We do a fair amount of land sales here in Southern Maryland, and trying to determine land values is a complicated process, much more so than determining the value of someone's home. Everybody wants to make top dollar for their land when they go to sell it, but how do you know what top dollar really is?

With home sales, this is a straight-forward process. With land, the financial factors of the analysis becomes far more difficult. It's because of this reason that so many Realtors do not work in land sales (It's a ton of work, and it can be very tedious!). Land values can also be affected (positively or negatively) through improvement, much like renovating a home.

When I'm asked to research a property to determine a home's value, many of the variables I need to know have to be researched. Simply checking a tax record will not provide me with enough information (I wish it was so easy!) to properly evaluate the land. I have a list of questions I need answered:

How Well Does Your Land Drain?

• What is the Zoning?
• What is the Zoning Density?
• Is There a Survey Map?
• Is the Land Perc'd?
• What is the Soil Content?
• How Much Road Frontage Does It Have?
• Is there Public Sewer/Water Access?
• What Does the Topography Look Like?
• What Sort of Easements Exist?
• Does it Have it's TDR's?
• Was it Logged Recently?

This requires finding(not all land has an address, or even road access!) and walking the property to make sure it's not an obvious cliff or swamp (both of which exist in the area), and then pulling any and all surveyors reports and records that have ever been filed in regards to the property.

What I'm putting together (Ideally) is a packet of information I can use to clearly pinpoint why I am placing a given value on the property. This packet will include Topography Maps, Aerial Images, Satellite Images, Sewer Maps, Geo-Survey Studies, Tax Maps, and Zoning Maps.

No Such Thing As Too Much Research!

Here's where the real art of pricing land comes in! I have to determine what the highest and best *likely* use of the property would be. If it can't be built upon, it's worth only a fraction of what it would be if a home could be put up on it's location. I also determine what the property would be worth to the surrounding owners (sometimes they're willing to pay a premium to ensure that it will not be developed!).

It's a matter of determining how much money it would cost to develop the land, and how much development can be done. The more building lots a property can be split into, the more the parcel is worth. The biggest challenge to that is estimating how much of the land must be used for roads (subtract that from the acreage), how much must be used for forest conservation (again, possibly subtract that), how much limitation is incurred by easement (you get the idea), ill terrain, etc.

If you want to raise the value of the land, you need to improve it, much like you would a home. Be sure to check out my upcoming blog article on Land Perc's to find out more!

~Jonathan Benya
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
Waldorf and Southern Maryland Real Estate
Southern Maryland Real Estate Blog