Appraisal Process

Process and Methodology

All appraisal assignments conducted by Sterling Consulting, LLC are completed in compliance with USPAP (Uniform Standard of Professional Appraisal Practice). The cost, sales, and income approaches are the valuation methods used by Sterling Consulting, LLC.

The cost approach uses stumpage sales prices from Timber Mart South, local timber sales, and any other available sources (i.e. Forest Service, RISI, F2M).  Land prices are extracted from comparable land sales, and premerchantable values are derived from yield tables and estimated associated costs (plantation establishment costs, fertilization, operating costs). 

The sales comparison approach uses rates (land and timber) from individual comparable sales applied to the subject property quantities to indicate a value for the subject (typically five to six sales are utilized); the rates from the comparable sales are adjusted as necessary using a timber index (such as Timber Mart South) and a land index (i.e. Farm Real Estate Index). 

The income approach typically modeled is where timber harvest volumes over a holding period are estimated, and at the end of the holding period a reversionary value for the land and timber is added to the timber harvest revenues.  Yield tables such as SiMS, in house yield tables, and GaPPS are used after the first year or two to predict harvest volumes.  For example, the in house yield tables can be based on SiMS and the actual inventory from the subject property.  Growth rates can also be used instead of yield tables to predict harvest volumes.

Even though, Sterling Consulting, LLC is a small company (composed of only one individual), the small size allows for flexibility, personal touch, and quality control. Because all of the work is performed by Sterling Brothers, clients get an assurance that their work is being handled by an experienced and qualified appraiser and forester throughout the project. None of the appraisal work is contracted out. Clients are able to have one single point of contact to talk to regarding projects. In order to insure the quality of each appraisal project, Sterling Consulting, LLC has several controls in place. For instance, data/numbers are entered into one location; they then populate the appropriate locations throughout the spreadsheets and report. All numbers are double checked for accuracy, even automatic calculations are manually spot checked. By having an experienced and qualified appraiser conducting every aspect of the appraisal project, any errors can be quickly spotted and changed to produce a quality appraisal report.