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FSA Appraisers

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Anonymous

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Anyone on the Farm Services Adm. list? I am invited to a training class in OK.

What do they require - reporting wise? I understand they want form appraisals only.

What software? The farm forms I am familar with are pretty fair for farmland, but nearly irrelevant for building intensive farms like confined hog or poultry farms.

Terrel
 

Joker

Elite Member
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May 28, 2002
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Certified General Appraiser
State
Ohio
It has been a little over a year since I did an FSA report, so the requirements may have changed. I have done well over a hundred in the past 10 years and the requirements do change. To my knowledge, they prefer forms and the only software company I know of with all of them is alamode. My reports always included a minimum of the folowing: FmHA 1922-1, FmHA 1922-11, FmHA 1922-10, FmHA 1922-9 (for each of the comparables used), a soils map, FSA tillable fields map, and a tillable soils analysis. All three approaches were expected to be developed. It may not seem appropriate to do the Income Capitalization Approach on a farm, and end up with a Cap Rate well under 10%, but it is the market and is market derived. Take the training class, there are not many appraisers who really know how to do a complete appraisal for agricultural properties :wink:
 

Terrel L. Shields

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May 2, 2002
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Certified General Appraiser
State
Arkansas
I know how to do an appraisal of farms, but I was afraid you were going to say all those forms..Clickforms does have most if not all you mention, too. I have always done narratives and have calculating tables in Word Perfect that do the math for me as I go.

The forms are oriented to ground appraisal. Many of our farms the land is less than 10% the value, with the buildings being the vast majority of value. Poultry farms.

The manner in which they develop the income approach is less than desirable, but usable I suppose. Cap rates on poultry farms generally range from 12 - 20%. Old houses with higher caps and larger sites with lower caps.

It is the Sales Adjustment grid that is completely in left field for application to building intensive agriculture. Having improvements of $45,000 per acre vs a similar farm on larger site with $5500 is really silly unit of comparison. Ditto for pasture rents which in this part of the world are per acre, never based on animal units, and not particularly easy to convert.
 

Joker

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May 28, 2002
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Certified General Appraiser
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Ohio
FmHA 1922-1 is probably not the best report option for poultry operations. The forms I mentioned are geared toward real farms. Poultry operations and similar ventures are more commercial than agricultural. The forms I mentioned are definately for appraising true farms. If you have building values per acre of $45,000 and comparing to $5,000 per acre, are the properties really similar and are they really farms or are they the infamous 10 acre farms? I have successfully used the per acre building value adjustment on actual farms, but we are talking when the land comprises at least 50% of the value. I have even seen $3000 per acre building values on a farm and been able to use that sale with one with $200 per acre building value. Still we are talking about farms and not commercial ag related businesses.
As for the pasture rent issue, I always have used the market acceptable method of income generation, which is $ per acre. It is the same as applying $ per acre cash rent to the tillable soils as opposed to using yield per acre and bushel price. The market acceptable method is cash rent. This has been accepted by FSA reviewers.
Supposedly FSA should accept any USPAP compliant report. The forms make it easier for the reviewer (federal employee) to find the info if they choose not to read the report (like that ever happens). I suggest contacting your local FSA Ag Credit and ask them who their appraisal reviewer is. Then contact him or her and find out the reporting requirements. Any questions, send me a PM
Have you had any experience with the new agricultural easement program? :?: [/quote]
 

Ed Lauby

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Dec 31, 2002
:D
I am an FSA Appraiser. I use the Uniform Agriculture Appraisal Report (UAAR) by AgWare, Inc. You can find this soft ware at www.uaar.net.

This is a form filled software but also can be put in narrartive format with easy added pages of any format that can be drop in. It especially is good in functional and external deprecation. The data base for sales is excellent and will transfer all of the sales data into the report for all three approaches and automatically do the calculations. You can use it on per acre or per unit like a 2,000 hog finisher, ect or a multiplier. I could go on and on.

I have the FSA software using the FSA 1922-1 and related forms but as far as I am concern it does not meet USPAP and is hard to produce a decent report without lots of addenda. I refuse to use it.

FSA requirement is that your report meets USPAP. Any format is acceptable as long as it is a decent report. Most of the appraisers in my area use AgWare UAAR-2000, some use a narrarative format, and I only have two that are still trying to use the old 1922-1 forms. A lot depends on who reviews your report and the expertise they may have or the complexity of the property in what they may require.

email me if you want more [email protected]
 

Terrel L. Shields

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Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Poultry operations and similar ventures are more commercial than agricultural. The forms I mentioned are definitely for appraising true farms.
Curious what is not "true" about a poultry farm, dairy, or other confined operation. The gross amount of farm products (in the form of feed) plus the sold product (milk, chicken, hog, etc.) surpasses almost any land based farm (plow/plant) of equal dollar value. The difference is striking to "commercial" or investment property. Investment property has to turn a profit - investors are not interested in buying for any other reason. Ranching and confined operations often turn profits so small no investor in their right mind would buy one. You are buying a job, not a business. Not to mention deed stamps invariably price the whole property in OK and AR. I know not one single rancher that does not supplement his income with cattle trading, hauling, or custom baling, etc. Your "rents" are your labor. Calculating Ranch rents based on pasture rents, BLM payments, etc. is another joke. 90% of the ranches are now selling to corporations, hunting clubs, and the Ted Turners of this world who have no incentive to profit from ranching. A real Highest and Best Use quandry. How can you call the H & B Use investment, environment, etc. (i.e.- not ranching) then proceed to value it based on "ranch" parameters?

1 and 2 percent cap rates are worthless. one-hundredth of a percent moves the value by a percent.

Uniform Agriculture Appraisal Report (UAAR) by AgWare, Inc.
I have looked at this and it is substantially better. The FmHA forms are now 10 page and better, but again oriented towards to cropland and pasturelands. The UAAR is, from appearances, not my cup of tea either, cannot help but think it would be slower, and less flexible than a narrative.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
As a P. S. to above. The FmHA Mineral Form is a complete joke. As an old geologist/ mineral appraiser, that form and the myriad of different ways people misuse it (including FmHA) I am confident not one single solitary mineral appraisal with that form complies with USPAP. Tax rules of thumbs, improper DCF estimates, appraiser generated income projections (as opposed to professional engineering projections) and, of course, 99.99999999% of appraisers are not even aware of A & D watch.....anyone want to guess what A or D means? If you don't know you have no business appraising mineral rights.
 
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