Estimation of the cost of the land plot

A modern valuation of the value of a land plot will determine the market price of ownership of a piece of land or other proprietary rights that are relevant to the land being valued. 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 it necessary to evaluate the land?

The valuation of the land is formed when the pledge is made, when buying / selling, the contribution to the authorized capital of the enterprise and other purposes that the legislation provides. An appraisal examination is carried out in relation to industrial, settlement, and agricultural land. Estimation of the cost of a plot of land is necessary for the division of property. If it is necessary to assess the right to lease, then the value of the right to lease a piece of land on the market will be determined as the difference between the market value and the lease capitalized rate on this plot. To estimate the land plot (for a market price), it is necessary to take into account its location, transport accessibility, availability of communications, its purpose, and the possibility to change the latter.

The main reasons for assessing land:

- To implement the court's verdict concerning the rights of inheritance, the resolution of property disputes, for example, during the divorce proceedings, etc.

- When lending against a plot of land. This may be a piece of land purchased for loan money or already owned.

- When carrying out a transaction of leasing or buying / selling.

- To revise the cadastral value. The purpose of this operation is to reduce the taxable base, etc.

Evaluation factors

The difficulty of assessing land is that it is necessary to take into account such factors:

- permitted use;

- the purpose of the site of the serpent;

- volume-spatial characteristics (relief, area) and much more.

A modern estimate of the value of a plot of land differs from the evaluation of an apartment or house that has only one designated purpose. Depending on the terrain, the cost of land will be different. In addition, when estimating the value of land plots, all existing approaches can be applied to obtain the final price: profitable, costly and comparative. The most used approach is the comparative one. Nevertheless, in certain situations (for example, if there is insufficient activity in the real estate market in terms of selling / buying land plots), this approach can not be applied. In this case, the cost is determined by a costly or profitable approach.

The evaluation of the value of the land plot is also dependent on the expected duration, magnitude and possibility of obtaining income as a result of the lease of the site for the period of time when it is used most effectively.

How much are the evaluation works

Assessment of the value of land also has its value. And the latter depends on the purpose of assessing the value of the plot of land, its purpose, scope of work, and also from the appraiser, who conducts this assessment.