Timber Appraisals
In it’s simplest definition a timber appraisal answers the questions what do you have and what is it worth? What you have is an unknown volume of marketable timber in terms of board feet. What it is worth depends on a combination of factors including species, volume, and quality which results in an estimate of value to buyers in the marketplace.
Timber appraisals, like any appraisal, are done for different reasons for different users. Most often the client is the forest owner and intended user, but sometimes the intended user is a bank or some other institution. Sometimes even sawmills hire us to appraise timber. Common uses of timber appraisals include evaluating an offer to purchase your timber or to evaluate a tract you may want to buy, estate planning, establishing the Basis in Timber (see definition in Forestry Terms article1). Casualty loss, timber theft or damage, and divorce are also reasons for timber appraisals.
A simple timber appraisal can be a forester just driving through a tract to give his or her best estimate based upon experience and education. A very formal timber appraisal will include a detailed inventory of the standing timber by species, size, product and quality, and a formal appraisal report. A detailed inventory will include a measure of accuracy of the volume estimate (an average) plus or minus a certain percentage and plus or minus a specified number of board feet. In Ozark forests it’s reasonable to attain an accuracy of plus or minus 10% or less. For example, a tract with an estimated 8 thousand board feet (MBF1) per acre and a 10% range in accuracy translates into what’s called a Confidence Interval1 of 7.2 MBF to 8.8 MBF per acre.
The appraisal report will identify the intended use and intended user, include comparable sales information, identify the type of value and the interest being appraised, highest and best use, assumptions and limiting conditions, and other formal procedures. Only a professional forester can competently complete a formal appraisal of standing timber. Of course there are many degrees of appraisal in between the windshield cruise and the top shelf formal appraisal. It all depends on the intended use, the willingness to pay, and the value of the timber being appraised.
A timber appraisal enables a forest owner to effectively negotiate with buyers from a position of knowledge. Many owners hire the forester to go ahead and handle the sale too, marking the timber to be harvested, soliciting bids, and supervising the harvest. Unfortunately, many forest owners don’t hire a forester because the profession is little recognized and has such a small presence in Missouri. Many studies across the nation have shown that forest owners on average will receive at least 2 ½ times the money as those who do not hire a forester. It really pays to have a forester in your corner.
1 the Forestry Terms article is posted on the Top of the Ozarks website at http://www.morcd.org/totorcd/Forestry%20Terms.htm
Article by: Doug Enyart, Clear Water Forest Consultants
www.clearwaterforestconsultants.com
Top of the Ozarks RC&D Forestry Committee http://www.morcd.org/totorcd/
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