With vacant land, anything is possible. The property could be improved with anything from a residential subdivision, industrial property, local bakery or auto repair shop. With a vacant land appraisal the highest and best use of the land must be determined before any attempt to value the property can be made.
When evaluating a parcel of vacant land we have to determine if the land is zoned for residential, commercial or industrial use. Once the zoning and the corollary permissible uses of the land have been determined, the appraiser will begin the process of valuing the property.
Market Area Analysis
A market area can encompass one or more neighborhoods. The analysis should reveal:
- Price patterns and market preferences
- General conclusion on highest and best use of the site if it remains vacant
- General conclusion on highest and best use of the site as improved
- Definition of the primary area from which comparables will be selected
- What properties within a market area have different values
- All positive and negative value influences of the neighboring properties and nearby land uses
- Any changes to the market area that may have affected values since the comparables were sold.
Other factors taken into consideration are: Social, Economic, Governmental & Environmental forces, typical marketing time, neighborhood profile and site analysis.