When you are ready to sell land in Michigan, how do you determine the value of your land?
Use These Three Methods
The traditional real estate appraisal process has three common approaches.
The three common approaches in the traditional real estate appraisal process are the Income approach, the cost approach and the sales comparison approach.
The first approach is called the Income approach. The appraiser will look at the market rent for other comparable properties to get a good idea of the potential income that the property is expected to produce. The appraiser will look at the market rent for other comparable properties to get a good idea of the potential income that the property is expected to produce.
The second approach, the 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 approach of the actual building is important to consider, but it’s not usually enough to know the market value of the property.
The third approach is the sales comparison approach. It is when the appraiser will take a look at the recent sales in the area for comparable properties that have actually sold. This method assumes a buyer will not pay more for a property than other buyers have paid recently in the area. 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.
Consider the property’s zoning, road accessibility, nearby facilities and attractions, neighboring properties, flood zones, annual taxes, and association fees to determine the value of your land.
More Than Recent Sales…
There are a lot more factors than the other sales in the area to determine the value of your land in Michigan.
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.
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. If your land is on a main road and is zoned for commercial use, that could add more value.
What’s around your land? If there is a shopping plaza, a grocery store, some attractions, this is usually a good factor to increase value. If there are shopping plazas, grocery stores and attractions near your land, you can expect a boost in land value.
What about neighboring properties? If your neighbors have a ton of extra junk lying around their yard, this might decrease the value of your land. However, if your neighbors have unkempt lawns and junk yards, the land value may decrease.
Also, take into consideration flood zones. Taking into consideration flood zones is important while determining the land value, especially if your land is in an area that is quick to flood. 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.
What are the holding costs of the property? You also have to take into account the annual taxes and any association fees.
Another huge factor that determines the value of your land in Michigan 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. If there are a lot of other properties like it on the market, you will not be able to ask for more than market value.
What are similar properties in the area listed for, and how long have they been on the market? If similar properties have been on the market for a long time, that means there isn’t a large demand for them, and you may have to ask lower than market price to get it sold quickly.
If similar properties have been on the market for a long time, that means there isn’t a large demand for them, and you may have to ask a 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.
If there are not very many properties like yours on the market, then you may be able to ask more than the average market value. Ultimately, your land is worth what the buyer is willing to pay for it and what you are willing to sell it for.
Call NateBuysLand at (269) 222-7711 or send us a message for more information on how we can buy your Michigan land, Hassle-free, for a fair amount of Cash.
Get in touch with NateBuysLand today for more information.
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