Valuing un-buildable land

[Mark K]

The owner seems to have no use for it but what would the township use the land for? Park/walking trails? Greenspace? Flood mitigation or retention/detention ponds?

Determine a likely or at least reasonable HBU and find appropriate comps.

Not sure how the conservation easement comes into play unless the owner intends to keep it. If he donates it to the township, I don't see the need for a CE. Also, if he is going to donate it as-is, its a simple non-cash charitable contribution and you'll have to sign the appropriate tax form for the owner to claim the deduction.

 

[Digger88]

I obviously know nothing about your market but like running this kind of stuff through Grok is this at all helpful?

Comp #	Location / Date	Acreage	Sale Price	$/Acre	Land Characteristics & Similarity	Key Adjustments Needed for Your 14.5 ac Subject
1 (Strongest)	Franklin Twp, Gloucester County (rural South Jersey); closed May 30, 2024	141 ac	$750,000 (fee simple)	$5,319	Forested core area in Maurice River Watershed headwaters; streams/riparian zones, high-quality wildlife habitat, clean-water protection; preserved from any development; sold to South Jersey Land & Water Trust (conservation org, similar to township holding). Irregular shape, contiguous to other preserved land.	Size: subject much smaller → +10–20% (small parcels often command premium per acre). Shape: narrow meandering vs. blocky core → -15–25%. Adjacency to approved commercial (your site) vs. watershed → +5–15% contributory buffer value. Net indicator: $4,000–$5,500/ac.
2 (Excellent wetlands match)	East Vineland, Cumberland County (rural South Jersey/Pinelands); closed ~June 2025	118 ac	$425,000 (estimated total)	$3,602	Vernal pools (protected wetlands), Pine Barrens tree frogs/dragonflies, Manumuskin River watershed; zero development potential; core preservation area bordering wildlife management areas; sold to NJ Conservation Foundation. Meandering watershed features.	Size: smaller subject → +15–25%. Wetlands quality similar (vernal pools = high resource value) → minimal adjustment. Narrow/meandering shape → -10–20%. Commercial adjacency premium → +10%. Net: $3,500–$5,000/ac.
3 (Small-parcel size match)	Washington Twp, Warren County (rural North Jersey); approved/closed Oct 2024	4.84 ac + 0.48 ac (total ~5.32 ac)	≤ $16,500 (combined)	≈ $3,100	Small open-space parcels adjoining county park (Oxford Mountain Natural Resource Area); acquired by township for conservation; constrained environmental/open-space use.	Size/shape: very close → minimal. Likely buffer-like → good proxy. Commercial adjacency → +5–15%. Net: $3,200–$4,000/ac (supports floor).

 

[Red Flint]

There is likely low development rights value for the conservation easement (usually a tax write off for the owner). A conservation easement valuation will establish the 'after' value of the land, which would provide the framework for a separate valuation for donation (second tax advantage to the donator). Simillar sales of conservation easement land can be rare, look for sales of unbuildable land, such as floodway, floodplain depending on elevation, topography, zoning.

 

[Red Flint]

Sometimes landlocked sales are worth evaluating.

 

[Mark K]

A conservation easement valuation will establish the 'after' value of the land, which would provide the framework for a separate valuation for donation (second tax advantage to the donator).

Wouldn't those two values, CE and after combined, equal the fee value with the same result of simply donating the parcel in fee?

 

[Terrel L. Shields]

Mandates that appraisers possess the knowledge and experience to complete an assignment

How do you do your first appraisal for anything if "experience" is required? Only FNMA requires experience and who wants to work for them, really?

 

[Digger88]

• Take steps to become competent: review recent wetland-mitigation sales, consult a local wetland scientist for a one-hour call on delineation/permitting realities, or (best option) have an experienced land or conservation-easement appraiser review/co-sign the report.

IRS requires a qualified appraisal (Treas. Reg. §1.170A-13(c) and §1.170A-17). Your report must be prepared by a “qualified appraiser” who regularly performs appraisals of the type of property and has the education/experience. If you’ve done 5–10 similar land deals, you’re fine. If this is your first, partner up.

 

[Zoe]

• Take steps to become competent: review recent wetland-mitigation sales, consult a local wetland scientist for a one-hour call on delineation/permitting realities, or (best option) have an experienced land or conservation-easement appraiser review/co-sign the report.

IRS requires a qualified appraisal (Treas. Reg. §1.170A-13(c) and §1.170A-17). Your report must be prepared by a “qualified appraiser” who regularly performs appraisals of the type of property and has the education/experience. If you’ve done 5–10 similar land deals, you’re fine. If this is your first, partner up.

That also depends too. Assume the owner owns real property and gets an appraisal. Assume an estate never was established. Assume the owner sells the property later and gets another retrospective appraisal for tax purposes. See?

Capital gains would be owner's concern on getting new appraisal and that is assuming a capital gains tax would apply.

 

[bodenstein]

Thank you all. You have pretty much confirmed my initial gut reaction that we should pass on this.

I obviously know nothing about your market but like running this kind of stuff through Grok is this at all helpful?

Comp #	Location / Date	Acreage	Sale Price	$/Acre	Land Characteristics & Similarity	Key Adjustments Needed for Your 14.5 ac Subject
1 (Strongest)	Franklin Twp, Gloucester County (rural South Jersey); closed May 30, 2024	141 ac	$750,000 (fee simple)	$5,319	Forested core area in Maurice River Watershed headwaters; streams/riparian zones, high-quality wildlife habitat, clean-water protection; preserved from any development; sold to South Jersey Land & Water Trust (conservation org, similar to township holding). Irregular shape, contiguous to other preserved land.	Size: subject much smaller → +10–20% (small parcels often command premium per acre). Shape: narrow meandering vs. blocky core → -15–25%. Adjacency to approved commercial (your site) vs. watershed → +5–15% contributory buffer value. Net indicator: $4,000–$5,500/ac.
2 (Excellent wetlands match)	East Vineland, Cumberland County (rural South Jersey/Pinelands); closed ~June 2025	118 ac	$425,000 (estimated total)	$3,602	Vernal pools (protected wetlands), Pine Barrens tree frogs/dragonflies, Manumuskin River watershed; zero development potential; core preservation area bordering wildlife management areas; sold to NJ Conservation Foundation. Meandering watershed features.	Size: smaller subject → +15–25%. Wetlands quality similar (vernal pools = high resource value) → minimal adjustment. Narrow/meandering shape → -10–20%. Commercial adjacency premium → +10%. Net: $3,500–$5,000/ac.
3 (Small-parcel size match)	Washington Twp, Warren County (rural North Jersey); approved/closed Oct 2024	4.84 ac + 0.48 ac (total ~5.32 ac)	≤ $16,500 (combined)	≈ $3,100	Small open-space parcels adjoining county park (Oxford Mountain Natural Resource Area); acquired by township for conservation; constrained environmental/open-space use.	Size/shape: very close → minimal. Likely buffer-like → good proxy. Commercial adjacency → +5–15%. Net: $3,200–$4,000/ac (supports floor).

Thanks for this! This is the most concrete information I've found. That said, I'm still inclined to pass on the assignment

 

[Dublin ohio]

How do you do your first appraisal for anything if "experience" is required? Only FNMA requires experience and who wants to work for them, really?

USPAP require prior competency or acquire it during the assignment and informing the client about the lack of competency prior to accepting the assignment. I doubt a client would approve for this type of assignment