There are so many factors in placing an accurate value on your land. Most lazy real estate agents or land owners just want to look at some recent sales online or recently listed MLS lands in the same state or area to determine the per acre price that can be cookie-cuttered to your specific land BUT that is NOT the way to give your land an accurate valuation for a speedy sale. In fact, this could be a long and costly mistake.
There are so many factors that have to be considered to get a fair valuation and some of these factors will help in getting a better picture of what the fair market value of your land is worth:
1. Location, Location, Location! This old saying is really true… If you had 100 acres in downtown New York City, you would be a multi-millionaire waiting to hit the lottery but if you had the same 100 acres in the middle of a swamp, you may never get a penny from a real buyer. So being realistic about where your property is located in your state and just how desirable that location would be for potential buyers (and there isn’t many of them) is critically important. I like to think of these items in a 1-10 scale with 10 being Most Desirable Location (downtown New York City). Where does you property position on the scale and why?
2. There is plenty of land everywhere and there just isn’t that many real buyers for land so what other factors will help us determine a fair market value and how much will I have to discount it to get real buyers looking at MY LAND instead of all the other priced right land values? Well, there are a lot of parcels available in any one county and the more features your specific property has the more value we can give to it. FOR EXAMPLE: Has your land just had a new luxury home built a year ago? Does it have other out-buildings that were recently built in the last year or two? Older buildings are more of a deterrent as the potential buyer does not place much value on them and in fact most look at them as “how much will it cost me to repair or remove these older buildings” which can take away from your base land price. So for older outbuildings, mobile homes, residential houses older than 15 years old or any buildings that need any type of repair, you will want to classify them on a scale of 1-10 with 10 being a newly built luxury home. Be objective so as not to scare off the 1 real buyer that may be interested in your specific land and not endless costly repairs.
3. Zoning can be a major factor in determining a fair market value for your specific land. Generally, commercial land is most valuable and agriculture zoning is least valuable BUT this is NOT always true. We bought a commercial 6.2 acre parcel in Avon, New York and thought it would be worth $100,000s and because of the local business economy it was worth less than basic residential land pricing, however we could not change the zoning and until today, we have been stuck trying to sell this land for over 4 years with not 1 offer. I wish we knew about the local economy before we bought this parcel and now we have a hefty tax bill and marketing expenses having us losing money every single day we hold this land. What is your land zoned and how is your market for that specific zoning? 1-10 and 10 being the most desirable zoning of them all and there are buyers everywhere knocking my doors down to buy my land.
4. What are the assets on the land worth? Everyone thinks because there are trees on their land that they are commercially valuable but really in MOST cases these trees have no or low commercial value. In other cases, there may be 1000 head of dairy cows that come with the sale of land and these would add value to a “dairy farmer buyer” but would not have any value to a residential home lot buyer. Or maybe there is an orchard of orange trees that are 15 years old (last years of their productive life) and the buyer is a produce grower thinking it will cost $10,000s to remove and dispose of all these old orange trees? A lot of times, we look at the assets on the land as valuable while others take away value as it would cost them money to deal with these elements of the land. Are your assets really assets or would you have to deduct from the land value to get these issues responsibly dealt with by someone else?
5. Soil Type is really important to some buyers and having your soil tested and classified is critically important to any buyer who is going to consider the land for crop or livestock production. What is your soil type and does it add or decrease the lands value? Is it just sand or clay or fertile volcanic soil? Moreover, we find many times that land that has been farmed for many years typically have depleted soils and may take from 50 to 100 years to replenish the soils to a healthy productive level and for a buyer to want to invest that many years and costs in rejuvenating the earth just doesn’t make sense and hence their interest and offer price would certainly be reflected. What is your soil type and quality on a scale of 1-10 with 10 being the most fertile and volcanic soils available in the world.
6. Wetlands, Uplands, Pasture Lands, Native Natural Forest or PUD Lands (Planned Unit Development). Well needless to say but most real buyers do NOT like wetlands. There is a saying in our state: “I’ve got some nice swamp land to sell you in the Everglades”. Selling property with wetlands is a challenge and the lands are usually protected lands so the buyer is really buying a non-productive long term tax bill that is not suitable for most considerations. Uplands are dryer and have more inherent uses like pasture lands or basic farm lands which has a higher value than wetlands. Native Forest lands have an appeal for a naturalist but has a very low value as far as lands go because they are not productive and the economic impact to upgrade them to pasture lands or farm lands generally is not viable or cost effective. Most times PUD Lands are valuable because they are fully planned developments that have adjusted zoning accordingly but there are counties everywhere where the developer went through the expenses of creating a PUD and afterwards they discovered it just did not make economic sense to continue the development. We have all seen these types of lands where there are paved roads and block after block of vacant building lots. Some PUDs are valuable and some you would have to pay people to take the land. There is a lot to consider when determining what type of land you own and how to place a value on it and the simplest way is the 1-10 scale.
Unfortunately most land owners simply give up and do selfish things like saying “I will just leave it in my will” to the next generation that now has the same burdon. The amazing thing is that most generations do not want the land either and cannot afford the taxes or other responsibilities of land ownership and the lands are many times left to go to “tax deed sales” and the next generation received nothing from the passing of the land.
There is a lot to do in assessing a fair value to your land and then the daunting task of finding the needle in the haystack, a real buyer that wants your type of land and has a pile of cash. We know because we hear the same issues from just about every landowner we come in contact with BUT the good news is we can help. We have teams of experts that do this type of complex work everyday and to them it is common business. We can have an offer in your hands in a few days and close our deal in 10 days or less or any date of the sellers choosing and it is a much better option than “I will leave it in my will”. The heirs are much more appreciative of cash money rather than a tax bill and the complications of a multi-heir property ownership of unwanted lands.
We hope this blog gives you lots of information and helps you to determine what is the simplest and most effective way to liquidate your lands today.
Our experts are standing by now if you want answers to how to sell you land quickly and easily. Start an online chat now or simply fill out the Land Form and one of our experts will call you immediately. We look forward to our business together.