Valuation of a Fruit Farm | Part 2
VALUATION OF A FRUIT FARM | PART TWO
(with application to a citrus farm)
INSPECTION
Inspection is carried out for the obvious reason that a property cannot be valued unseen, but as well as to note:
- Verification of physical features, (soils, topography and climate) that determine the production potential of the farm;
- Plantation population (spacing and production models), tree ages and health;
- Irrigation equipment (type and condition);
- Improvements (measurement for record only)
INSPECTION OF SALES
The first object is to verify the sales information.
It is obvious that one would try and collect exactly the same type of information as that which was gathered in regard to the subject property. This is almost never achievable but if handled correctly a lot of necessary information can be obtained from the present owner. Some owners may be proud of the fact that he/she has just acquired the farm and may be willing to share information regarding the farm with you and may allow you to inspect his farm. However, some farmers will not be so forthcoming and in general the following etiquette should be followed:
- Be polite and do not be pushy or invasive;
- Be knowledgeable and ask relevant questions only;
- Do not spoil this source of information for other
If possible, inspect the farm and ask questions for the purpose of obtaining general information regarding the land use, cultivated and arable areas, productivity and improvements.
Sellers and purchasers seldom transact except for good reasons. Probe for the motivation behind the transaction and for special circumstances that may prevail. (Adjacent farmer, mother-in-law, lotto money, etc.)
Market behavior is not predictable, the market is not organized or perfect and there is no single method of obtaining meaningful values. Adjustments for dissimilarities must be made.
The valuer’s task is to study the market and to simulate market behavior.
OTHER SOURCES OF INFORMATION
Banks, Estate Agents, Farmers, etc. Publications – economic trends.
