Appraisal clients range from lending institutions needing loan substantiation, to
attorneys for estate values or divorce settlements, to a landowner for estate planning,
property division, or preparing to sell. A typical landowner may only ever need one
appraisal, so appraisals are not something the average consumer is acquainted with.

Many states mandate appraisal licensing. Iowa is one of the few voluntary appraisal
licensing states; basically anyone can render an appraisal. However, only licensed
appraisers can prepare appraisals for large loans and are usually preferred for more
complicated appraisal matters.

State licensing requirements are not comparable to the requirements of professional
appraisal organizations. These organizations require extensive experience, course
work, and written and oral tests that go far beyond state licensing requirements before
awarding a professional designation. Stalcup’s appraisal staff has all earned the
Accredited Rural Appraiser (ARA) professional designation from the American Society
of Farm Managers and Rural Appraisers.

Appraisers compile information from many sources to analyze the value of the subject
property being appraised:

• On-site property inspection
• Courthouse search for property data and comparable sales
• Recent auction results
• Farm Service Agency for crop bases and yields
• Soil maps for soil type and productivity
  
  

In addition to learning as much as possible about the subject property, an appraiser also needs a minimum of three comparable sales to be thoroughly analyzed and compared to the subject for soils, drainage, improvements, configuration, sale date and any other factors affecting value.

There are three approaches to value used by competent, top quality appraisers: Cost Allocation Approach; Sales Comparison Approach; and Income Capitalization Approach. Typically the Sales Comparison Approach is the best indicator of value since this is a head-to-head comparison with comparable sales. The subject property must be considered from the viewpoint of the “typical” buyer. In some cases where good comparable sales are not available, the Cost or Income Approach may provide the best appraisal method.

In conclusion, there are several important items to consider before selecting an appraiser:

• The appraiser’s education, professional credentials, and experience.
• Are the three accepted appraisal techniques used to derive the value of your property?
  
• Appraisal reputation of the company.

If you need a farmland appraisal, please call and discuss the process with us so you can
make an informed decision and receive a quality appraisal that meets your needs.

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