land appraisal

Land Appraisal - Land Valuation

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Land Appraisal

What is Land Appraisal?

The appraisal of lands is a process technical through he which a appraiser professional determines he worth of market of a land, already sea urban, rural either of use mixed. This analysis considers factors as the location, characteristics physical, use current and potential of the floor, So as the conditions of the market real estate local and international.

Why is a Land Appraisal important?

A appraisal precise is essential for various situations:

  • Transactions real estate agencies: Establishes a price fair in operations of buys, sale either lease.

  • Financing: Is required by institutions financial as back in applications of credit guaranteed by estate roots.

  • Development of projects: Provides information clue for the planning and assessment of projects of construction either urbanization.

  • Management patrimonial: Facilita the take of decisions in investments and planning financial to the provide information precise about he worth of the assets real estate.

Main Methods of Land Valuation

  • Method comparative (either analysis of market):
    He appraiser collects and analyzes information about sales recent of lands with characteristics similar in the same area. Subsequently, HE they perform settings by differences between the comparable for estimate he worth by metro square either by unit of extent.
  • Method of the cost residual (provision of values):
    HE analyzes a land that already account with constructions and HE calculates he worth of the floor as a proportion of the worth total of the property, considering he worth net of the land by separate.

  • Method of extraction of the worth of the land:
    TO to leave of the worth total of a property with improvements built, HE subtracts he worth My dear of the constructions (with base in his depreciation and costs current) for obtain he worth of the land as component residual.

  • Method of capitalization of rents:
    Esteem he worth of the land in function of the income that can trigger in he future, especially in contexts of rent either development. HE applies a rate of capitalization appropriate to the flow net of income projected.

What distinguishes an urban space from a rural one?

They are those whose location is in inhabited or expansion areas and that are characterized by their high population density, as well as a wide extension in terms of infrastructure, often causing an increase in the cost of land combined with high demand in the amount of households. 

On the other hand, the land use can be commercial, residential or mixed; Spaces intended for industrial use can also be classified within this section, which enrich demographic growth.

Rural areas are characterized by their direct contact with nature, because they are located on the outskirts of the city. In these types of areas, the activities that define their economy are those linked to the countryside, such as agriculture and livestock, for example. which are suitable spaces for the conservation of plantations, forest areas and animal husbandry, these can be:

  • Agricultural:

    • Of irrigation

    • Of temporary

    • Of humidity

  • Livestock farmers:

    • Of pasture

    • Of meadows improved

  • Forestry and agricultural:
    Areas intended to conservation, crop either production mixed.

Important conditions when requesting a Land Appraisal

For ensure a process professional and without setbacks, is advisable consider it following:

  • Verify the ownership legal of the land (according to the regulations local of the country).

  • Confirm that he land this free of debts either liens, it which can affect his worth.

  • Hire to a appraiser certificate either accredited low standards recognized internationally (as IVS either RICS).

  • Identify the services and infrastructure available in he land, already that these influence directly in the estimate of worth (water, electricity, roads, drainage, etc.).

What is required to request a Land Appraisal?

The documents required they can vary by country, but generally HE requests:

  • Copy of the qualification of property either document legal equivalent.

  • Record cadastral either ID of the land in he system of planning local.

  • Plans of the land, Yeah are available.

  • Information of services public (water, light, sewerage, etc.).

  • Documentation technique additional, Yeah he land this intended to a project specific.

What is delivered at the end of the appraisal?

He report of appraisal delivered by a professional can include:

  • Estimate of the worth of the land low he method either methods applied.

  • Record photographic updated.

  • Flat of the land with their measures, location and characteristics physical.

  • Basis technical and legal of the analysis done.

  • Comments about factors that they can impact he worth (zoning, accessibility, restrictions).

This report can be used for purposes legal, commercials, financial either of investment, and is essential that this elaborated according to rules international recognized as the IVS (International Valuation Standards) either he "Grid Book” of RICS.

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