Course · Lesson 5 of 8
What it's really worth
Value land from real sales, and know why the usual numbers are wrong.
County value isn't market value, and online estimates are worst on land. I've seen Zillow put one of my properties far below a real cash offer I had in hand. My method is plain: the three closest recent sales of similar land.
What counts as a sale
- Same kind of land, sold alone, in the last 36 months or so.
- Similar size. I stay between half and double the subject's size.
- Closest first, and newest first among the close ones.
- Similar land rate. A road lot and a paper-street lot aren't the same land, even side by side.
What to throw out
- Bulk deals. If several parcels show the same date and price, it may be one price for all of them. Never read that as the price of each.
- New houses. A "vacant" record that sold for far more than its county value may have a house on it now.
- Tiny token sales, like a $100 transfer between family members.
What the record can't show you
Offers never appear in public records. In a thin market where families hold land and don't sell, recorded sales make land look cheaper than it is. I have land with standing cash offers well above anything the records would tell you. Treat your three sales as a floor for your thinking, not a ceiling.
These are my methods and my numbers, and they took years. What you earn depends on what you buy and what you pay.
Do this now
Find three closest sales for your parcel. Write each one down, with the reason you kept it.
Check yourself
Two lots show the same date and the same price. What do you assume?
It may be one price for the pair, so don't quote it as the price of each.
Why can recorded sales understate land?
Offers don't appear in public records, and in a thin market few sales get recorded.