There is no other single aspect of
land ownership which more completely captures the imagination than
the actual selection and purchase of the land.
Sometimes however, on the way to
acquiring the ideal tract of land, many folks, for whatever reasons,
wind up owning the less-than-ideal parcel that needs to be sold
before real-property nirvana can be achieved.
Whether you inherited a piece of
property that doesn’t mesh with your goals, discovered that you
simply need to live in another part of the world, or even if you
bought a piece of property and later just fell out of love with it,
selling land, particularly in a poor market, can appear to be a
daunting task. The amateur’s first reaction is usually to list
with a real estate agent and hope for the best.
Now, far be it from me to discourage
using an agent. This certainly is the easiest way and not
necessarily the least profitable or most expensive, especially in a
booming market. In a less-than-booming market however, it’s good to
remember that listing your property with an agent will subject it to
comparison with dozens, perhaps hundreds of other listings, all
competing with yours in features and price. Selling your property
then, will probably require that a potential buyer finds it to be
either the best he sees… or the cheapest.
If you have unimproved land to sell,
you may also find that the majority of agents are more interested in
selling more expensive improved properties where they stand to make
much larger commissions (and get fewer ticks) so your five acres of
woods may get short shrift when it comes to exposure to the market.
This wouldn't be such a big problem were it not for the fact that
these days, more and more brokers are insisting on exclusive listing
contracts that obligate you to pay them a commission even if you
sell the property yourself to the fellow next door.
That’s why you may want to tackle the
job on your own. These days, you can set your land apart from
the crowd by marketing and selling it yourself. Since the
advent of the internet, it’s easier and more effective than ever,
and the phrase "for sale by owner" has a particular cachet about it
that buyers seem to like. Many buyers assume that they'll be
saving the sales commission by buying directly from the owner.
Of course, you're probably assuming that you're saving the
sales commission by selling it yourself. Which of you is
correct depends on how adeptly you handle your sale.
Evaluating Your Land from a
The first step is to decide on your
price. The timid choose a price too low, and the foolish pick
one too high. What you want to do is find the right price that
will yield a reasonably quick sale, but not generate a stampede of
skinflints to your door.
To determine, or appraise, the value
of land, you need comparables. Using the internet, finding
these is easier than it’s ever been, although there are also a few
The best places to find your
comparables are the places where you plan to advertise. In a
moment I’m going to recommend that you advertise on the internet, so
you shouldn’t be surprised if that’s where I recommend you gather
your comparables as well.
In choosing comparables, you want as
many tidbits of information as you can find; that’s the primary
reason why the web is the best source, because the people writing
the advertisements there aren’t usually paying by the word -
although you'll find that they can still be infuriatingly vague.
Here are the basic things that must be
considered when appraising land:
The fact that you find 80 acres, or 8,000 acres, selling for a given
amount per acre tells you virtually nothing about what your 8 acres
is worth, so ignore it.
Rather, classify your property
somewhat like this: is it from 0 to 3 acres? 3 to 8? 8 to 15? 15 to
40? Of course it can’t be all that cut-and-dried, but remember
to only compare your rural property to others of about the same size
– nothing has greater bearing on the value of unimproved land than
size, except, to a degree, location.
Please note that I am NOT going to
repeat the old saw about the three most important things to know
about real estate. Unless you spent your formative years in a
cave, you’ve already heard it enough times to make you wish you
I’ll assume that, as an adult who can
read and operate a computer, you already know that the price of your
40 acres in western Kansas has very little to do with the value of
New York’s Central Park, but you do need to make a distinction
between a property that’s a thirty-minute drive from a city and one
that’s two hours distant.
I’ve found that most people draw an
invisible line at a thirty-minute commute whether they’re commuting
into L.A. or Buzzard’s Bluff.
Additionally, you shouldn’t compare
land from outside your region. West-coast prices aren’t
applicable to West Virginia, and vice versa.
