Cost of Land Appraisal

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
MWONE
Posts: 8
Joined: Wed Oct 31, 2018 8:33 pm

Cost of Land Appraisal

Post by MWONE » Wed May 15, 2019 7:41 pm

Hello all,

My wife and I recently inherited 127 acres of land in North Carolina. We would like to get it appraised so we know what cost basis we are working with and have put out requests to several companies for an estimate. The first company came back with an estimate of $3750, which seemed like a lot to me, but this is something I've never dealt with. I would appreciate any advice from those that have been down this path and what you might have paid to get your land appraised.

Mike Scott
Posts: 1261
Joined: Fri Jul 19, 2013 2:45 pm

Re: Cost of Land Appraisal

Post by Mike Scott » Wed May 15, 2019 7:50 pm

Get some more estimates and then you will have a better idea of the local market. That's a lot more than I would have to pay for a similar appraisal in our county. Did you perhaps get an estimate for a survey instead of an appraisal?

User avatar
Wiggums
Posts: 820
Joined: Thu Jan 31, 2019 8:02 am

Re: Cost of Land Appraisal

Post by Wiggums » Wed May 15, 2019 7:53 pm

I’m sorry and I don’t know the answer either, however, the appraisal fee that you mentioned looks more like a fee that would be charge for a commercial property.

Silk McCue
Posts: 2223
Joined: Thu Feb 25, 2016 7:11 pm

Re: Cost of Land Appraisal

Post by Silk McCue » Wed May 15, 2019 8:15 pm

If this is raw land where other raw land is for sale/selling then $3750 is not reasonable.

I would call the property appraisers office and see if someone there could give you some guidance. Talking nicely to the right person can yield good results.

You can also talk to a couple of long time realtors in the area that have experience with parcels in the area and ask them for guidance. They should want to help you get an accurate estimate as you may come back to them should you decide to sell.

Cheers

tim1999
Posts: 3581
Joined: Tue Dec 16, 2008 7:16 am

Re: Cost of Land Appraisal

Post by tim1999 » Wed May 15, 2019 8:20 pm

That appraisal price is high if this is rural land surrounded by miles of other rural land. The price is low or reasonable if this tract is in a booming suburban area with complicated zoning rules and builders salivating for available land.

You want an appraiser who primarily works in that area, not someone from 2 hours away who only does a very occasional appraisal where the land is, and has little knowledge of the local market.

Topic Author
MWONE
Posts: 8
Joined: Wed Oct 31, 2018 8:33 pm

Re: Cost of Land Appraisal

Post by MWONE » Wed May 15, 2019 8:35 pm

Did you perhaps get an estimate for a survey instead of an appraisal?

Thanks for the responses. No, this is not for a survey, just an appraisal.
Last edited by MWONE on Wed May 15, 2019 8:42 pm, edited 2 times in total.

User avatar
LadyGeek
Site Admin
Posts: 53555
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: Cost of Land Appraisal

Post by LadyGeek » Wed May 15, 2019 8:35 pm

This thread is now in the Personal Finance (Not Investing) forum (real estate).
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

Topic Author
MWONE
Posts: 8
Joined: Wed Oct 31, 2018 8:33 pm

Re: Cost of Land Appraisal

Post by MWONE » Wed May 15, 2019 8:40 pm

That appraisal price is high if this is rural land surrounded by miles of other rural land. The price is low or reasonable if this tract is in a booming suburban area with complicated zoning rules and builders salivating for available land.

You want an appraiser who primarily works in that area, not someone from 2 hours away who only does a very occasional appraisal where the land is, and has little knowledge of the local market.


Thanks, it is about 40 minutes outside of Charlotte. Was considered to be in the "sticks" not long ago, but Charlotte is growing and so are the surrounding areas. Good advice, thank you.

koala
Posts: 8
Joined: Thu Jul 19, 2018 9:20 pm

Re: Cost of Land Appraisal

Post by koala » Wed May 15, 2019 8:55 pm

You might also contact the NC State Agricultural Economics Extension office. I was able to calculate the cost basis for some inherited land from the annual farmland valuation reports published by U of MO Ag Extension. All of the necessary data was available through their website.

I also found useful information on the AcreValue website regarding recent land sales in the area, but I don't know how much coverage they have in NC.

