Items you will need
- Sales records of similar pieces of land
- A real estate appraiser
Whether you're selling or buying land, you'll need a record of comparable land sales, or comps. A comp is the sale of a parcel of land that is similar to the land you are either hoping to buy or sell. If you are buying, comparable sales give you an idea of how much you should pay for a plot of land. If you are selling, they provide a rough guide to help you set the right asking price. Finding comparable sales, though, can prove to be a challenge. After all, vacant plots of land are often unique.
Compile a basic description of the land that you either want to buy or are trying to sell. Does it contain water? Does it have several valuable old trees in its boundaries? Is it near a major city or tourist attraction? All of these features set pieces of land apart. When you are searching for comparable plots, you'll want to find those that have as many of these features in common with your land.
Hire a real estate agent who has experience selling empty land. This agent will be able to gather comparable sales from the listings of past land sales in the communities surrounding the empty land you want to sell or buy. It's important to work with agents who have sold land in the past; they will consider all of a piece of land's attributes before bringing comparable sales to you. For instance, they won't consider a land sale comparable to your land if the recently sold plot has waterfront access and yours does not.
Search online for land sales in your community. This will give you a general idea of the prices that lots are fetching today. This is important: Land values fluctuate as the economy and the local real estate market changes. Just because a piece of land similar to yours grabbed a sky-high offer two years ago, doesn't meant that the market will support the same type of offer today.
If you're selling land, once you set a price, based on comparable land sales, don't be too rigid. If you continually receive offers that are below your asking price, you may have to reduce your asking price. Don't be too rigid, either, when buying land. Just because a comparable plot of land only fetched $50,000 six months ago, doesn't mean that the seller of a similar piece of land will budge too far from a $60,000 asking price.
- band of land image by Chris Holmes from Fotolia.com