Whether for estate purposes or strategic planning, we can evaluate your land to determine its value under various scenarios.
What a given property’s value is depends on many factors. Does the landowner want to sell the property immediately as a raw unimproved site or will they allow the buyer to purchaser the property based on the density achieved at record plat? “Worth” really comes down to trading risk (time and uncertainty) for money in the future. A given property actually has four values depending on how quickly one needs to settle.
Example: A 10 acre farm field that could support twenty houses by zoning:May be worth its agriculture value - $2500 per acre if settlement is expected in 45 days.
- Is worth a bit more than its agriculture value - $6500 per acre, if the buyer is able to complete a feasibility period including creation of a concept plan showing the actual density that could be achieved, taking into consideration actual site conditions and required constraints and limitations. Settlement in 120 days.
- It may be worth - $70,000 acre if the seller will allow the developer to process the plans through the local county planning and zoning subdivision process and settle based on the actually number of lots actually achieved at record plat. Settlement in full on the entire property may be 2 years based on the property yielding 75% of its proposed density. (15 ) lots and the expected base house price is $300,000, with the seller paying half of closing costs and all of the agriculture recapture tax.
- It may be worth - $250,000 per acre if the seller is agreeable to settlement at record plat (2 years) and the (developer/builder) settles after each individual home goes to settlement (15 settlements for the landowner over the course of four years (2 years to process plans and 2 years to develop the property and build the houses) base price of the houses $550,000.Buyer pays all of the agriculture recapture tax and splits half of the costs of closing.
In each of the above scenarios, time and uncertainly has had major impact on the value of the property. It is important to consider all of the issues that determine a property’s value
Some of these issues are:
- Current interest rates
- School district
- Adjacent subdivisions
- Area foreclosures
- Number of lots that can be achieved from the subject property
- County politics
- Develop hurdles
- Required off-site improvements
- Number of lots already in the county pipeline
- Area employment prospects
- Costs to transform the raw land into an improved lot
- County impact fees
- Storm water management requirements
- State imposed mitigation fees
- Easement acquisition costs
- Number of home builders in the market