A modern assessment of the value of the land will determine the market price of the ownership of the land or other property rights that are related to the land being evaluated. Now we will consider this issue in more detail, because financial transactions related to land are considered one of the most complex and have many nuances and pitfalls.
When is land valuation necessary?
An assessment of the value of land is formed during the execution of the pledge, during the purchase / sale, contribution to the authorized capital of the enterprise and other purposes stipulated by law. An appraisal examination is being carried out in relation to industrial lands, settlements, as well as agricultural land plots. Assessment of the value of the land is needed in the division of property. If an assessment of the right to lease is needed, then in this case the value of the right to lease a plot of land in the market will be determined as the difference in market value and rental capitalized rate for this plot. To assess the land (for the market price) you need to take into account its location, transport accessibility, availability of communications, its purpose, as well as the ability to change the latter.
The main reasons for land valuation:
- For the execution of a court sentence regarding inheritance rights, the resolution of property disputes, for example, during divorce proceedings, etc.
- When lending on the security of a plot of land. This may be a plot of land purchased for credit money or already owned.
- When conducting a lease or purchase / sale transaction.
- To review the cadastral value. The purpose of this operation is to reduce the tax base, etc.
Assessment factors
The complexity of land valuation lies in the fact that here you need to consider such factors:
- permitted use;
- purpose of the site of the snake;
- spatial and spatial characteristics (relief, area) and much more.
Modern assessment of the value of the land is different from the assessment of an apartment or house, which have only one purpose. Depending on the terrain, the cost of land will be different. In addition, assessing the value of land, you can apply all existing approaches to obtain the final price: profitable, costly and comparative. The most used approach is the comparative one. But nevertheless, in certain situations (for example, if there is not enough activity on the real estate market regarding the sale / purchase of land), it is impossible to apply this approach. In this case, the cost is determined by a costly or profitable approach.
Assessment of the value of the land is also dependent on the expected duration, size and possibility of generating income from the lease of the land for the period of time when it is used most effectively.
How much do valuation work
Assessment of the value of land also has its value. And the latter depends on the purpose of assessing the value of the land, its purpose, the amount of work, as well as on the evaluator who conducts this assessment.