Why do I need an appraisal?

Written By: Julie Harris

As fall approaches most farmers to find themselves gearing up for harvest time; and here at Carolina Farm Credit the appraisal team is gearing up for their own type of harvest.  

Every year between October and December the appraisal team harvests data from the multiple listing services throughout the association’s territories and begins to analyze the information to develop their annual Real Estate Value Trends report that is published each year in the spring. The Real Estate Trend Report investigates and determines the current trend of land values in three classifications: 5-20 acres, 20-75 acres, and 75+ acres; as well as the residential market trends in 13 regions that constitute Carolina Farm Credit’s 54 county territory.

So you may ask if we have this report available, why do you need an appraisal? The reason is three-fold: (1) Because of the size of the territory the association covers, this report is a very high-level analysis (imagine trying to buy a piece of land with only the view from an airplane). (2) The real estate market is not static; the appraisers are constantly analyzing sales throughout the year to see what the market is doing. (3) Every property is unique. When an appraiser is tasked with appraising a property they will inspect the property for its unique features and search for the most similar, “comparable” sales within the subject’s market. These unique features usually include:

  • Location – distance to employment, schools, services & surrounding land use.
  • Frontage/Access – amount of frontage, type of road surface & who maintains it?
  • Quality – topography, floodplains, site improvements, shape, size & utility.
  • Easements – conservation, roadway, utility, etc.

The appraiser then compares the subject and comparable sales, based on these features, to determine how the subject property “fits” within the market and thus utilizes this analysis to determine an opinion of value for the property. The appraiser then submits an appraisal report which provides a description of the property and the real estate market area; and of course, the appraised value.

We know that when our members come to us for a loan; whether it is for a purchase, operating funds, or a construction project, they want to get underway as soon as possible. In order to facilitate this, Carolina Farm Credit has eight Certified General Appraisers and three trainees on staff to service the appraisal needs for most transactions processed by the association’s loan officers. We also contract with a network of dependable independent “fee” appraiser’s to further increase the capacity and efficiency of the appraisal process. Certified General Appraiser Certification requires extensive educational requirements and an “apprenticeship” based training model; this combined with Carolina Farm Credit’s broad range of agricultural experience and industry-specific data, equips our appraisers with the resources and competency necessary to meet the appraisal needs of Carolina Farm Credit and it’s territory’s agricultural community as a whole.