123
Posts: 4596
Joined: Fri Oct 12, 2012 3:55 pm

Re: Cost of Land Appraisal

Post by 123 » Thu May 16, 2019 12:19 am

The appraisal cost sounds high if the land in the area is generally flat without significant features. If the land is forested, has creeks or rivers (or is adjacent to water)or has significant lakes/ponds or has significant hills or valleys the appraisal cost might be reasonable. It could also be reasonable if the property is remote and/or difficult to get to. There are lots of other issues that could cause an appraisal cost to be high including If the property has potential mineral issues or toxic waste issues. Structures on the land like houses, barns, storage buildings, etc could also increase appraisal costs.
The closest helping hand is at the end of your own arm.

Starfish
Posts: 1082
Joined: Wed Aug 15, 2018 6:33 pm

Re: Cost of Land Appraisal

Post by Starfish » Thu May 16, 2019 12:39 am

MWONE wrote:
Wed May 15, 2019 7:41 pm
Hello all,

My wife and I recently inherited 127 acres of land in North Carolina. We would like to get it appraised so we know what cost basis we are working with and have put out requests to several companies for an estimate. The first company came back with an estimate of $3750, which seemed like a lot to me, but this is something I've never dealt with. I would appreciate any advice from those that have been down this path and what you might have paid to get your land appraised.
I paid 3000$ for a building. Land takes a lot more work I assume.

Rowdie
Posts: 16
Joined: Sat Sep 17, 2016 10:48 am
Location: Missouri Ozarks

Re: Cost of Land Appraisal

Post by Rowdie » Thu May 16, 2019 1:23 am

I just paid $1250 for an appraisal of land I inherited. I used a local appraisal company that was familiar with and lived in this area.

Received a 1 inch thick, printed, detailed appraisal.

It would have been twice the price using an appraisal company from the city an hour away.

not4me
Posts: 556
Joined: Thu May 25, 2017 3:08 pm

Re: Cost of Land Appraisal

Post by not4me » Thu May 16, 2019 9:55 am

Sounds high to me also, but lots of unknowns that could affect. As others mentioned, wait until you hear from the others you sent it to.

1st & most obvious question: if you are only wanting a cost basis, have you checked with executor of estate? Many cases they have to do one & you’d likely be well served to match that. You said “recently” inherited – the appraiser should be able to give you something back to date of death & is particularly straight forward if just a few weeks/months back. If several years ago, that is harder for them.

Be sure it is clear that you are only trying to establish cost basis & not possible future development. They can tell based on current use what it would sell for than what it might potentially become in 3-5 years if other uses were considered.

Others gave good info on things that can affect the complexity & need for a knowledgeable person. If the general area has minimal turnover, it is hard for them to have anything close to comparable recent sales (which drives up your costs). The tax assessors office will have some info as well, but it isn’t really an appraisal. Still, if you plan to hold “forever”, that might be close enough.

megabad
Posts: 1634
Joined: Fri Jun 01, 2018 4:00 pm

Re: Cost of Land Appraisal

Post by megabad » Thu May 16, 2019 5:02 pm

MWONE wrote:
Wed May 15, 2019 7:41 pm
Hello all,

My wife and I recently inherited 127 acres of land in North Carolina. We would like to get it appraised so we know what cost basis we are working with and have put out requests to several companies for an estimate. The first company came back with an estimate of $3750, which seemed like a lot to me, but this is something I've never dealt with. I would appreciate any advice from those that have been down this path and what you might have paid to get your land appraised.
Do you believe that the county's assessment is very far off from FMV? Otherwise why not use their valuation?

retire2022
Posts: 656
Joined: Tue Oct 02, 2018 6:10 pm
Location: NYC

Re: Cost of Land Appraisal

Post by retire2022 » Thu May 16, 2019 5:08 pm

Op

My survey cost me 11k in 2016 for 89 acre northeast property in Catskills.

I did a cash transaction so the appraisal was not required.

When I applied for Home Equity Line of Credit for my coop apartment, the bank sent out an appraisal, an Agricultural credit union if one exists in your area, could also appraise the property.

Here is one I know if see if they have a branch near you: https://www.carolinafarmcredit.com/home.aspx

Topic Author
MWONE
Posts: 8
Joined: Wed Oct 31, 2018 8:33 pm

Re: Cost of Land Appraisal

Post by MWONE » Thu May 16, 2019 7:10 pm

1st & most obvious question: if you are only wanting a cost basis, have you checked with executor of estate? Many cases they have to do one & you’d likely be well served to match that. You said “recently” inherited – the appraiser should be able to give you something back to date of death & is particularly straight forward if just a few weeks/months back. If several years ago, that is harder for them.


