Tree Appraisal - A Step-by-Step Example

​Below is a step-by-step example of a tree appraisal I recently performed using the Trunk Formula. This is used to determine the value of trees too large to replace. To read ore about tree appraisal and valuing trees in general, check out our article on the subject. 

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I was retained to appraise a 22-inch diameter Bur oak (Quercus macrocarpa) in Naperville, Illinois.
 
In order to determine the value of the tree, I utilized the trunk formula method as outlined in the Council of Tree and Landscape Appraisers Guide for Plant Appraisal, 9th edition. The trunk formula is the best method for appraising individual trees that are considered too large to replace with container or field-grown stock. Determination of the value of a tree is based on the cost of the largest commonly available transplantable tree and its cost of installation, plus the increase in value due to the larger size of the tree being appraised. These values are adjusted according to the species of the tree and its physical condition and landscape placement. Detailed calculations can be found at the end of this report.
 
The detailed trunk formula is as follows:

Appraised Value = Basic Tree Cost X Species% X Condition % X Location %
 
Basic Tree Cost = Trunk Area Increase of appraised tree X Unit Tree Cost + Installed Tree Cost
 
Location = (Site % + Contribution % + Placement %)
 
Basic Tree Cost
The basic tree cost is determined by comparing the cost of installing the largest commonly available transplantable tree of a high quality species to the size of the appraised tree. This cost is typically published by a regional committee or state chapter of the International Society of Arboriculture. Given the site's location in Naperville, Illinois I utilized the cost determined by the Illinois Arborist Association (IAA).
 
According to the IAA, the cost to be used is $787 for a 4-inch caliper tree. The cost includes transportation to the site, site preparation, planting, guarantee and profit. The unit tree cost to be used for the transplantable tree is $71 per square inch of trunk cross section.
 
Trunk Area Increase = (22*22*0.785) – 13 = $366.94
 
Basic Tree Cost = $366.94 * 71 + 787 = $26,839.74
 
 
Species
A species rating guide is published by the IAA as well. Species ratings are based on species characteristics, without regard to condition or location. Factors considered in determining species ratings generally include environmental adaptability, biological traits, maintenance requirements and aesthetic characteristics. I utilized species rating guides for Illinois. Based on the IAA guide bur oak has a species rating of 90%.
 
Species rating = 90%
 
Condition
Condition rating takes into account the condition of the tree's roots, trunk, scaffold branches, small branches and twigs and foliage and/or buds. The condition is rated on a scale of 0-32, as follows with my ratings:
 
Roots (2-8) – 5
Trunk (2-8) – 6
Scaffold branches (2-8) – 5
Small branches (1-4) - 3
Foliage (1-4) – 3
 
I have thus assigned 22/32 points for tree condition based on my observations.
 
Condition rating = 68.75%
 
Location
Location rating takes into account the overall site rating, which I have determined to be 80%. This is then compared to the tree's individual placement in the landscape and its contribution to the landscape to determine an overall location rating. I have assigned the tree a placement rating of 80% and a contribution rating of 80%. These are determined by what benefits the tree adds to the property, and how its placement affects these benefits. Benefits include providing shade, blocking the view of neighboring properties and intercepting rainfall.

Location rating = 80%
 
Appraised Value
 
Appraised Value = Basic Tree Cost X Species% X Condition % X Location %
 
$26,839.74 X 90% X 68.75% X 80% = $13,286
 
When the appraised value is $5,000 or more, the value is rounded to th nearest $100. When it is below $5,000 it is rounded to the nearest $50.
 
Appraised value = $13,300.