Do I Need an Appraisal to Sell My Land?

 

 

Landowners preparing to sell their land frequently ask us if an appraisal is needed before we begin marketing the property.

The short answer is … NO. Much like an appraiser, Land Brokers utilize comparable land sales to value properties according to the market’s expectations. Only in certain circumstances where a property is extremely unique or in a rapidly transitioning market do we recommend an appraisal. Even in such circumstances, appraisals still may not capture these unique value propositions.

It is very important for a good Land Broker to be rooted in data. You may find some real estate brokers that tell a seller what they want to hear, whereas a good Land Broker provides a sound recommendation based on thorough analysis and inspection with supporting data. Earning a landowner’s trust begins with providing credible recommendations and practical options for them to make personalized decisions best suited to their needs.

One key advantage a land broker has over an appraiser is the ability to incorporate market trends and preferences into their evaluations. Appraisals are based on past sales, whereas Land Brokers can incorporate intangible forward-looking factors such as a rising sellers’ market as well as active and pending listings. It can be argued that Land Brokers provide better recommendations because they interact directly with buyers and sellers every day allowing them to keep a pulse on market perceptions and fluctuations.

Establishing a pricing strategy begins with a thorough understanding of all the components contributing to a property’s value, including both quantitative and qualitative attributes including timber volume and value, improvements, soil attributes, location, infrastructure, condition, water features, diversity, topography, wildlife, etc. Each property is unique, which is why it is critical to conduct a thorough evaluation.

After a comprehensive evaluation of the subject property, it’s time to find similar properties that have recently sold, i.e. comparable sales. This can often be a challenging task since LAND and its associated characteristics vary so greatly. An inexperienced or unqualified sales agent may mistakenly develop a valuation based on the average per acre sales price of several recent sales.  This is incorrect and could result in an extremely inaccurate representation of the value.

For example, one comparable property could have mature planted timber, upland soils, excellent operability, and a high site index while another could have marginal natural regeneration, moderately productivity, poorly drained soil, and no established roads. These two comps have completely different features that would need significant adjustments to evaluate the same subject property. Without careful inspection and knowledge of such characteristics, an unqualified sales agent could incorrectly price the property.

As Foresters, Accredited Land Consultants and Land Brokers, the professionals at Green Hill Land & Timber thoroughly understand the many different qualities and features of LAND. We are highly qualified to provide professional advice, thorough evaluations, and great results.