Buying or Selling Ohio Land for Sale? Think Land Appraisal.
When there is Ohio land for sale – whether it is raw acreage, commercial property, or residential – a land appraisal is the key component of the process. Any loan for a property is based on the appraisal value. As a buyer, owner, or seller, understanding the true value of the real estate in question is important. This will help you make the most of your real estate decision. But first, it’s important that you understand the process of a land appraisal and know what to expect.
How is Land Appraised?
Buying land can turn into a lucrative investment, just as selling land can bring the seller a high return on their investment. Before you buy or sell land, though, you must have the land surveyed and appraised to determine land value estimation. Surveying land will determine its size, boundaries, and exact property lines; appraising land will determine its current market value. Land appraisal vastly differs from a building appraisal.
Raw land valuation is more difficult to determine than land that already contains a structure. With raw land, it all depends on the plans for that property. Will the land be used for commercial activity? Does the land buyer plan to build a home? Are there plans to turn the raw land into farmland or hunting land? Generally speaking, commercial-use land is typically worth more than land with a house built on it.
So, how is land appraised? When determining the value of land, there are many pertinent factors that a land appraiser must consider. This information can let land buyers know if the land is priced reasonably, and inform them of the pros and cons of the land they’re interested in. Likewise, it can help land sellers come up with an appropriate listing price as well as a list of selling points.
Some of the critical factors that affect land value are as follows:
- Condition of the land / Topography
- Wildlife or ecological concerns
- Property characteristics / Amenities
- Land use restrictions and zoning requirements
- Land easements and encumbrances
- Utility hookup and sewer options on the property
- Soil quality and characteristics
- Requirements to build on the land (e.g., costs of clearing the land)
The most common land valuation methods used in land appraisal are:
- Sales comparison approach
- Cost analysis approach
- Income capitalization approach (income potential)
Also, there have been many advancements in land valuation practices, involving computers and mathematical formulas. Some of these newer land appraisal approaches help establish a connection between sale prices and property characteristics. Two types of land appraisals utilizing these methods are as follows:
- Computer-Assisted Mass Appraisal (CAMA) allows land appraisers to estimate the market value of comparable properties, regardless of whether they have recently been sold.
- Computerized Geographic Information Systems (GIS) enables land appraisers to generate property records based on location and compare it with sales data.
What to Expect from Land Appraisals
Land appraisals are used to determine whether the listing price of the land is accurate, as compared to the actual value of the Ohio land for sale. A land appraiser can assist you in determining the actual value; they will create an appraisal report, which will include many details.
Keep in mind that an appraiser’s report is more detailed than a comparative market analysis.
Typically, a land appraisal report produced by an Ohio property appraiser will include:
- A comparison of the “subject property” with similar properties in the area – at least three.
- An estimate of the duration of time it may take to sell the property.
- A description of the area in which the property is located.
- An explanation of any negative aspects which may impact the market value of the “subject property.”
Understanding Land Appraisal Values
Understanding what a land appraisal entails is only the beginning. To make an educated decision about any land for sale in Ohio, investors and buyers should consider how appraisal values are determined and what they ultimately mean for the selling process.
- When the land appraisal value is lower than expected, a transaction may be delayed or even canceled.
- When refinancing a mortgage (for example, on a home) a low appraisal can prevent this.
- For a seller, a low appraisal means you may need to lower the price of your property in order to sell the land.
- For a buyer of land for sale, keep in mind that the bank will never lend more money for a property than it’s actual worth; this makes the appraisal an important first step if you have specific land in mind. If you plan to buy raw acreage for sale, specifically, other elements can factor into the valuation, as opposed to commercial land.
Pro Tip: You may be interested in these 4 Tips When Buying Commercial Land for Sale in Columbus, Ohio.
Get an Appraisal on Your Ohio Land for Sale
For any commercial real estate transaction, a land appraiser is an objective third-party with no financial stake in the transaction. These commercial real estate valuation professionals are licensed by the state and knowledgeable about the specifics of the real estate market as it pertains to land sales.
When it comes to commercial real estate and land appraisals, the leader in the community is The Robert Weiler Company. Since 1938, our qualified commercial real estate appraisers have been providing objective and unbiased valuation on commercial property and Ohio land for sale. Want to know more about how land is appraised? Ready to schedule a land appraisal on your commercial property? Call one of our land valuation experts today at 614-221-4286.