Land comparables

[Honey West]

When appraising raw land how can the non-comparability of using land with an existing residence- even a tear down- best be described? Also any suggestions for reference material on what makes a land comparable a comp?

 

[Dublin ohio]

When appraising raw land how can the non-comparability of using land with an existing residence- even a tear down- best be described? Also any suggestions for reference material on what makes a land comparable a comp?

The same thing that makes and improved parcel a comp. Not sure what the dilemma is. A teardown sale is a teardown sale. Sometimes they are priced and sold with the cost of tearing down considered, sometimes not.

 

[George Hatch]

I think the IRL dynamics change by price tier. In the high value locations the cost to cure is almost never a factor.

You also want to keep an eye of offsite improvements like curbs, gutters, extended paving and utility mains that the local jurisdiction might require to build on your site. If a previously developed parcel already has all that then those are costs they don't have to repeat when compared to a subject that might be lacking some or all of that.

 

[CCAAMO]

If the comp is a tear down vs unimproved land you will need to adjust for demolition and compare site improvements as well as available utilities (power, water, sewer, etc.)

 

[Terrel L. Shields]

Land is valued as if vacant and available for its highest and best use.

the cost to cure is almost never a factor.

Even in the cheap seats of the Ozarks... Existing utilities may offset the cost to cure. If a true "raw land" comp, it might require paying for a lot of off site trenching and pipe to get sewer and/or water to it. I know a house where the sewer and water both were across the road from a new dwelling. The cost to drill under the highway (a state road in the city limits) and trench the 300' or so was going to be $36,000. The city gave them a variance and they installed a septic system and drilled a water well. They had 4 acres in the site.

 

[J Grant]

Are they two selling at about the same price?

In my area teardowns sell a bit higher even with the cost to remove the dwelling, they already have utilities in place, and are graded sometimes I suspect they get financed as houses even though a month after closing the house gets demolished

Other then that, the location, view, size of lot, does it have trees is it cleared etc whether there is a house to be torn down or not the lot will have the attributes it has

 

[Terrel L. Shields]

In my area teardowns sell a bit higher even with the cost to remove the dwelling

That is the weird thing. I see that phenomena too. I presume the buyer is willing to pay a premium to get a site that they view as better than they can find elsewhere. This seems especially true in older historic districts where the buyer might want to replace an existing derelict building with a modern dwelling that is built similar to one 100 years old.

Also any suggestions for reference material on what makes a land comparable a comp?

I am going to recommend you buy this book. Read it...if is not the most fun you've ever had to read. It is detailed.
Can buy on line at the App. Institute or look on Amazon for a used one.

 

[Honey West]

The same thing that makes and improved parcel a comp. Not sure what the dilemma is. A teardown sale is a teardown sale. Sometimes they are priced and sold with the cost of tearing down considered, sometimes not.

I kept watching my email for replies then got locked out of my account so my apologies for not acknowledging replies! My questions related to someone else using an improved lot as a comparable to raw land; they suggested it was a tear down ( not) so though I know the 2 are not comparable I was looking for a rule to point to—something other than, Duh!! Thank you for taking the time to answer.

 

[shrubberyvaluation]

Are they two selling at about the same price?

In my area teardowns sell a bit higher even with the cost to remove the dwelling, they already have utilities in place, and are graded sometimes I suspect they get financed as houses even though a month after closing the house gets demolished

Other then that, the location, view, size of lot, does it have trees is it cleared etc whether there is a house to be torn down or not the lot will have the attributes it has

Its the same here, plus there are impact fees so an existing dwelling can be a positive or neutral..

 

[shrubberyvaluation]

I kept watching my email for replies then got locked out of my account so my apologies for not acknowledging replies! My questions related to someone else using an improved lot as a comparable to raw land; they suggested it was a tear down ( not) so though I know the 2 are not comparable I was looking for a rule to point to—something other than, Duh!! Thank you for taking the time to answer.

What makes something comparable is if the same typical buyer would consider it as an alternative. It is your judgement based on the facts you can obtain