The valuation of raw land is easy for the real estate professional who has access to the Multiple Listing Service (MLS), but it can be more difficult for the nonprofessional. The market value of the land primarily depends on the recent sales price of similar nearby lots; this is called the Sales Comparison Approach for property appraisals. This value can be determined by researching county property tax records on government or commercial websites.
Write down the owner’s name and the address and subdivision of the lot, if known. Search for the property tax records for your county on its official website. The website may allow you to locate a property on a map which can be very useful if the owner’s name or address of a property is unknown. It is possible that in some counties, the property records are not yet computerized. In this case, you must search for the records manually at the county courthouse.
Print out the record or write down the size of the lot, the approved use of the land and the assessed value. The approved use will generally be residential, commercial, agricultural or industrial. This is important when finding comparable closed sales; a commercial lot should be compared to other commercial lots, and a residential lot should be compared with other lots in a residential area and not with a lot that is located in the middle of a business district. The assessed value of the land can provide a rough estimate of value since this is the value that the county uses when assessing property taxes.
Depending on the condition of the real estate market in any locale at any particular time, land may be selling higher or lower than the assessed values; that is why professionals look at recent closed sales of comparable lots to determine what an investor would pay for a similar lot; this price is what is known as the market value.
Search the county tax records for all vacant land with the same use as the lot in question. Select the ones which sold recently and are located near and are similar in size to the lot that you are wishing to value. Write down the sale price, sale date, size of the lot and location. Some county websites may allow a search for properties that have sold within a specific time frame. The past six months is a good option to choose if it is available; otherwise, choose one year. If this method is too tedious, use one of the websites mentioned in the next two steps.
Access a national commercial website. Very few sites allow individuals to search for closed sales of vacant land located anywhere in the United States. One of these is
Access a local commercial website if the national sites are not satisfactory. An Internet search may uncover additional vendor property record sites that are specific to an individual state or county and which allow you to search for closed sales of vacant land. Calculate the Market Value Convert all lot sizes to square feet where 1 acre equals 43,560 square feet. If the description lists the size as 0.25 acres, for example, multiply 43,560 by 0.25. Calculate the price per square foot of the most comparable lots by dividing purchase price by the lot size.
Calculate the average price per square foot for the closed sales by totaling all the comparable lots’ price per square foot and dividing by the number of comparable properties that were used for the calculations. Multiply the number of square feet in the lot that is being valued by the average price per square foot that was calculated in the previous step. The result is an estimate of the market value of the lot.