interested in purchasing land. Appalachian Appraisal Services can provide you licensed appraiser in Maryland to help you get started.

You can contact an agent or brokerage if interested in appraising the land you own. You should find someone with experience with the type of land you have, such as an appraiser for agricultural farmland.

Conclusion

An essential step in purchasing any land is a land appraisal. This process can reveal the best use of land and several aspects of the development process. This information can help you make informed decisions about the investment and development possibilities. It will also increase your long-term profits. For more information on land appraisal in Maryland, South-Central Pennsylvania, or West Virginia, contact us today.

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