Okay, that takes care of the broadest
measures. Let’s assume you’re looking for comparable land to
your forty acres in rural Tennessee, we next start to evaluate the
features of the land.
Water: Lake or
river frontage is more valuable to most people than a non-navigable
stream, which is more valuable than a spring, which is more valuable
than a pond, which is more valuable than no water at all.
Almost everyone wants water frontage, but not everyone is willing to
pay for it.
Soil Terrain and
Most small landowners will prefer a mixture of hill and valley, but
level agricultural land is usually more expensive than hilly ground.
However, if your property is smaller, say less than eighty acres,
there will probably be a better market for the mixed terrain that
includes level bottomland and forested hills. Likewise, the best
overall market exists for small properties with a mixture of forest
and meadow as opposed to all woods or all field.
A modern water-well is worth more than it costs to drill. In
the Ozarks, for example, where the typical well costs around $6,000,
I generally value them at around $10K.
While few in number, there are still some properties that don’t have
legal access – that is, a deeded access-easement, or frontage on a
public road. This is what is known as “landlocked” property,
and it is of considerably less value. If you see an extremely
low-priced piece of land for sale, it may be a bargain, or it may
just not have legal access. Curing this can be fairly simple,
but don’t count on it. If it were an easy matter, it would
likely already have been fixed. In most cases, legal access
will require a deed from the neighbor whose land you’re crossing,
and folks tend not to like to sign deeds unless they get something
of significant value in return.
Electric and phone. Check whether your comparables have, or don’t
have, the same utilities that your property has. If not, and
all other things are equal, price yours ahead of those that don't
have what yours does, or behind those that have what yours doesn’t.
This chapter is intended to address land-only sales.
Obviously, if your land has buildings on it, those can add
significantly to the value. If the buildings are of any value,
that is, a livable house or a barn or shed in good repair, this may
be harder for you to estimate or to compare with others. About
the best you can hope to do is to compare the number of
rooms/bedrooms, the square footage, the general condition, and
overall appearance. If the buildings are of marginal value,
give them appropriate ranking, however as advice to a potential
seller of real estate (I’d tell a potential buyer something else)
don’t discount that shack or hovel too severely. A lot of
buyers seem to feel somehow assured if there’s a structure of any
kind on a property. Maybe it seems less intimidating
than starting with empty woods. So if it doesn’t leak too
badly, and isn’t going to fall down in the next few years, you may
consider bumping the price up a few thousand dollars, or leaving it
where it is so that the building provides another inducement to buy.
Finally after you’ve researched all
your research and compared all your comparables, it’s time to decide
on your final price.
Actually, this is the easy part: you
bring all your comparables together and rank them – a spreadsheet
like Excel is good for this. Put the price of each property in
Column A, the “sort” column, and a brief description of the features
in Column B.
Now put yourself in a buyer’s shoes.
Right away, you can see what’s a bargain and what may be overpriced.
The idea is to price your property as a happy median between the two
Now that you’ve arrived at your price,
you’re ready to put your property in front of the world. To do
this, the first thing you need is a web page.
Now, I suppose you could HIRE someone
to make a page for you, but frankly, if you can read well enough to
get this far in this book, you’re perfectly capable of making one on
Nowadays all of my favorite software
packages come for the same price: free. So I’d check out
what’s available at tucows.com or software.com. You can also
make a tolerable web page using Microsoft Word (which probably came
loaded on your computer) however, if you’ve never made any web pages
before, you’ll probably also be needing web-space to put them
on, and you can find both web-authoring software and web-space
available cheap or free with a little thoughtful web-searching.
Once you’ve got the mechanics taken
care of, all you need to do is collect absolutely everything you can
think of that will describe your property, which may include, but
will not be limited to, a written description, lots and lots of
photographs, perhaps taken in different seasons, information about
the local area, last year’s real estate taxes, aerial photos, road
maps and perhaps a .pdf or .jpg copy of the survey, if available.