Legally defined, land comprises a portion of the earth’s surface, together with the earth below it, the space above it, and all things annexed thereto by nature or by man.
Economists define land as the surface of the earth, and all the natural resources and natural productive powers over which possession of the earth’s surface gives man control.
For the purpose of appraisal, land is defined as real property exclusive of improvements.
Property rights in land are established on the theory that the rights in fee simple ownership normally include the rights to:
Do nothing at all
Enter or Leave
There are several characteristics of land that are commonly understood:
Each parcel of land is unique
Land cannot be moved
Land is a non-wasting asset
Land is useful to people
The supply of land is limited
Land value is an economic concept resulting from an understanding of these characteristics, in that two of the four factors that create value (utility and scarcity) are present within these characteristics and, when combined with desire and transferability, form the basis for value.
Legal Description is a description of property that identifies it according to a system established or approved by law
Raw Land is defined as land in its natural state (untouched)
Site is defined as land that has been made ready to use for it’s intend purpose
Sites are the actual physical location of a property (often the street address)
Vacant or Unimproved Land is land that lacks the essential, functional improvement to make it useful
Waste Land is land that is unusable
Units of Comparison
It is often necessary to analyze the differences in size and shape of comparable sale properties in order to apply uniform methods of valuation. To directly compare sites of varying size and shape the appraiser must find a common denominator, or unit of comparison, that will permit him to compare the properties fairly. This unit of comparison should also be able to maintain equity and uniformity for similar properties in different parts of a city or county. Several basis units of comparison to value land:
Front Foot / Frontage
Front foot or frontage is a strip of land one foot wide, fronting on the street, water, railroad or other frontage, and continuing to the rear of the parcel. This method is useful in valuing commercial retail property, warehousing or industrial property fronting on a railroad siding, or parcels fronting on golf courses or bodies of water.
Square foot is that square foot of land, no matter where located in the parcel, is equal to any other square foot in the parcel. This method can be used to value residential, commercial, small industrial sites, and irregularly shaped parcels.
Acre is in theory and computation is similar to that of the square foot method. This method is used in valuation of large industrial sites, shopping centers, rural and farm properties.
Site / Lot
Site or lot assumes that each site (or lot) in a particular subdivision or area is relatively equal to all others in the same group. This method is often found in residential subdivisions, but may also be useful to value sites located in industrial parks.
Unit(s) / Buildable
Unit(s) or buildable should be used when the market indicates that value is derived by how many living units can be constructed within a given area, as with an apartment property. In using this method, consideration must be given to market demand and zoning ordinances.
Animal Units / Crop Capacity
Animal units or crop capacity are other method of units of comparison, used primarily in the valuation of agricultural property. Value calculations are similar to those of units buildable.