When you are ready to sell in Minneapolis St Paul, Minnesota , how do you determine the value of your land?
If you are wanting to sell land anywhere in the state of Minnesota , these methods we are telling you about in this blog work as well. One of the methods you might not even thought about! Keep reading.
Use These Three Methods
The traditional real estate appraisal process to land valuation has three common approaches to determine value. The first approach is called the value approach. The real estate home appraiser will look at the market rent for other comparable homes, duplexes, or rental buildings to get a good idea of the potential income that each property is expected to produce. The first cost approach is where the appraiser evaluates how much it would cost to rebuild the property exactly how it is from the foundation to the roof. This approach has a lot more variables, such as the current price of building materials and labor. The cost of the actual building is important to consider, but it’s not usually enough to know the market value of the property. This approach is also used by insurance companies when they are coming up with the replacement value of a piece of real estate.
The second way is called the sales comparison approach is where the appraiser will take a look at the recent sales in the area (normally within 1/2 mile of the property) for comparable properties that have actually sold. If no like properties are found within that distance, they will open up their search to consider 3/4 of a mile and keep going until the like properties are found. This method assumes a buyer will not pay more for a property than other buyers have.
This third approach is the most appropriate to determine the value of your land. Call Minnesota Cash Home Buyers at (612) 444-5088 for more a honest quote on what the value of your land is. We will convert that into an all cash offer to buy your land if you are interested.
More Than Recent Sales…
There are a lot more factors to the pricing of land than just other sales in the area to determine the value of land.
Depending on what city or county the land is located in. How is the property zoned? What can it be used for? If it’s zoned for commercial use at the end of a residential block, that is a completely different value than if the land at the end of the block is also residential. Making sure to contact the city or county zoning office will be helpful when figuring these things out. Often to get a piece of property that is zoned differently than the intended use, a person can go in front of the city planning commission and get it changed. We know how to do that.
Does your land have road access? If it’s a residential piece of land and its on a main road, that might decrease the value, but on the other hand, if it’s commercial, that might add more value. What’s around your land? If there is a busy shopping plaza, a grocery store, some attractions (good and bad for values), this can be a good factor to increase value. Unless it is next to an attraction that is not beneficial for raising the value like, water towers, high powered lines, garbage dumps, etc. What about neighboring properties? If your neighbors have a ton of extra junk lying, old cars or buildings that are in disrepair around their yard, this normally will decrease the value of your land. Also, take into consideration flood zones. We have over 10,000 lakes and many rivers that flood every spring with snowmelt or heavy rains. If your land is in an area that is quick to flood, no one will want to build a house on it, which makes your land undesirable for new construction. What are the holding costs of the property? You also have to take into account the annual taxes and any association fees. It all comes into account when you are considering value.
Finally, a huge factor that determines the value of your land in Minneapolis St Paul is the demand for land like yours? Are there tons of property like it on the market or is this a one-of-a-kind diamond-in-the-rough kind of property? If there are a lot of other properties like it in the market, then you will not be able to ask more than market value, because if they don’t buy yours, they will buy someone else’s land. What are similar properties in the area listed for sale for, and how long have they been on the market? If on the market more then 180 days the price normally needs to be lower. Or, similar properties have been on the market for a long time, meaning there isn’t a large demand for them, or too many of the same type of property compared to buyers. Supply vs Demand. When selling land in these types of situations, you may have to ask lower than market price to get it sold quickly. If there are not very many properties like yours on the market, especially if it has a special feature, then you may be able to ask more than the average market value for your land; however, that may take a specialty buyer and you might have to wait a little longer to reach the list price. Ultimately, your land is worth what the buyer is willing to pay for it and what you are willing to sell it for. Many land owners hold onto land way to long hoping the value will be going up in Minneapolis St Paul.
Selling land can be tricky without the right knowledge or pricing it right. Let us help you come up with an estimate of what your property is worth.