GFM’s Jeffrey Hignight and Houston Matthews recently spoke to students in the Land Economics/Rural Appraisal class at Arkansas State University in Jonesboro. Jeffrey began the presentation with the ways in which professional farm managers, consultants and land brokers use appraisal data, which led to discussions about cap rates, improving land, dividing land between multiple owners and selling price expectations under a real estate listing or auction.
Houston explained the criteria of becoming an appraiser, the levels of appraisal certification and appraisal accreditations, such as the Accredited Rural Appraiser available through ASFMRA. He also provided a brief history of the Savings and Loan Crisis in the 1980s that led to the current valuation licensing, standards and procedures.
To prepare students for their required mock appraisal, Houston provided insight into the process of collecting the necessary data. This includes verifying comparable sales were an arm’s length transaction, buyer motivation, size and location relative to the subject property, improvements, land condition, soil quality, water quality and availability, flyways, overflow potential, production information and USDA data. He ended by discussing the three approaches to value (cost, income and sales approach), how to use the approaches in valuation and how to reconcile a final value for real property.
The students had excellent questions and showed great interest in our profession. We are grateful to Mark Jordan for inviting us to speak to his class and wish the students well in their educational and professional pursuits.