Acreage Appraisals are typically more complex than an urban residential valuation and vary greatly from ½ Acre Executive Acreages to 10-40 Acre Hobby Farms. In addition to your house, an appraiser will also consider the attributes of the land as well as any other outbuildings such as secondary garages, shops, barns and sheds when conducting their valuation of your property.
Conducting an Acreage Appraisal requires more research and real estate knowledge. There are many different factors to consider when determining property value of an acreage, such as land features, landscaping, land size, location, services, access, size of the acreage and more.
When Should You Consider an Acreage Appraisal?
An Acreage Appraisal should be conducted any time you would have a residential appraisal done, including buying or selling the property, financing or refinancing mortgages, legal proceedings involving the property, and divorce settlements.
Additional times when someone may wish to have an Acreage Appraisal done are if you intend to subdivide the land or if you want to use the land for another purpose, such as a business or farm.
What is Considered an Acreage?
Typically, an acreage is considered to be a parcel of land 1 acre or larger, that is not being used for agricultural use. However, a recent trend is for executive acreage subdivisions to consist of ½ acre parcels, often fully-serviced with architectural guidelines. It may have a home or residence on it, but this is not a requirement. They can be urban or rural.
While this is a general definition, lenders have a much more specific definition. Each lender has their own unique definition of what they will consider in their valuation of an acreage. Major lenders in Alberta typically consider the house, one garage and between 5 to 15 acres of land as part of their valuation, and require the appraiser to “hypothetically” appraise a specific land size, often smaller than the actual size. Some lenders may allow up to 160 acres under certain conditions within a “residential context”. Any land or outbuildings outside of these definitions will not be considered in their valuation. Therefore, often the valuations for lending purposes are not the true market value of the property, as not all of the land and buildings were considered.
Our team of appraisers at Northern Lights Appraisals have years of experience handling Acreage Appraisals throughout rural Alberta. We have extensive knowledge in real estate as well as Alberta’s rural areas that allows us to provide you with a quick and accurate Acreage Appraisal. Contact us today for a free, no-obligation consultation and quote.