Land can decrease in value, but it s not called depreciation. Improvements depreciate, but land loses value. In rural areas where vacant land sales are common, the adjusted sales comparison approach is a simple way to estimate land value. This is also the most widely-used method for appraising improved residential property. The first step in this approach is to select three or more land sales which most closely resemble the property being evaluated.
Comparable sales are difficult to find.
Private real estate information services such as Experian, Metroscan and Dataquick focus their efforts on urban areas and don t serve rural counties very well. But even this information is not always complete or accurate. However, real estate data is improving rapidly as consumers with personal computers demand more information to help them with buying, selling, investing and borrowing. It s important to find actual confirmed land sales and not be confused by asking prices. The two can be very different.