Real estate appraisal experts have to follow strict guidelines when appraising a piece of land or building. At the same time, most homeowners will be buying land without understanding the actual property value. There are few people who understand land appraisals and the way they are used in determining the value of the property. There could also be another piece of land or property that is across town, selling at half price and therefore bringing comp prices down.
There are of course several different ways to determine the value of a property. However, it depends on the land valuation without including the actual value of the present structures existing on the land.
Common land appraisal valuations methods
- Land value estimation
The empty land can be difficult to judge compared to the one having structures on it. The reason behind the argument is because the land here will be looking like a blank canvas. It will be determined by what the individual will do with the piece of land. So, that is the reason why land planned for commercial activity becomes expensive than one that is at home.
It is the idea that real estate experts use in determining the value of the land. In some cases, the commercial zones will become higher at a premium compared to farm or residential land.
- Comparison based land valuation
In this method, you will be comparing various properties sold in a few years back. That is why you can hear the person selling the land, giving the seller the market value based on the recent sales. There is always a price that the market wants to pay for a specific piece of land and therefore, through comparison, you can get an estimated price of the land.
- Land survey
The valuation of all pieces of lands will come with the need for land survey. It is something the professionals do and can give you the exact value of land that you have. It includes the correct borders and also parameters included in the land and be able to know the part belonging to you. During the survey of your land, you will also know about topography, street frontage, and buildable land.
Factors affecting land value
You will find that not all pieces of land that are equal. So, there are essential factors that are behind everything and will need considerations.
First, it will depend on the current state of that land. If the land has permanent structures, it will not have the same value to the next piece without any structures. The structures will increase the value of land or property. Besides, if you are selling a house, the state of the house also determines the cost. If you have done remodeling, the house will be expensive.
The other thing that leads to different value of land is the investment that will fall on that property. If it’s for residential purpose, it will not be similar to one for commercial use. For commercial it will be expensive.
Moreover, if the land is for farming purpose, it will be determined by the quality of the soil. The land with the best farming soil will be higher than one without.