farm appraisals

Spurgeon Appraisals has provided farm valuation services for properties throughout northeastern Missouri, western Illinois, and southeastern Iowa. Below you will find a link to a page describing our normal service areas for farm appraisals. However, we have often done work outside of these areas, so you should still call us for appraisals in counties or cities near these. Or we could even refer you to another qualified appraiser in your area.

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On the remainder of this page, you will find our past newsletters on the topic of farm appraisals and related topics. Be sure to check this page often for updates, or subscribe to our newsletter for other kinds of helpful articles.

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by Mason Spurgeon, General Certified Real Estate Appraiser

February 2019

At the end of December 2018, I completed two farm appraisals on properties in Brown County, Illinois, that I had appraised previously in 2016.  One of the properties was over 80% tillable while the other property was more of a recreational tract, less than 40% open.  After completing the reports, I looked back to see how much the values hand changed.  The differences in value were shocking.  They had only declined in value between 2.6% and 3% over the past two years.  This is not a large decline in value and could be attributed to any of three factors. 

(1) Difference in Comparable Sales Data: I have always said that an appraisal is only as good as the data used, and this could have been the case for the small decline.  As appraisers we do our best to estimate the value of a property using the best market sales we have available from the area.  The sales data used in my farm appraisal reports could have been more like the subject in one year and slightly different in the other.  This is a matter of opinion and is difficult to quantify.  Also, the total number of comparable sales could have been different.  There were limited sales in late 2015 and early 2016, but more sales in 2018. 

(2) Commodity Prices: We often hear that commodity prices are falling. However, according to the chart below from, the price of corn was on the rise in 2018.  While the prices are nowhere near the prices of 2011 and 2012, they are currently on an upward tick.  The change from 2016 to 2018 was upwards by about 6.5%, but everywhere you turn someone is talking about the falling commodity prices.  This may be a good indicator that popular opinion can be contrary to factual data.

Corn Prices Historic Annual Data

(3) Interest Rates: Again, we hear about interest rates on the rise. While this is true, they are not jumping to the extremes of the 1980s—but they are still jumping.  As you can see from the graph below from, the 30-year fixed rates have fluctuated over the past five years.  In January of 2016 the average rate was 3.79%, and in December of 2018 the average rate was 4.55%. This is an increase of about 20%. While this appears to be a larger change in the interest rates on a percentage basis, it is still much lower than the 10-18% interest that was seen in the 1980s.

Interest Rate Changes 30 Year Fixed Mortgage Rate

While I still don’t know the exact reason for the small decrease I noted in my appraisals, it is evident that uncertainty in the market is a driving force.  Farmers still appear willing to pay a premium for higher end farms, while marginal farms appear to have held steady or declined somewhat in their prices.  This is evident from the farm sales that were seen at the end of 2018. 

In conclusion, I still have not seen the large drop in land prices that everyone in the real estate world has been predicting.  Sure, there are sales of properties that have sold at the upper end of the market and the lower end of the market, but nothing out of the ordinary.  Overall, the market appears to be holding steady and land is still a great long-term investment.

Spurgeon Appraisals regularly appraises a variety of property types. We have experience appraising farms, residences, and commercial properties. We pride ourselves on providing excellent customer service and quality appraisals. Contact our team to see how we can meet your appraisal needs and exceed your service expectations.

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by Mason Spurgeon, Certified General Real Estate Appraiser

June 2019

Having recently appraised two different types of grain facilities, I was reminded of how appraisers may need to follow different methods even when appraising the same kind of property. To the uninitiated, a grain facility is just a grain facility: they store grain and usually sell on a per bushel basis. But my two recent projects showed me that grain facilities fall into different classes of their own based on various factors—especially highest and best use, and overall condition.

appraiser grain facility

The first facility I appraised was set up for a private farmer and was recently constructed. It was a very high capacity private facility with a loop system and over 230,000 bushels of storage. Sales for loop systems are very difficult to locate, but at Spurgeon Appraisals our sales research and appraiser network is second to none. After several hours of research, comparable sales for loop systems were finally located. Sales of newer facilities indicated a very low percentage of external obsolescence, which showed that these properties are in high demand, because a buyer is willing to pay what the seller has in the property’s construction costs, minus physical depreciation.  

The same cannot be said for older facilities. The second facility I appraised was an old feed mill that was still in operation. However, after inspecting the facility and equipment I determined that the highest and best use was as a private grain facility rather than a feed mill. Small feed mills are not as prevalent as they once were. Many have gone out of business or converted to other types of operations. Because of the condition of the facility, the external obsolescence on this property was much higher than that of the first property appraised. Buyers of these older properties recognize that there is less demand and higher maintenance costs involved and will expect a discount.

appraiser grain storage

Buyers of older facilities have to be vigilant. Maintenance costs and repair costs could be very high, which is the reason for the external obsolescence. Also, it may not be the exact setup or modern equipment the buyer wants, and the cost to add is very high. The overall setup of an older facility is typically not as well thought-out as a new facility. New facilities are often built with expansion in mind, whereas older facilities sometimes appear to be thrown together with little room for expansion.

At Spurgeon Appraisals, we strive to complete a thorough appraisal report with every aspect of the property taken into consideration. Call or email us today to see how we can help you with your appraisal needs.

Spurgeon Appraisals regularly appraises a variety of property types. We have experience appraising farms, residences, and commercial properties. We pride ourselves on providing excellent customer service and quality appraisals. Contact our team to see how we can meet your appraisal needs and exceed your service expectations.

