How do you calculate the worth of your land in Washington DC, Maryland or Virginia when you’re ready to sell?
Use These 3 Techniques
There are three typical methods used in the conventional real estate evaluation procedure. The Income Approach is the name of the first strategy. To gain a solid indication of the potential income that the property is likely to create, the appraiser will look at the market rent for other comparable properties. The appraiser uses the cost approach to determine how much it would cost to completely reconstruct the property, from the roof to the foundation. This method involves a lot more variables, like the cost of labor and building materials right now. Although the price of the structure itself should be taken into account, this is frequently insufficient to determine the market worth of the land.
The appraiser will look at recent local sales for comparable properties that have actually sold when using the sales comparison approach. This approach makes the assumption that a buyer won’t offer a property for more than previous buyers have.
The best method for estimating the worth of your land is the third one. For further details on these techniques, contact us.
More than Current Sales…
The value of your land is determined by a lot more things than the other transactions in the neighborhood.
What zoning does the land have? What is it useful for? The value of the land at the end of a residential block will be very different depending on whether it is zoned for commercial use or not.
Exists a road leading to your property? The value may be lowered if the land is residential and located near a major road, but it may increase in value if it is commercial. What surrounds your property? A shopping center, a supermarket, or some attractions are typically helpful factors to improve value. What about the houses close by? The value of your land may be lowered if your neighbors have a ton of excess garbage laying about their yard. Flood zones should also be taken into account. If your land is in a flood-prone location, no one will want to erect a house there, making it unappealing. What are the property’s holding costs? The annual taxes and any organization dues must also be considered.
The demand for land similar to yours in [market city] is yet another significant aspect that affects its worth. Are there several properties similar to it on the market, or is this a unique, undiscovered gem? You won’t be able to ask for more than market value if there are other comparable properties on the market since if they don’t buy yours, they’ll buy someone else’s property. How much are comparable houses in the neighborhood listed for and how long have they been available? There may not be much of a demand for similar homes if they have been on the market for a while, therefore you may need to ask below market value to move your property quickly. You might be able to ask for more for your land than the average market value if there aren’t many properties similar to yours on the market, especially if it has a unique feature. Nevertheless, that might require a specialized buyer, and you might have to wait a little longer to achieve the list price. Your land is ultimately worth what you are willing to sell it for and what the buyer is willing to pay for it.
For additional information on how to calculate the value of your land in Washington DC, Maryland or Virginia, contact us at 202-235-2323 or email us a message.