The appraisal of vacant land is a detailed process that evaluates zoning, the presence of natural resources, amenities, access and availability of utilities to determine property value. While some parcels of land will not support structures, they may still have value based on other allowed uses. When appraising unbuildable land, the highest and best use of the property, which is the allowed use that will result in the highest income return, is determined first. The analysis that follows uses the prices of similar properties that have recently sold as an evaluation tool.
Conduct a site visit to the land to confirm property characteristics, access and the availability of utilities. Research title information and property history to ensure the property has clear title and that no encroachments are present. Title information can be found in the records department of your local government.
Determine the highest and best use of the property. Although the property is not buildable, other uses that add value may be allowed. For example, the land may be used as a storage yard, for mineral or timber production or as agricultural land. Evaluate local zoning regulations to determine what uses are allowed, then identify the use that would offer the highest economic value.
Assess the value of natural resources present on the land if the underlying zoning allows for mineral extraction or timber harvest. Estimate the volume and economic value of minerals, oil, natural gas or timber if natural resource production is determined to be the highest and best use of the land.
Find at least three other properties that have sold in recent months that have similar features and the same intended use as the property being appraised. Use local property records and the tax assessor’s database to find the comparable properties. Records can sometimes be found online, but they may also be accessed in the tax assessor's office of your local government.
Compare each sold property to the land you are appraising and make adjustments for differences in property size or amenities, using the guidelines found in the Uniform Standards of Professional Appraisal Practice ( USPAP) book, which can be ordered online or found at your local library. Use the sale price of the sold property as a base, then add or subtract value based on differences found in the property being appraised. For example, if the sold property is slightly larger than the property being appraised, subtract from the sale price to reach a value for the property being appraised. If the sold property is smaller than the one being appraised, add value to the price. Adjust the property value similarly for other differences, including view, value of natural resources, location and access until a final value is reached. Perform comparative evaluations with each sold property, then average the adjusted values found for the appraised parcel in each exercise. This averaged number is the appraised value of the unbuildable land.
- Make sure you have permission to enter the property when conducting a site visit.
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