My friend and business colleague, Kat Palmiotti has blogged about land acquisition and what to consider in the scope of the purchase. Kat re-located from upstate New York to beautiful Montana and she had her own home built. Very knowledge agent who would be an asset in your purchase process!
One of the first things a seller will want to know when considering putting land on the market is the answer to the question, "What can I get for my land?" In Montana, sale prices are not publicly disclosed, so it's hard to figure out what buyers are paying for properties without contacting a real estate professional.
So now you've contacted one, and have asked the question, "What can I get for my land?" The answer is NOT to use an average per acreage price and multiply times the number of acres you have. No, instead the following are some of the attributes that should go into calculating your land's value.
First, the agent must physically visit your property. Each land parcel is so unique that even basing a price on an adjoining property can be problematic. The only way to know exactly what attributes are important is through an agent visit. And NOT a drive-by. The agent must step foot on the land to determine the following:
Are the boundaries all marked? A follow-up question will be whether the property has been recently surveyed. Knowing exactly where the edges of the property are is very important when questions of home, outbuilding or fence locations arise.
Are there any views (of mountains, lakes, rivers, valleys)? If yes, where are they visible? Do trees have to be removed in order to see or enhance views, and if yes, where are those trees?
Are there any sites already available and ready for a building? Are there areas that are flat but not yet prepared? What might be required in order to make the land build-able?
Some of the key requirements for building a home have to do with utilities. Is electric already on or near the property? If it's not, where is the closest access point? This might not be easily visible, so a follow-up call might be required to the electric company. Is there a well in sight? What about a septic system? And cell service? Is it possible to make a call from the property? And is wireless service available all over the property or just in certain locations? Can you set up a hot spot with the cell service? Location of internet may be one factor in determining where to build.
Is there waterfront, and if yes, how many feet? Is there a creek, river, lake or any other body of water on the property? Does the river or creek flow year round? Water is a very valuable resource in the area, and can add to the price if it is located on the property.
Are there southern exposures? If yes, where? Do trees need to be removed in order to best utilize the sun's rays? Often buyers will want to plant vegetable or flower gardens so this is another factor in determining the value of the land.
What is physical access to the property like? Is the road paved, gravel or dirt? Is it maintained and if yes, by who? Who is responsible to fill in ruts or get rid of trees that fall across the road? Is there already a driveway in place? A parcel of land on a paved county road that is maintained by the county highway department may be more valuable than a similar parcel of land on a rutted, dirt, non-maintained road.
Is all of the land usable? Are there steep hills? Are there wet or swampy areas? Are there areas of erosion? A 20 acre parcel with only a few acres of usable land will be less valuable than the same size parcel with full availability of use.
Are there any areas with garbage or debris piled up? Where might a driveway be installed and how long might it be? Are there a lot of dead trees that need to be cleaned up? Are there any special trees that would be desirable (apple trees, other fruit trees)? Are there signs of wildlife? What about noxious weeds?
The more items that can be visually observed by the agent the more accurate the price range. But it's not only the visual aspects that will go into determining the price. Other attributes that may impact price could include:
Covenants and Zoning:
Some buyers want covenants, some don't. Some zoning districts can be constrictive, while others are not. The agent should determine how restrictive usage of the land is, in order to better assess buyer demand (and accordingly price).
While physical access can be visually assessed, legal access needs further review, prior to listing the property. There are online tools in the Kalispell area that provide agents with insight into whether those back gravel roads may have easements. Roads without legal access make the purchasing process much more problematic and decrease the value of land. In some cases, lack of legal access could result in land owners needing to resolve the issues prior to putting on the market. If buyers cannot get to the land, use a land loan to purchase or get title insurance that covers access issues, they won't buy it.
If you are interested in selling your land, call a real estate professional who is experienced with land sales. If you call one who tells you that the average price per acre in the area is $xx, so let's just multiply that by your acreage to come up with a sales price, move on. If you're in the Kalispell area, call me, Kat, on 406-270-3667 or email me at firstname.lastname@example.org. I'll throw on my boots, and head on out to your property.
Originally published at thehousekat.com.
Kat Palmiotti, The House Kat
Licensed Broker, CBR®
eXp Realty LLC
P.O. Box 10458
Kalispell, MT 59904