Are you interested in determining your land’s market value? This task can be difficult, particularly in a market that is constantly changing. Estimating land values involves considering many different factors, and landowners may sometimes overprice their properties, leading to extended periods on the market. Here are some ways to determine what your land is worth.
Comparative Market Analysis
Typically when an appraiser or realtor is trying to determine the value of real estate, they will look at comparable sales or “comps” using a Comparative Market Analysis or CMA. For houses, this is much easier because they are more easily compared to each other to get an average price per sq ft of similar homes. Land can vary much more depending on a lot of different factors, which are discussed in more detail below. Even so, hiring an appraiser or realtor to run a CMA to determine the value will at least give you a good starting point.
Find Comparable Sales Yourself
There are lots of websites that show the past sales of land including Zillow, Landwatch, and even courthouse records. If you’re not experience with researching comparable sales, it may be best to hire a professional to help. However, it is possible to do yourself. You’ll need to look at each piece of property to determine how similar it is to your own land. Once you have found several pieces of land that are very similar then you need to determine the price per acre. Multiply this number by your own acreage to determine a market value.
What Variables Determine Land Value?
There are a lot of factors that go into the valuation of land. Below are just a few of them but you’ll need to do your own research for your specific property.
Zoning and Use Restrictions
The property’s zoning and potential usage are crucial factors to consider when evaluating its value. For example, if the land is zoned for commercial purposes at the end of a residential block, its value will differ significantly from a piece of land that’s zoned residential at the same location. Likewise, if a piece of land is more suitable for recreational activities like hunting, it may not command the same price as land located near a major attraction or a prime building location. Flood zones are another factor to take into account, as land that is prone to flooding will not be desirable for building. Finally, it’s important to factor in holding costs, such as annual taxes and association fees, when evaluating the value of the property.
Road Access
Is your land easily accessible by road? If it’s a residential property situated on a main road, its value may decrease, but if it’s commercial, it may increase the value. What is in the surrounding area? A shopping plaza, grocery store, or other attractions can boost the value of your land. Additionally, consider the condition of neighboring properties, as a neighbor’s unkempt yard could decrease your land’s value.
Utilities
Does your land have utilities already on it or nearby that can be accessed? Land with utilities already in place is generally worth more than land that is completely undeveloped and does not have any access to utilities. However, if the land is more suitable to recreational activities like hunting, fishing, hiking, etc. buyers looking for this type of land might not need any utilities.
Topography / Usable Acreage
If your land is not in a desirable location, like near the beach or a popular attraction, it may take longer to sell, unless it is priced appropriately. To increase the appeal of your listing, it’s important to highlight any unique or usable features of the land.
For example, does it offer a scenic view? Is there ample space for pets and children to play? Are there any natural habitats or wildlife in the vicinity? Including such details in your listing can enhance its value to potential buyers and increase the selling price by thousands of dollars.
Demand / Scarcity
The demand for your land in your area is a crucial factor in determining its value. Are there many similar properties available, or is yours a unique and rare find? If there are plenty of comparable properties on the market, then you may not be able to ask for more than market value, as buyers will have other options to choose from. You should research the prices and time on the market of similar properties in the area to help you set a fair price. If similar properties have been on the market for a long time, it may indicate a lack of demand and you may need to lower your asking price to sell quickly. Conversely, if there are few properties like yours, especially if it has unique features, you may be able to ask for more than market value, although it could take longer to find the right buyer. Ultimately, the value of your land is what someone is willing to pay for it and what you are willing to accept.
3 Ways To Sell Land
Still not sure what to do? It’s smart to think about the different options that are open to you before making the decision. There are typically three ways you can sell land: selling with a real estate agent, selling by owner, and selling to a cash land buyer like us. See below for a comparison.
| Selling with an Agent | Selling Land By Owner | SOLD to Value Land Buyers | |
|---|---|---|---|
| Commissions / Fees: | 6% on average. That is if they will take the listing | Listing fees, MLS fees, Land site fees, Marketing fees. | ZERO! |
| Average Days Until Sold: | 6 mo. +. Land can be hard to sell, sometimes land sits for years. | 6 mo. +. Land can be hard to sell, sometimes land sits for years. | We can make you an offer this week! |
| Number of Showings: | It Depends | It Depends | NONE! |
| Who Pays Closing Costs?: | 2% on average is paid by seller. | 2% on average is paid by seller. | We pay. |
| Closing Date: | 30-60 +/- days after accepting buyers offer | Variable. | Up to You! |
| Costs for Land Improvements: | Variable. | Depends on land condition | NONE! |
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