Appraising Your Farm or Land
Finding the True Value
So you need a farmland appraisal. Now what?
There are several reasons you may need an appraisal – estate planning/settling, gifting, tax basis, land divisions, and selling are just a few. Many people think “it’s just dirt” so it should be easy, but that’s not usually the case. There are many factors that go into the value of farmland, and missing just one can change a value by hundreds of dollars per acre. Here are five tips to help insure you get the information you need from an appraiser and his or her report.
1. Get an appraiser that specializes in farmland.
You wouldn’t have a brain surgeon preform open heart surgery on you – don’t hire a residential appraiser to appraise your farmland. There are state certified general appraisers that specialize in farmland. Most farmland appraisers will travel a large geographic area to help you meet your needs. At First Illinois Ag Group, we have four appraisers that specialize in farmland that cover the entire state of Illinois. If we can’t cover your property, we will be glad to refer you to another qualified professional that can.
2. Provide the requested information
A good appraiser may need to ask you for several pieces of information to properly appraise your farmland. FSA data, lease terms, CRP contracts, building details, deeds, and real estate tax information are just some of the data needed to provide a credible value. While some of the information on your farm is available publicly, the more information you can provide as the owner will insure nothing is missed.
3. Plan ahead
Because each farm is unique there are no good programs or databases, like with housing, to easily provide a value based on a large amount of data points. Each project is different. A complex farmland appraisal may take over a month to complete. For complex projects, you should expect 2 or 3 months to receive the final report.
4. Need a certain value?
Sorry, we can’t help you with that. Appraisers a bound by standards and ethics to provide an unbiased value based on the market data available. An appraiser can lose his or her license by providing false or misleading reports. If you are looking for a well-supported and thought out report that is easy to read, we can help. At First Illinois Ag Group, we pride ourselves on producing detailed reports that owners can use as reference for their property well into the future.
Plan to pay a bit more than a typical home appraisal due to the uniqueness of each farm and the limited availability of market data, compared to housing. Because each farm is different, more appraisers are unable to publish a fee schedule. We can quickly provide a quote for your farmland appraisal needs once we discuss your specific property. Please call or e-mail today.