When you are ready to sell your land in Arizona, you want to make sure you get a good price for it, right? But maybe you’ve held the property for a while and aren’t sure how much it’s really worth. In this post we take a look at how to determine the value of your land in Arizona.
The Three Common Approaches
The traditional real estate appraisal process has three common approaches. The first approach is called the Income Approach. The appraiser will look at the market rent for other comparable properties to get a good idea of the potential income that the property is expected to produce.
The Cost Approach is where the appraiser evaluates how much it would cost to rebuild the property exactly how it is from the foundation to the roof. This approach has a lot more variables, such as the current price of building materials and labor. The cost of the actual building is important to consider, but it’s not usually enough to know the market value of the property.
The Sales Comparison Approach is when the appraiser will take a look at the recent sales in the area for comparable properties that have actually sold. This method assumes a buyer will not pay more for a property than other buyers have. Most real estate professionals use this method when trying to assess a proper value to the land.
More Than Recent Sales…
But, keep in mind that there are a lot more factors than the other sales in the area to determine the value of your land. For example:
- Zoning
- Potential Land Use
- Road Access
- Neighboring Properties
- Flood Zones
- Property Layout
- Natural Vegetation
- Access to Supplies, Amenities, or Recreation
- HOA/POA & Annual Dues
Another huge factor that determines the value of your land in Arizona is the demand for land like yours? Are there tons of property like it on the market or is this a one-of-a-kind diamond-in-the-rough kind of property? If there are a lot of other properties like it in the market, then you probably won’t be able to ask for more than market value. If there are not very many properties like yours on the market, especially if it has a special feature, then you may be able to ask more than the average market value for your land; however, that may take a specialty buyer and you might have to wait a little longer to reach the list price. Ultimately, your land is worth what the buyer is willing to pay for it and what you are willing to sell it for.