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Different Types of Land Appraisals
Land appraisals are a valuable tool that can be used to determine the value of a piece of land. There are many different factors that go into determining the value of land and it’s best to have an expert do a full appraisal so you can know exactly what you’re working with.
Market Valuation: A good real estate agent will have access to data on similar properties that have recently been sold in the area. The agent will use that information to help determine how much your property is worth. This will vary from property to property but it can be a good starting point for a vacant lot or an empty parcel of land that you are looking to sell.
Sales Comparison Approach: This is the most common type of appraisal and is based on comparing a property to other similar parcels that have recently sold in the area. This method is a quick and easy way to get an idea of the value of your property and can be a great resource when trying to sell it.
Cost Analysis Approach: This is a more accurate method of estimating the value of land. This is done by determining the cost of replacing any improvements on the land, then minus depreciation, and then adding it to the value of the land itself. This method is a great option when buying land that has been improved, especially if it’s new construction.
Income Cap Approach: This is a less accurate method of assessing the value of unimproved land. This is a great option when you are looking to buy a very large parcel of land or a unique land type that sells infrequently. This can also be useful when you are planning on using your land for a specific purpose such as a commercial site or recreation camp.
Shape & Topography: This is a very important factor in the valuation process as it can make or break a property. A lot that is oddly shaped, typically with fewer usable acres and less road frontage, can be valued lower than a standard square parcel. It can also be a challenge to develop such a lot and will require more money to install utilities.
Accessibility: This is another very important factor when it comes to valuing a piece of land. If a parcel of land is hard to reach, it’s unlikely that someone will want to buy it. This can impact the value of the land and make it difficult for a lender to lend on it.
Non-Conforming Use: The appraiser will take into consideration if the property is being used for a non-conforming use. This could be anything from a home that isn’t in the proper zoning or if there are any encumbrances that will prohibit the land from being used for its true potential.
The appraiser will need to understand how the property fits into the neighborhood, how close it is to other homes in the area and if there are any special rules or restrictions that could impact its usage. The appraiser will also need to determine if there are any other factors that will affect its value such as easements or encumbrances that can make it harder for the property to be developed.
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