Land Appraisal 101: The Key Factors that Determine the Value of Your Property

 

When buying, selling, inheriting, or investing in real estate, determining the accurate value of a property is crucial. Professional land and property appraisers use a combination of art and science to estimate what a parcel is truly worth. For any piece of land, there are several key variables that influence its market value.

Location
The old adage “location, location, location” rings true for land appraisal. Desirable locations near business centers, transportation hubs, popular school districts, entertainment, and attractions will command higher prices and rents. Meanwhile more remote, isolated areas typically sell and lease at lower rates, even if the land plots themselves are equal in size. Appraisers may analyze comparable recent sales of nearby parcels to gauge the approximate value boost or reduction based on location.

Access and Frontage
Properties need access for people, goods, and vehicles to have practical value and marketability. Land parcels with extensive, direct road frontage and multiple access points tend to have a higher worth than landlocked properties accessible only by easements through adjacent land. Appraisers thus consider road types like highways or rural lanes as well as property front footage when valuing sites.

Size and Dimensions
Bigger is often considered better when evaluating vacant land, but the configuration and dimensions matter greatly too. Oddly shaped parcels with narrow segments or extensions may limit building plans or have parts unsuitable for construction, thereby decreasing overall usefulness and desirability despite larger total acreage. Professional appraisers take exact measurements of frontage as well as depth in multiple directions to handle irregular polygons.

Topography and Grade
The terrain and slope across a land plot impacts how challenging and expensive it will be to develop it. Relatively flat sites ready for construction command much higher prices than steep hillsides requiring extensive grading. Low-lying flood-prone areas or parcels containing wetlands also trade at substantial discounts. Soil quality further influences cost and feasibility of building too. Appraisers will note grade percentages, elevation variances, soil types, and land contours when determining values.

Zoning and Land Use Regulations
The types of structures permitted on a vacant parcel and intended land use designated by zoning ordinances greatly affects potential value. Sites zoned for commercial buildings warrant higher appraisals than identically sized residential lots. Commercial appraisal services are aware of this fact. Changing a zoning classification typically raises property worth, provided governing bodies approve the variance. The fewer development restrictions in place, the more valuable the site generally becomes.

Utilities and Services
Already having water, sewer, electricity, gas, telecom, drainage infrastructure, and other utilities available on site saves tremendous time, effort and money for property owners looking to construct. Consequently, land parcels with direct access to existing municipal utility services often appraise higher than unimproved sites lacking connections. Public services like garbage pickup plus proximity to police and fire stations also boost desirability.

Surrounding Properties and Views
How neighboring lands are presently used also weighs on single site valuations when selling or subdividing. For example, a vacant lot beside dense apartment buildings likely warrants a lower appraisal than an identical tract flanked by high-end single family houses. Scenic vistas translate to premium prices for view lots, be it mountain ranges, city skylines, waterfronts, or golf courses. Who and what is within sight matters!