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Establishing Unbiased Land Valuation.

Estimating the agricultural value of land based upon soil quality, weather, productivity history, and other considerations.

 

Valuation

CIBO Valuation

Determining land value is a complicated process. Different methods and considerations can lead to vast pricing disparities from site to site, as well as wide boom/bust pricing cycles.

CIBO proprietary and objective land-value measure simulates multiple variables to create a standardized valuation system that eliminates “insider” knowledge. These insights increase pricing transparency for the process of buying, selling, or analyzing farmland.

 

What is a parcel valuation?

Land transactions require appraisals because every property is unique, and valuation is the process of estimating the dollar value of a parcel of land. An appraisal report typically establishes a sale price for a piece of property, but there are frequent discrepancies between the property’s market value and the price paid by the purchaser.

That’s why one of the biggest obstacles a land investor faces is discovering the accurate market value of a parcel of farmland. The market valuation is an estimate of the fair-value sales price of the land, but the data needed to evaluate a parcel often isn’t easy to find—or even available.

Why is it important to have an objective measure in land valuation?

Objective valuations help create transparency in the buying and selling process. In the past, purchasers have not been able to assess the financial return from a property; instead, they’ve had to rely on methods as rudimentary as comparisons with similarly managed properties. By using CIBO’s industry-leading process, the land can be more accurately evaluated for the present and future value of the crops planted upon it.

How do we calculate land valuation?

CIBO’s valuation uses an innovative methodology that incorporates:

  • statistical regression approaches and macroeconomic trends;
  • reams of public information on factors like soil types, depths, elevation changes, and weather history;
  • management practices including planting, irrigation, fertilizer applications, and tillage; and
  • satellite imagery to provide deep insight into crop yields, land use, and other key data points.

Our proprietary simulation software aggregates this information to estimate the agricultural potential of land parcels as well as the potential productivity under different cropping and weather scenarios.

Combined with recorded land sales and other value measures, these inputs help us calculate an accurate valuation that reflects the potential of the parcel. More valuation factors are regularly added to our model to adjust pricing in real time and increase its accuracy.

The end result is an objective assessment of dollar value for parcels of farmland. This allows interested parties to make informed decisions for purchasing and renting land, loans, insurance, and other services.



Before your download..



Before your download..