3 Reasons Land Appraisals in Louisville Aren’t as Simple as You Might Think

Most people understandably assume that vacant land must be easier to appraise than a property with a building on it.

After all, it’s just land, isn’t it?

The truth is, appraising land is often far more challenging than most other property types. There are three main reasons for this…

Why Land Appraisals Are Complicated

The first reason is related to the ‘highest and best use’ analysis. This is a part of every appraisal, no matter what the property type.

Stated simply, this is a process to determine what use of the property would yield the highest value.

For example, can it be used as retail, office, industrial, multi-family, etc.? How big of a building can be built?—all based on zoning, building codes and numerous other complex considerations.

The thing is, when a property already has a building on it, usually the current use is the highest and best use. So the appraiser doesn’t need to spend much time on it.

But when appraising vacant land, a thorough highest and best use analysis must be performed.

This is a complex and time-consuming process, upon which the credibility and reliability of the appraisal depends.

The Problem With Vacant Land Sales

The second reason appraising land is often more challenging than other property types, is the scarcity of comparable sales, or comps.

In most areas, there are very few vacant lands sales, even fewer recent sales, and fewer still, sales of similarly-sized and similarly-zoned parcels of vacant land.

As such, the appraiser must spend substantially more time researching and analyzing comparable sale data.

Extensive analysis is required to make accurate, market-derived adjustments to those sales to account for the inevitable differences in important characteristics such as location, size, shape, topography, frontage, available utilities, time/market conditions, zoning, etc.

Many Appraisers Avoid Vacant Land Appraising

And the third reason is the result of the previous two—many appraisers are reluctant to take on vacant land appraisal clients. They’d just rather take on easier appraisal assignments.

As such, if you’ve ever looked to hire an appraiser to appraise a piece of land, you’ve probably noticed that it can be surprisingly difficult to find someone who wants to take the job. And if they do, their fees can be outrageous.

This is why you want to find an appraiser who has extensive land appraisal experience. Such a person is most likely to get the job done correctly, and won’t charge you an arm and a leg to do it.

Vacant land owners in Louisville rely on us because

• We’ve done thousands of land appraisals
• Each of our appraisers has 15+ years’ experience
• We are KY State Certified General Real Estate Appraisers

Give us a call today! We’d love to discuss your appraisal needs.