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by Matthew Roberts, Certified General Real Estate Appraiser

March 2017

For many purposes, appraisals providing an opinion of value for an entire property and rights of ownership are sufficient.  Many appraisers are primarily experienced in appraising complete ownership interests in a property because it is most commonly requested.  Other divided interests include “partial interests,” such as interest divided by leases or easements.  By contrast, “fractional interests” are undivided interests in the real property.


A fractional interest of ownership in real estate exists when two or more parties each own an undivided fractional share of real property.  This interest arrangement is also known as tenancy in common.  Undivided fractional interests often occur as the result of inheritance or transfers between family members and by family or business owners acquiring real estate without an ownership structure already in place.

In the absence of a written ownership agreement specifying otherwise, all owners can possess and use the entire property.  Each owner will have the right to enjoy the property and have a share of the property’s income and expenses.  While each owner has equal right to use the real estate, they cannot partition or designate a part of the property as being their own, nor can they exclude other co-owners.  The more fractional owners that a property has, the more diluted one undivided interest may become.

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The unique traits of fractional interest can lead to some unique appraisal work, which in turn gives rise to some commonly asked questions. For example, I recently appraised a 25% undivided fractional interest in a motel property.  As with many fractional interest appraisals, we were eventually asked a question like this: “Why would the value of a 25% fractional interest not be exactly 25% of the overall property’s market value?”  The short answer is risk.

Undivided fractional interests often suffer a discount when they are bought or sold on the market, due to the lack of ownership control and the lack of marketability.  When comparing this type of ownership with 100% fee simple ownership, there is understandably less desirability and more risk from the standpoint of a potential owner or investor.  Attracting a willing buyer commonly requires a discount to the proportional share of the overall property value.  For these reasons, a fractional interest often has a market value below its pro rata share.  Attorneys, accountants, courts, and the IRS have all recognized that a discount should be considered for the market value of a fractional interest.

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A fractional interest may need to be appraised for several reasons.  In the event of a gift or inheritance, an appraisal may be required for compliance with estate tax regulations, but could be beneficial ahead of time for estate planning.  Or perhaps you are involved in a potential sale; whether buying or selling a partial interest in real estate, an appraisal can keep price negotiations reasonable and add leverage when dealing with the other parties involved.

We have experience in appraising fractional interests in real estate.  With reliable data and credible methods, we are able to determine the effect on market value of particular interests and arrangements.  If you require the valuation of a fractional interest, please feel free to call.  Also see what other customers are saying about our service on our Customer Reviews page.

Spurgeon Appraisals regularly appraises a variety of property types. We have experience appraising farms, residences, and commercial properties. We pride ourselves on providing excellent customer service and quality appraisals. Contact our team to see how we can meet your appraisal needs and exceed your service expectations.

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by Mason Spurgeon, Certified General Real Estate Appraiser

February 2017

One of the common misconceptions about real estate appraisers is that our valuations are strictly concerned with real estate: acreage, location, buildings, soil types, and so forth. This conception is true in most cases. However, another important factor for appraisal work concerns cases of co-ownership. When a property is co-owned according to some special agreement, any market buyer will realize that he can only purchase that property “with strings attached.” This affects how much he is willing to pay for that property. And since appraised values are meant to reflect market values, appraisers must account for these forms of co-ownership.

One such example is the life estate. A life estate is an agreement whereby an individual’s interest in real estate is limited to that individual’s lifetime, with the property passing to other recipients at the individual’s death.  The creation of a life estate divides the fee simple estate into two lesser estates held by the “life tenant” and the “remainderman.”  The person who holds the life estate is called the life tenant, and those who receive the property at the death of the life tenant are called remaindermen.

farm appraisal northeast missouri

The life tenant will have some specified right to use, occupy, and control the property under the life estate until the life tenant passes away, at which time the life estate is terminated.  The remaindermen is then in control of the fee simple interest of the property, the full bundle of rights, and will have the total right to use, occupy, and control the property. Typically, someone who wants to ensure that the transfer of their property is smooth after their death will sell or gift the property to another person, but retain a life estate.  Life estates in our market area are usually formed between family members.

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Many life estates apply to the entire property, and the life tenant retains all the income from the property and the use of the buildings, and lives in the home.  However, some life estates are only applicable to the home and a few acres.  This is good for the remainderman, who can now use the farm ground and/or other parts of the tract to help pay the life tenant for the property, while the life tenant can remain in the home.

The existence of a life estate is usually listed in a deed near the legal description.  For this reason, we always ask for a legal description or deed for the subject property we are appraising.  These documents need to be reviewed with careful attention to detail.  Every life estate is written differently depending on the lawyer and the life tenant’s wishes.

Developing an opinion of value for a property with a life estate can be challenging for appraisers.  These arrangements must be viewed through the eyes of the market to determine how a potential buyer would pay for a property with such an agreement. However, at Spurgeon Appraisals, we are experienced at appraising these kinds of properties.  If you have questions about valuing your life estate, please do not hesitate to call us.  Our customer service is second to none.

Spurgeon Appraisals regularly appraises a variety of property types. We have experience appraising farms, residences, and commercial properties. We pride ourselves on providing excellent customer service and quality appraisals. Contact our team to see how we can meet your appraisal needs and exceed your service expectations.

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