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June 2018


How I Price A Farm, Vacant Land or Building Lot
Pricing A Farm Or Vacant Land (Lot) In Todays Market Place.
 
I have been a licensed Realtor since 2000 and in that time have seen a lot of improperly valued farms and vacant land (lot).  There is a huge downside to over-valuing or even under-valuing farms and vacant land (lot). 
On the side of over-valuing a farm or vacant land (lot), you will attract the wrong type of attention.  Realtors and the general public will not take your property seriously...thereby using it as an example to help sell another properly valued property.  Over-valued properties on the market become stale after a period of time...longer than the average days on market.  In correcting an over-valued farm or piece of vacant land (lot), too many price adjustments, or too large a price adjustment will draw unfavourable attention to the property.
On the flip-side, some Realtors will purposely under-value a farm or vacant land (lot) either to make a quick sale or to hope and create a ‘bidding war’.  The latter can be successful in hot markets or on hot properties...but be very careful and know what you are doing....it can backfire.
So...what needs to be considered when properly valuing a farm or piece of vacant land (lot)?  Here is my list....
If a farm and vacant land...
  • Have many farms sold recently in the area?  (tells us if there are many Buyers seriously looking)
  • What type of farm is it?  Livestock? Cash crop? Mix? 
  • Location (Where is it located in relation to other similar farms, good roads, related businesses, water sources for irrigation)
  • Size ( is it a full 100 acres?  Larger is better for high production crop farmers.  And how many acres are farmable?  Forest are beautiful but of lesser value to farmers growing crops)
  • Buildings ((what are the buildings and their condition?  (in some cases the buildings are a liability)  Can the buildings be severed off?))
  • Quality of the land (topography?  Type of soil?  Stone-free? Drainage? Has it been farmed in the past and well cared for?)
  • Environmental (how much if any of the property is protected by conservation?)
If a building lot....
  • What type of market is it?  (Buyer vs. Seller)
  • What is the zoning and will it allow for a home? (find out the restrictions on size of home, are out-buildings allowed, animals such as horses allowed to be kept)
  • How much, if any of the lot is controlled by Environmental?
  • What costs would be incurred in order to build?  (development charge, running utilities to building site, amount of fill required)
  • What are the dimensions?  (road frontage vs. Depth)  Size in acres?
  • Where is the property located? (accessibility, amenities)
  • What are the other homes like in the area?  Better homes often add to the lots value.
  • Features (view, open/partially/completely wooded, stream/pond/river,on paved road, busy vs. quiet road)
The key to a successful sale of a farm or vacant land (lot), is working with a Realtor with vast knowledge and access to resources.  Selling rural property is more complex than selling urban residential.
In order for me to value your farm or vacant land, I would take my vast knowledge of the local Real Estate Market, meet with you personally, inspect the subject property in person, take detailed notes and extensive photos.  I would give you a fair-market-value at that time.  I would give two values, one would be what I believe the property should be listed for...the second would be what I believe the property would sell for at the time.
If you are considering Selling your farm or vacant land (lot), please contact me.  I would be happy to ‘value’ your property and assist in getting ‘top-dollar’ in the shortest time possible.  Lets’ get started!
 
 
JOHN McCAGUE
JOHN McCAGUE
Sales Representative
Royal LePage RCR Realty, Brokerage (Independently owned and operated)
7 VICTORIA STREET WEST, Alliston, ON L9R1V9
Phone: 705.435.3000     
Fax: 705.435.3001     
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