• Attributes;
– Land is totally unique in many different ways, location, type of asset, so forth
– We just view land differently than anything else; there is a real intrinsic value to it; people fight and die over it
– Land is useful and so its valuable

• Geographic
– Land represents a specific point on the earth. We can narrow down the description to be very precise
– Geography determines the types of resources that are available and they determine the value of the land; both human and physical resource base will determine the value

• Legal concepts
– Own the surface and what’s above and below it**
• Bundle of rights
– Sometimes referred to as a bundle of sticks; each right represents a ‘stick’ in the bundle
• Right to occupy and for private use
• Right to convey the rights (lease, sell)
• Right to bequest (give it away)
• Right to do none of these, just sit

• Limits on use rights for land
– Public
• Taxation
• Eminent Domain
• Police
• Escheat
– Private
• Restrictive covenants in the deed
• Easement
• Reservation

• Land is limited resource to be shared by everyone
• Different points of view; ‘when it comes to land there are a thousand different economies’
• Society has restraints on the use of land
• Land is a fundamental resources
• The economic concepts related to land form the basis of appraisal

• Real estate; usually includes the buildings and other permanent attachments
• Real property; interest, benefits and rights in ownership of real estate.
• Fixtures; attachments; usually determined by law whether or not it is something that can be removed.

• How is the property attached to the land
• The intention of the one who made the attachment
• The nature of the item and the adaptation to the real estate.

• Price; what a particular buyer agreed to pay and a particular seller agreed to accept; different circumstances will change the price.
Remember price and opinion of value
• Cost; this is total expenditure including things like architectural design, financing, and so forth

• Market Value: You must know how the market value is determined and what it represents
“The most probable price, which a property should bring in a competitive and open market under all conditions requisite to fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.”

• Assumes a specific date
• Both parties are typically motivated and well informed
• Reasonable time for exposure to the market
• Cash or terms of financing comparable to cash
• Normal consideration; no special or creative financing, no sales concessions

• Utility; satisfaction
• Scarcity; Current or anticipated supply relative to the demand
• Desire;
• Effective purchasing power (effective demand)
– Do you have the money or resources
• Use, investment, going concern, insurable, assessed and liquidation are all other types of values

• Fee simple; ownership without limitations or restrictions. An appraisal is done as if it were fee simple
• Life estates; all of the rights, use and control are limited to the lifetime of the designated party; created by wills or deeds of conveyance
– Life tenant- the one who holds the life estate
– Remainderman- person who gets the property on the death of the life tenant

• Tenancy;
– Tenancy by entirety; husband and wife; both own it together and can’t do anything without the other agreeing
– Joint tenants; joint ownership with the right of survivorship; you own it together but when you die your share goes back to the other owners
– Tenancy in common; there is an undivided interest in the property; when you die your share goes to your heirs

• Vertical interests; in the ground and the air
• Easements; convey use but not the ownership of the property
• Condominiums, cooperatives, time shares are other forms of ownership