Farm Appraisal V. BPO

[Terrel L. Shields]

different program than the ones that deal with agricultural use,

"land" would be unaffordable taxed at market, my land, based on a sale of adjacent acres would be over $5,000/yr. I grossed 10k, netted some $3,500 on farm. I paid $1,100. Best rents here are $40/ acre. My state has few other incentives. Any conservation acres would be ravaged.

 

[Meandering]

"land" would be unaffordable taxed at market, my land, based on a sale of adjacent acres would be over $5,000/yr. I grossed 10k, netted some $3,500 on farm. I paid $1,100. Best rents here are $40/ acre. My state has few other incentives. Any conservation acres would be ravaged.

Nope,
Land would be subdivided if taxed at market, here. It's these programs that preserve farmland, forests, "endangered species" areas, resorts, ski areas, wetlands, watersheds, old farming families, and the wealthier who can afford the inital purchase if they did not inherit it.

.

 

[jay trotta]

True, but...
The appraiser recognized it as reclaimed. The problem I see is the broker recognized the issue and pfa an adjustment based on his experience. The appraiser did see the issue but found no market support for an adjustment. So he went to the low range of sales, but didn't "adjust".

This is where fear of not having a sale to support the adjustment may have colored his thinking. In hindsight I think I would have searched further away for a comp that had reclaimed land, or interviewed local ag appraisers and brokers for their opinion.

The Broker would not appear to offer a (PFA) adjustment, as he is not required to support his thought process; it would appear his Experience & Judgement provided a response.
The appraiser, is therefore "handcuffed" by not being allowed to use his Experience & Judgement; Would a distance search truly be support for the local market ??

Just a thought, I don't deal with this in my area's of work.

 

[Terrel L. Shields]

Would a distance search truly be support for the local market ??

Well...local is as local does This particular county is one of several in the area with two courthouses and was divided by a river at one point. There is a bridge now, but still two courthouses. On the south side of the river, there are a lot of "orphan spoils" that were cleaned up in the 1970-80s. There may well be some sales there, in fact, it is likely that either recent or back in time there are sales. And two nearby counties also have that same old coal mine issue. And all are basically small town, rural and the market conditions are fairly uniform. On a larger ranch I certainly would not hesitate to cross a county line or river. So the subject north of the river does not have nearly as much mined over land to draw inference from, but I would at least have looked south of the river...and MLS coverage here is very weak. Half the Brokers are not on an MLS. They are kinda stuck between three boards. Our board may have 3 or 4 listings in that whole county over the past year or two.

 

[jay trotta]

Well...local is as local does This particular county is one of several in the area with two courthouses and was divided by a river at one point. There is a bridge now, but still two courthouses. On the south side of the river, there are a lot of "orphan spoils" that were cleaned up in the 1970-80s. There may well be some sales there, in fact, it is likely that either recent or back in time there are sales. And two nearby counties also have that same old coal mine issue. And all are basically small town, rural and the market conditions are fairly uniform. On a larger ranch I certainly would not hesitate to cross a county line or river. So the subject north of the river does not have nearly as much mined over land to draw inference from, but I would at least have looked south of the river...and MLS coverage here is very weak. Half the Brokers are not on an MLS. They are kinda stuck between three boards. Our board may have 3 or 4 listings in that whole county over the past year or two.

I would then agree with your thoughts on expanding research for additional data, it would appear to be worth the effort. Thanks for the input.