Wholesale Land?

[Winniferd B.]

I had someone contact me about selling his land. It's 1 Acre and it has an old abandoned Mobile home on it. It's been abandoned about 8 months. The land cam be used for commerical or residential. He inherited the land and wants to get rid of it. He said he wants 38k for it. Is it possible to wholesale land. And how exactly do you run the comps for it. I ran the comps for the area and homes in that area sell between 90-190K.

[Bill Gulley]

Hi, land is usually analized by the sq. ft. or running foot. There are 43,560 sq. ft in an acre. You should be able to find lots and land for sale and sold on the MLS. You can always look in the local papaer and RE sale magazines as well.

Commercial property looks at ytwo variables, the Sq. Ft. and the running foot along road frontage. In some areas, the running foot is also considered for water frontage of residential properties.

Land needs to be valued at it's highest and best use, which generally begins with its zoning restrictions. Small areas are generally best suited for residential and should be viewed in that light for comps. There is a process that the land owner can go through to re-zone property. Identifying property that is zoned say for residential that can be re-zoned for commercial is a great way to add value to a property, but that's probably not where you are with this post.

The mobile home can be a a matter of obsolescence, a funtion that causes the devaluing of real estate. The property might be worth much more if the MH were gone! The property has utilities available which is a plus.

If you have a septic tank on the property you'll want that inspected and a perculation test to see what the capacity is for any new construction and the ability to utilize that system in new construction, generally with the health department (or they can point you to the right office)

You might hav a well on the property. If so, you'll want that tested as well. The health department can tell you how to take a water sample. Stagnet wells often have problems. Pour a gallon of common bleach down the well head and wait the next day to take your sample. This will "shock" the well and provide a better test initially, but you'll want to test again in about a week to see if the well really has problems.

Comparing comps on land is an art as well as a science. Your comps need to be similar in area. Excess land is worth less than that area required for it's utilization. In other words, if the county requires at least 5000 sq ft for a buildable residential lot, the highest vale is to the 5000 sq. ft required, excess land is a positive add, to a point. If it is common in the area that lots are 3 acres and you have 5 and a half, at some point some buyers may view the excess as a liability rather than an asset. There is more mowing, maintenance, perhaps fencing and tress to maintain. This is the art of assessing the value and while excess land is worth less, don't misunderstand, there is value, what that might be is in the eye of the beholder. At one acre, you're probably fine, but if it is the largest lot in the area, you might consider this aspect of valuation.

Other elements that can effect residential land values are; yes, location. Proximity to amenities, shopping, schools etc. The economic desirability is influenced by the valuation of nearby homes.

The lay of the land is very important. An area that is in a flood palin is obviously not as valauble. Drainage is a consideration. Mowability, having steep areas, gullys or other problem areas will cosat money to cure making the property similar to other comparables.

Mature trees are a plus, you can add at least a grand for a large walnut tree. And, deduct for areas that need to be cleared to be utilized.

Just some of the considerations in raw land valuations. Good luck, Bill