Property Valuation
In New Mexico, when appraising a ranch property with oil and gas leases, the appraiser must:
AIgnore mineral rights as they do not affect real estate value
BConsider the mineral estate's value separately from the surface estate, noting whether mineral rights are included in or severed from the transaction✓ Correct
CDeduct the oil revenues from market value
DRequire a mineral rights appraisal from an oil and gas engineer
Explanation
In NM ranch appraisals, whether mineral rights are conveyed significantly affects value. If minerals are severed (not included), the dominant mineral estate may have surface use rights that could affect the surface owner. The appraiser must clearly identify what rights are being appraised.
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