May 04, 2023 · 2 min read
One of the biggest challenges faced by ag lenders today is properly assessing the value of land. As property values skyrocket, this is becoming even harder. Farm real estate values have increased by more than 70% since 2006. Nationwide professional land appraiser shortages add an additional layer of complexity to the appraisal process.
Over the next 10 years, the industry will also see a sharp increase in land transfers. “New and beginning producers,” which currently represents 27% of the farming population and is expected to keep rising, now face a high cost of entry. They will need sources of capital.
When it comes to traditional appraisals for farmland, the process is historically complex for lenders. It’s largely manual and requires an enormous amount of time to collect, review and report the information needed to accurately assess the value of land. This lengthy process impacts the borrower experience and creates unnecessary risk for the institution.
In this Bank Business News article, Jim O’Brien discusses why it’s critical that lenders have access to reliable and updated data for farm appraisals. He also covers how the ag lending and appraisal process can be streamlined, and why financial institutions must invest in technology and validated data resources.
Read the full article here!