An agricultural appraisal can be much more difficult than a residential appraisal and usually requires more specifications. An agricultural appraisal in Costa Rica is carried out to find the “right price” of a property in the real estate market.
But an accurate appraisal will require a wide knowledge of regulations, which can vary by region and location, commodity prices, and even land quality.
Appraisers have three common approaches to farm property: cost, sales comparison, and income.
In this article we tell you what an agricultural appraisal is and how it is regulated in Costa Rica.
The main challenge is to determine, within certain ranges, the real commercial value of a land, for which there are several methodologies or, in particular, a combination of these. What is sought is a fair price for the properties that avoids distortions in the market, such as speculation, and that each party feels that it was a good deal.
General aspects of an Agricultural Appraisal in Costa Rica
The globalization and formalization of the “real estate market” has led modern societies to establish general parameters for measuring the price of land. Urban land is an economic asset and as such, in Costa Rica different factors have been determined to be able to measure its surplus value. Some of them are:
About the regulations
There are no very specific regulations for carrying out agricultural appraisals in Costa Rica, except for the accounting standards and the considerations of the financial institutions if they request them based on internal regulations (manuals).
In case that these property valuation reports are required for other purposes, they must comply with the respective regulations, as in the case of appraisals for agricultural surveys, expropriations, etc.
The more complex the property, the more there is to know. With a farm, you are dealing with many acres of land. A dairy farm is different from a timber conservation farm, for example, and that is why various aspects or factors that intervene in the approach of each farm must be considered.
At Nativu we always make sure that the transactions are successful for both parties, which is why, in order to provide a better advisory service, we always recommend that an agricultural appraisal be included in the budget.
This is in charge of an agronomist who is an expert in determining the optimal price of the farm based on multiple factors. The appraiser will provide a report with all the necessary information.
It is important to carry out an agricultural appraisal if you own a farm in Costa Rica and expect to obtain a price according to the market and the needs of each party. If you have questions, do not hesitate to contact our specialized advisor: Alfonso Sancho.
