Farm - Land Appraisal Summation or

[Alamo Cowboy]

In NW Illinois building improvements add little value to farmland that is sold. That's why it is rare to see farmland w/improvements selling, usually the house and outbuildings are sold off separately. I've seen a decent house and outbuildings sell at zero contributory value at auction when combined with a larger acreage. The only farm buildings that have value are grain bins, large machine sheds, and confinement buildings in good shape.

Sir,

Keep an open mind, youngster. In Texas it is common to see farmland-ranchland w/improvements selling. IMHO, many purchase these properties as a "way of life". I am one of those individuals. I lost out bidding for an equestrian ranch with an all cash offer about 2 weeks ago. The 2 sfrs and all the improvements offered were important to me. I am now back to square one.

 

[Mark K]

In NW Illinois building improvements add little value to farmland that is sold. That's why it is rare to see farmland w/improvements selling, usually the house and outbuildings are sold off separately. I've seen a decent house and outbuildings sell at zero contributory value at auction when combined with a larger acreage. The only farm buildings that have value are grain bins, large machine sheds, and confinement buildings in good shape.

Same here.

Farms rarely sell or auction as one total parcel including the improvements. Basically, the house and barn lot, barn, etc., 2-5 acres +/-, will be split and sold and the balance of the land will sell. Two property types, two HBU, two buyers. If improvements sell with the land, they usually add almost no contributory value since the buyer will be ag user who doesn't want or care about the improvements.

 

[Alamo Cowboy]

Same here.

Farms rarely sell or auction as one total parcel including the improvements. Basically, the house and barn lot, barn, etc., 2-5 acres +/-, will be split and sold and the balance of the land will sell. Two property types, two HBU, two buyers. If improvements sell with the land, they usually add almost no contributory value since the buyer will be ag user who doesn't want or care about the improvements.

I disagree. Ranches/Farms (acreage properties) sell in multiple configurations (land only, land +SFR, land + all improvements, etc.). This is set originally by the realtor selling the property for the owner. After the property sells the new buyer does what he/she wants with the property in Texas. In my state owners can do what they want with the land if they are located in the unincorporated areas of the state.

 

[Alamo Cowboy]

In Texas deed restrictions are a major factor of valuation. For example, the deed may say chickens, swine are not allowed or only a certain amount of livestock/acre is allowed. Many potential buyers will pass on making an offer on a property due to the deed restrictions.

 

[Mark K]

I disagree. Ranches/Farms (acreage properties) sell in multiple configurations (land only, land +SFR, land + all improvements, etc.). This is set originally by the realtor selling the property for the owner.

Usually I start with ...'in this area...'. I'm sure that its different in various locations.

"In this area" my other reply is accurate.

 

[Alamo Cowboy]

Usually I start with ...'in this area...'. I'm sure that its different in various locations.

"In this area" my other reply is accurate.

Common ground. That's good.

In my state a Certified Residential Appraiser may have little credence when doing acreage properties that may have commercial applications.

 

[Terrel L. Shields]

Here if the improvements are in good shape and/or newer, they contribute substantially usually with no functional obsolescence. If they have too many buildings then it can be an issue. One comp I used recently was a 4 year old house 2,000 SF, on 140 acres. Talked to the broker. I knew the buyer as a CPA. There were two deeds. This was at the request of the buyer who split the values $275k and $700k- $5000 per acre for the land, and the house and shop and a hay barn at $275K. That was pretty much the DCN of the improvements (which was what the CPA was doing to accelerate the depreciation undoubtedly.

Only the smallest and oldest buildings are invisible in our market. It is rare to see improved property splitting off the dwelling and a few acres. It is more common further west and north. I see a lot of auction notices in SE Kansas where they divide the properties. Ditto W. Oklahoma. Not so much E. OK and the Ozarks that I work.

 

[Alamo Cowboy]

Terrel,

Your are the man for farmland type properties. I agree with most of what you post.

Most of this website appraisers don't understand what you say; yet, you explain it well. I wish many could walk in your shoes and see the valuation issues as you do.

Keep up the good work.

From an old man talking.