Farm Real Estate Appraisal Basics
From constantly shifting land values to economic indicators, purchasing farm real estate can be a complex process. Understanding ever-changing regulations, financing and understanding value feels overwhelming to many.
But you don’t have to try and figure it all out on your own. This is one area of your business where it pays to work with an expert who understands the complexities of farm real estate and all that goes with it. Here are a few things to keep in mind when you’re considering working with an appraiser for making a decision on real estate.
Ag experience and quality assurance
To know you’re getting the expertise you need, find an appraiser with extensive experience in agriculture -- Compeer Financial has an appraisal team of 60 experienced and dedicated appraisers and appraisal representatives -- familiar with rural properties ranging from small, part-time farms to large, complex facilities. The appraisals completed by our staff comply with Uniform Standards of Professional Appraisal Practice (USPAP), so they’re qualified to guide you in making sound financial decisions for:
- Real estate transactions - buying or selling
- Financing and mortgage lending
- Financial planning - including estate and trusts
- Establishing a basis for taxation purposes
- Aiding in comparing investments and return on investments
To keep up with the rapidly changing land value environment, Compeer developed a method to track sales activity and a system to report these changes. Each appraiser is individually responsible for maintaining a current sales database, which tracks all the most recent activity in their respective territory. This gives our team full autonomy to understand both the micro and macro-economic trends the agricultural industry is experiencing at any given point in time. With appraisers stationed across much of the Midwest and even some along the west coast, our team is ready to serve your appraisal needs.
There are basic steps most farm real estate appraisers take when working with you on a purchase. We’ve got some of the steps and requirements outlined below:
- Getting Started: Visit Compeer’s Appraisal Team’s website for resources to help identify which professional will work with you to help solve the appraisal problem. It features an interactive web page that allows users to filter and find the most appropriate expert. Once the appraiser has been identified, contact them via email or call to discuss the assignment.
- What you’ll need: Providing information early in the process helps the appraiser expedite a proposal for the assignment. Any and / or all of the following are useful for the appraiser to understand the property to be appraised:
- The parcel identification number (PIN),
- Legal description,
- Cost: An appraisal assignment varies in complexity depending on the property type being appraised and the scope. It depends on the complexity and level of work required. Bare land properties (for the most part) are less expensive to appraise than properties with improvements due to the required time and due diligence necessary to generate a reliable report. For example, appraisal reports for properties with significant livestock or grain storage improvements are generally more expensive.
Where appropriate, our team also offers restricted-use appraisals which provide a succinct and straight-forward method of reporting. These products are extremely competitive in pricing and can be formatted to suit your needs.
- Timeline: Time frames for traditional appraisal reports typically range from 30 – 60 days, however completion dates vary depending on the complexity of the assignment. Similar to pricing, bare land assignments often require less time than those with significant improvements.
- The result: The appraisal report will be delivered electronically in a secure PDF format. The report will be written to suit the specific needs of the client and intended users which is dictated by the scope of work. Depending on the agreement, the appraiser may also provide a hard copy of the report and mail this to the client’s location. The appraiser will communicate their results in a straight-forward manner to help the client use the information for their needs.
Partnering with some of the largest data providers in the agricultural space, Compeer’s team members have unparalleled abilities to provide accurate, timely, and reliable insights. Find the right professional to help with your appraisal needs.
Opt-in to receive our Appraisal Department monthly insights.