“I’m thinking of selling my land. I think I need an appraisal, but I’m not sure. Do I need an appraisal in order to sell?
The short answer to this question is “it depends.”
If your land is not involved in a trust that requires an appraisal in order to sell, is not involved in a will that requires an appraisal to sell, and is not involved in a divorce or dissolution that requires an appraisal to sell, the answer will most likely be “no, you do not need an appraisal.” If you are looking for an answer regarding what your property may bring in a sale situation, a broker or agent can complete a BPO (Broker Price Opinion) or CMA (Comparative Market Analysis) instead of an appraisal.
What is the difference between an appraisal and BPO/CMA?
An appraisal is completed by a licensed appraiser who is a disinterested third party who will provide an appraised value. The appraiser’s definition of market value is “a most probable price, as of a specific point in time, sold in a reasonable amount of time, and in terms of US dollars.” An appraisal MUST include all information required in USPAP (Uniform Standards of Professional Appraisal Practice).
A BPO/CMA will be completed by a licensed broker or agent who will provide an estimated list or selling price. A BPO or CMA does NOT have to conform to USPAP as a BPO/CMA are not providing an opinion of value and are not appraisals.
While an appraiser and broker/agent often consider the same data (current competitive listings, comparable sales, market conditions, etc.) an appraisal often takes more time and costs more, given the stringent requirements imposed by USPAP. A BPO/CMA can typically be completed in a shorter time period and cost less – and all or part of the cost of a BPO or CMA can be rebated back at successful closing as the first step in the listing process is to provide the seller with a list or selling price.
Now that you know whether you need an appraisal or BPO/CMA, you want to know what information an appraiser or broker/agent will need to complete their work. An appraiser and broker/agent will basically need the same information in order to provide either a well-researched appraised value or an estimated list/selling price. Some of the basic information needed includes the following (an appraiser or broker/agent will also ask for additional information, but that is another article 😊):
- Client name, address, contact person and phone, fax, e-mail
- Property address, PID number, legal description
- Type of property: bare land; mix of tillable, non-tillable; whether there are improvements; whether it is irrigated or not; whether it is tiled
- Who to contact for access/information on the property (name, address, phone, cell number, and e-mail)
Other helpful information, if it is available:
- Surveys, MLS data
- FSA 156 Form
- Conservation maps/practices
- Tile maps
- Title policy or abstract copies that describe any encroachments or easements
- Home inspection reports or other reports for termites, septic systems, wells, etc.
- Written property agreements, such as maintenance agreements for shared driveways, etc.
Please call National Land Realty’s professionals in Minnesota and Nebraska for your land BPO, CMA, or appraisal needs!
Ryan Schroeter, ALC (Accredited Land Consultant)
Licensed Broker – NE & IA, National Land Realty
Previously licensed appraiser
Licensed Agent – NE, National Land Realty
Licensed Appraiser – NE
Terri Jensen, ALC (Accredited Land Consultant)
Licensed Broker – MN & NE, National Land Realty
Licensed Auctioneer & Appraiser – MN