Agricultural Property Listings Key Terms
Learn some of the terms associated with purchasing land through agricultural property listingsAgricultural property listings are a little bit different than their residential listing counterparts. Things like the amount of acreage that can be farmed, type of soil and growing season all come into play when securing a loan and obtaining and piece of agricultural property.
Take the time to learn about some of the different terms associated with agricultural property listings. Here are some of those terms along with informational resources to help get you started.
University of Missouri Extension website for more information on how an absentee landlord functions.
Boundary linesThe boundary lines refer to the edges of the property on all sides. Often the boundary lines have been surveyed and recorded in the county clerk's office. When dealing with agricultural listings, many of them will detail the plots of land along with a surveyor's map that illustrates the boundary lines. Acreage is determined from the boundary lines.
Accredited rural appraiserAn accredited rural appraiser specializes in calculating the potential and current value of farm or rural land. Because farm loans may be structured differently than home loans, it's imperative that an accredited rural appraiser determines the value of the land. An agricultural property listing should indicate if an accredited rural appraiser has appraised the land.
website for the American Society of Farm Managers and Rural Appraisers for additional information on an accredited rural appraiser.
Valuation of landLike residential properties, agricultural land has a valuation which property taxes are based upon. However, with a piece of agricultural land, determining the type of agriculture and identifying the working structures on the land all go into an assessment. Alongside the assessment will be the tax basis from that assessment. Normally, a new assessment will be performed on the property to reflect current market valuations. Any improvements or increase in land value will raise the taxes on that agricultural listing.
website for the Boulder County Assessor's Office to gain a general idea about the metrics that go into calculating the valuation of the land. The valuation merits the tax basis.
Counter cyclical payment, counter cyclical payment calculatorA counter cyclical payment is a payment made by the United States government to a farmer if their crop value falls below a certain threshold. It's an insurance policy of sorts. When dealing with agricultural property listings, many of them have a counter cyclical payment calculator to factor in the amount of government aid they will receive and can apply against a mortgage.
website of Agritrade for further information on how counter cyclical payments operate. The US Department of Agriculture also defines and explains the term further.
Sealed bidA sealed bit refers to an offer made by a buyer to a seller that only those two parties can see. Once the potential buyer has submitted their bid they can only raise the amount, not lower it. These bids are usually made on a price per acre basis and are relevant for both purchasing and leasing land.
website for US Farm Lease for further information on how a sealed bid is placed and operates.
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