The executor of the estate is my mother-in-law. We have been helping her settle the estate and at no point have I seen that she has to put a value on the property. My father-in-law passed in late February after a long illness and left this land to his daughter (my wife) and son. We will most likely hold on to this property for at least 5-10 years, but will end up selling it eventually. The reason we want to get an appraised value on it is because the county tax assessment is much lower than what we believe it can be sold for, so if the appraisal is higher than the county assessment our future capital gains will be lower.

Topic Author
MWONE
Posts: 8
Joined: Wed Oct 31, 2018 8:33 pm

Re: Cost of Land Appraisal

Post by MWONE » Thu May 16, 2019 7:12 pm

Do you believe that the county's assessment is very far off from FMV? Otherwise why not use their valuation?

Yes, I do. The county assessment is 450K, I believe it can be sold for much more than that. Our assumption is the appraisal will come in much higher, therefore lowering our capital gains when it is sold, probably not for another 5-10 years though.

123
Posts: 4596
Joined: Fri Oct 12, 2012 3:55 pm

Re: Cost of Land Appraisal

Post by 123 » Thu May 16, 2019 7:33 pm

Congratulations on your efforts to secure a timely evaluation of the property so soon after the death. So many people don't do this and time passes by and all of a sudden it's 5, 10, or 20 years later and people are left with difficulty determining things with any accuracy and there may not be a lot of confidence in an "historical" evaluation that is delayed by 20 years.
The closest helping hand is at the end of your own arm.

not4me
Posts: 556
Joined: Thu May 25, 2017 3:08 pm

Re: Cost of Land Appraisal

Post by not4me » Fri May 17, 2019 9:05 am

MWONE wrote:
Thu May 16, 2019 7:10 pm
1st & most obvious question: if you are only wanting a cost basis, have you checked with executor of estate? Many cases they have to do one & you’d likely be well served to match that. You said “recently” inherited – the appraiser should be able to give you something back to date of death & is particularly straight forward if just a few weeks/months back. If several years ago, that is harder for them.


The executor of the estate is my mother-in-law. We have been helping her settle the estate and at no point have I seen that she has to put a value on the property. My father-in-law passed in late February after a long illness and left this land to his daughter (my wife) and son. We will most likely hold on to this property for at least 5-10 years, but will end up selling it eventually. The reason we want to get an appraised value on it is because the county tax assessment is much lower than what we believe it can be sold for, so if the appraisal is higher than the county assessment our future capital gains will be lower.
This makes a lot of sense to me & I would be sure to explain to the appraiser I selected. I'm not familiar with terminology &/or process used in N Carolina, but I imagine it has similarities to others that I know a bit about. Some will have both a 'present use' valuation as well as a 'market' value; this can be especially true for timberland, farms, etc. There may be a patch of land based down for years, zoned for agriculture, that pays lower taxes than if it suddenly were clear cut & developed. I think some states show that delineation, but perhaps NC doesn't. Communication with the appraiser is key to ensure you'll walk away with info you need (even if numbers aren't what you expected).

Also, some states have programs that allow for lower property taxes as long as land is farmed, etc. If/when "developed", there may be a clawback required for a period of time for the county to recover some of that. Might want to check & see if that applies here as inheritance MIGHT give a temporary out.

The appraiser may also be able to project growth rates to give a sense for where the land might be in 5-10 years based on certain current assumptions (for your planning purposes).

You seem to be right on top of this -- good luck in finding the appraiser!

Reappraiser104
Posts: 50
Joined: Tue Dec 21, 2010 8:58 am

Re: Cost of Land Appraisal

Post by Reappraiser104 » Fri May 17, 2019 10:02 am

Pricing for commercial appraisals is much different that residential appraisals. Here is your best resource for finding a qualified appraiser:

https://www.appraisalinstitute.org/

MAI is top designation.

Topic Author
MWONE
Posts: 8
Joined: Wed Oct 31, 2018 8:33 pm

Re: Cost of Land Appraisal

Post by MWONE » Mon May 20, 2019 7:53 pm

Reappraiser104 wrote:
Fri May 17, 2019 10:02 am
Pricing for commercial appraisals is much different that residential appraisals. Here is your best resource for finding a qualified appraiser:

https://www.appraisalinstitute.org/

MAI is top designation.
Thank you for this suggestion. I ended up finding an appraiser through this organization who has the MAI designation. He also ended up giving me the lowest quote but seems just as qualified as the rest, who were significantly more expensive. I ended up getting 4 quotes: $3,750, $2,500, $1,100 and $500.

Appreciate the help.

:sharebeer

Post Reply